EBRD and EU Back €75 Million Loan to Strengthen Ukraine’s Hydropower and Energy Security

Strategic financing supports hydro plant upgrades, renewable generation, workforce training, and wartime resilience

The European Bank for Reconstruction and Development (EBRD), together with the European Union, has approved a €75 million senior loan to Ukraine’s state-owned hydropower operator Ukrhydroenergo (UHE), reinforcing the country’s energy system amid ongoing wartime challenges. The financing is complemented by up to €20 million in investment grants from international donors, bringing the total project value to €120 million, including Ukrhydroenergo’s own contribution.

The initiative focuses on hydropower plant modernisation, emergency equipment procurement, staff training, and long-term energy resilience, positioning hydropower as a stabilising backbone of Ukraine’s electricity system during conflict and recovery.

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EU-Guaranteed Financing Under the Ukraine Investment Framework

The EBRD loan is backed by a European Union guarantee under the Ukraine Investment Framework (UIF), a mechanism designed to unlock large-scale capital for Ukraine’s recovery, reconstruction, and alignment with European energy standards.

This project falls under the EBRD–UIF HI BAR agreement signed in 2024, which prioritises investment in strategic sectors such as renewable energy, grid stability, and critical infrastructure. The financing enables Ukrhydroenergo to secure essential electrical components, including an emergency reserve of critical equipment to support rapid repairs and operational continuity.

Hydropower Upgrades to Deliver Clean, Reliable Electricity

The investment will support the replacement of damaged and worn-out components at selected hydropower plants, improving operational efficiency and system reliability. Once implemented, the upgraded facilities are expected to generate approximately 223 GWh of renewable electricity per year.

This additional output will:

• Reduce Ukraine’s dependence on electricity imports

• Strengthen peak-load coverage

• Enhance grid stability during emergency conditions

From a climate perspective, the project is expected to deliver annual CO₂ savings exceeding 96,000 tonnes, reinforcing hydropower’s role as a low-carbon, dispatchable energy source.

Human Capital and EU Standards at the Core

Beyond physical infrastructure, the project includes a comprehensive training programme for Ukrhydroenergo’s engineering staff, addressing critical skills gaps created by wartime disruption and accelerated technology upgrades.

The training will support:

• Safe integration of modern equipment

• Compliance with EU environmental, safety, and operational standards

• Long-term asset management and reliability

All procured equipment will fully comply with EU environmental and safety requirements, and project activities will be carried out within existing hydropower facilities, with no land acquisition or population displacement.

Fully Aligned With Green Finance and ESG Principles

The project qualifies as 100% green finance under the EBRD’s Green Economy Transition (GET) methodology and is fully aligned with the Paris Agreement.

In addition, donor-funded technical cooperation will provide:

• Procurement and implementation support

• Enhanced ESG and governance practices

• Development of a gender action plan, strengthening inclusion and workforce equality

These measures reinforce Ukrhydroenergo’s long-term sustainability and institutional resilience.

Energy Security as a Pillar of Ukraine’s Recovery

By backing this initiative, the EBRD aims to help Ukraine maintain a stable and secure energy system, even under extreme conditions, while accelerating its green transition.

Since the start of Russia’s full-scale invasion in 2022, the EBRD has significantly expanded its role in Ukraine, supporting:

• Energy security and infrastructure

• Food and trade systems

• Private sector resilience

By 2025, the Bank’s total wartime investments in Ukraine are expected to approach €9 billion, making it the country’s largest institutional investor and a cornerstone of its long-term recovery strategy.