The European Investment Bank (EIB) and European Commission have signed a €2 billion ($2.2 billion) guarantee agreement, allowing the bank to finance urgent recovery projects in Ukraine under the EU’s financial assistance program, the Ukraine Facility. Ukraine’s government reported this information on its website on Thursday.
Under the Ukraine Facility, the EU will allocate €50 billion ($54.3 billion) to finance Ukraine’s state budget and stimulate investments from 2024 to 2027.
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The total cost of reconstruction and recovery following Russia’s full-scale invasion of Ukraine over the next decade is estimated to cost the Ukrainian economy $524 billion – approximately 2.8 times Ukraine’s estimated nominal GDP for 2024, Kyiv Post previously wrote.
The direct damage in Ukraine has now reached $176 billion. Key sectors affected include housing (more than 2.5 million dwellings), transport, energy, commerce and industry, and education.
EIB will allocate $2.2 billion for reconstruction projects in the energy sector, including energy grids, expanding hydropower and renewable energy production, as well as improving energy efficiency. All of these energy sources were severely affected by Russian attacks.
Additional EIB financing will be directed toward railway modernization, the development of urban public transport, and improvements to transport infrastructure. These projects also aim to enhance transportation links between Ukraine and the EU.
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EU financial aid will help to restore Ukraine’s municipal infrastructure, including water supplies, heating systems, street lighting, schools, hospitals, and higher education institutions.
Apart from real money, the EIB and the government of Ukraine have also signed an agreement to deploy a team of advisory experts on the ground in Kyiv.
“This team will provide hands-on expertise to accelerate the preparation and execution of critical projects and strategic documents – starting with energy, transport and housing, and expanding to other sectors, including Ukraine’s public investment management reform,” EIB wrote in its press release.
After the EU and international financial organizations poured their money into Ukraine to help bolster its recovery, the lack of bankable projects and the expertise to create them has become a serious hurdle to get the financing.
Ukraine has already received more than €2.2 billion ($2.4 billion) in financial aid from the EIB since the start of Russia’s full-scale invasion in February 2022.
In 2024, the bank supported projects to ensure energy supply, restore critical infrastructure, and support the education sector across Ukraine.
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