European banks to provide over €600M in recovery funds for Ukraine
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Ukraine is set to receive hundreds of millions of euros from European banks to bolster its economy and eventually rebuild its infrastructure, according to several agreements signed in Berlin on Tuesday.
The EU will provide €517 million through programs managed by the European Bank for Reconstruction and Development (EBRD). Of this amount, €143 million will directly support new EBRD projects in Ukrainian cities, with the remainder allocated to critical sectors such as infrastructure and energy.
Additionally, Ukraine has secured a €100 million loan from the Council of Europe Development Bank to compensate for housing destroyed by the conflict. This funding is primarily aimed at supporting the most vulnerable populations, including those who have lost their homes, individuals with disabilities, and large families. The Ukrainian infrastructure ministry stated that approximately 2,000 families are expected to receive new housing through this loan.
During the Ukrainian Recovery Conference in Berlin on Tuesday, Ukrainian President Volodymyr Zelenskyy highlighted that Russia has weaponized energy in its war against Ukraine. He noted that Ukraine has already lost 80% of its heat generation and one-third of its hydro energy capacity.
Ukraine’s infrastructure ministry also emphasized the severe damage to the housing sector due to the war. Since Russia’s full-scale invasion in February 2022, the EBRD has significantly increased its financing for Kyiv, providing more than €4 billion.
However, Ukraine’s recovery will demand substantially more, with estimated rebuilding costs of $486 billion over the next decade, or 2.8 times the country’s economic output in 2023, according to a Ukrainian government report.
The agreements signed in Berlin include EU financial guarantees for EBRD programs in Ukraine: €140 million for financial inclusion, €37 million for the SME Competitiveness and Inclusion Programme, €150 million in financial guarantees, and €7.5 million in technical assistance for the Hi-Bar guarantee program supporting the energy sector. The remaining funds will go to the EBRD’s Municipal, Infrastructure, and Industrial Resilience Programme.
Supporting Ukraine’s affected regions was a key focus of the Berlin conference. Governors of major Ukrainian industrial centers and mayors of frontline cities such as Mykolaiv, Kharkiv, and Dnipro participated in the conference panels from June 11-12, with many having already secured individual deals with the EBRD.
The EBRD also signed pre-financing agreements with Kharkiv, Kryvyi Rih, and Kyiv, totaling €87 million for the three cities. The bank stated that these loans are intended to ensure uninterrupted access to essential infrastructure services and mitigate the impact of the war, including recent attacks on municipal heating and energy infrastructure.
