• EBRD lends €50 million to help the Ukrainian capital Kyiv handle impact of war
• Emergency liquidity supports continued functioning of vital municipal infrastructure
• Loan is 25 per cent backed by EU guarantee and co-financed by €5 million grant from USA

The European Bank for Reconstruction and Development (EBRD) is lending €50 million to the Ukrainian capital, Kyiv, one of the largest cities in Europe. This loan will help ensure the provision of vital municipal services in the city and mitigate the effects of the ongoing war.

A first loss risk cover guarantee from the EU will cover 25 per cent of the loan. This guarantee is vital to the transaction, helping the city and its key municipal utility to immediately address critical liquidity needs and ensure uninterrupted provision of essential public services. The EBRD loan will be co-financed by a €5 million grant from the United States of America.

Kyiv is Ukraine’s main economic hub and has a registered population of around 3 million people, accounting for approximately 7 per cent of the total population of the country. The city serves as a focal point for international diplomatic efforts and the coordination of humanitarian aid for Ukraine as a whole.

Russia’s ongoing war on Ukraine is having an unprecedented social and economic impact on the country, resulting in a fully fledged humanitarian crisis. Kyiv has been subjected to numerous missile and drone attacks, which have targeted key infrastructure, including assets in the energy and district heating sectors.

The EBRD loan will provide liquidity to the city’s municipal district heating utility, Kyivteploenergo (KTE), ensuring that it remains operational and can retain its existing workforce, continuing to provide vital heating and electricity to the city’s residents (including internally displaced Ukrainians who have moved to Kyiv), businesses and other municipal companies.

KTE also generates a significant amount of electricity for the city and the country as a whole, and these emergency funds are expected to support repairs to the city’s damaged infrastructure in preparation for the impending winter heating season.

Since February 2022 the EBRD has deployed a total of up to €5.2 billion in Ukraine, of which up to 1.4 billion this year, focusing on support for energy security, vital infrastructure, food security, trade and the private sector, in addition to key policy reforms. In 2023 the EBRD’s Board of Governors approved a capital increase of €4 billion to support wartime investment and post-war reconstruction.