EIB records high investments in Ukraine in 2020: over €1 billion for infrastructure, environment, innovation and post-COVID-19 recovery
- EU bank invested over €1 billion in Ukraine in 2020, the second-highest amount in the history of its activities in the country.
- EIB investments help Ukraine grow and develop faster and more sustainably on its path towards the European Union.
- EU grants will support most of the EIB loans signed in 2020 that offer technical assistance in project preparation and management.
The European Investment Bank (EIB) invested over €1 billion in Ukraine in 2020 alone, the year of the worst global health and economic crisis for generations, marking the second-highest investment volume in the history of the Bank’s activities in the country. This represents an increase of more than 50% compared to 2019. Total EIB investment in Ukraine has now reached €7.5 billion.
In response to the COVID-19 crisis, the EU bank rapidly redirected its efforts towards fighting the pandemic and its economic consequences and supporting the faster economic and social recovery of Ukraine.
The EIB financed small and medium-sized enterprises (SMEs) to ensure they can survive the crisis and continue to provide jobs. It also invested in infrastructure rehabilitation and development, innovation and improvements in public transport and key public services such as education and the postal service. In 2020, the EIB supported 75 SMEs and mid-caps and helped sustain close to 18 500 jobs in Ukraine.
EIB Vice-President Teresa Czerwińska, who is responsible for operations in Ukraine, said: “Despite a tough and challenging 2020, the EIB continued to make a much-needed contribution to the Ukrainian economy and its people. We delivered record investment of over €1 billion in Ukraine in 2020, focusing our operations on support for conflict-affected regions of eastern Ukraine, sustainable and green infrastructure, digitalisation, innovation and business recovery after COVID-19. Ukraine is the main recipient country of EIB investments in the Eastern Neighbourhood, accounting for more than 60% of the EIB’s lending activity in the region and supporting the European Union’s policies in its neighbourhood. We are extremely proud of our continuing role in the economic and social development of Ukraine. Our engagement and partnership with the country is stronger than ever.”
Head of the EIB Resident Representation for Ukraine Jean-Erik de Zagon added: “The coronavirus made 2020 an exceptionally challenging year. But crises, even the most acute, always bring opportunities. As far as the cooperation between the EIB and Ukraine is concerned, 2020 gave us many reasons for optimism. We worked on projects which I hope will contribute significantly to opportunities, prosperity and living standards for Ukrainian people, for example through renovating infrastructure in conflict-affected eastern Ukraine, enhancing the energy efficiency of public buildings or improving the quality and reliability of public transport and road infrastructure. With a portfolio worth €7.5 billion in signed loans and guarantees since 2007, the EIB is proud to be making a real difference to the country and its people – this is the most important result of our work.”
The Ambassador Matti Maasikas, Head of the European Union Delegation to Ukraine, said: “Since 2014, the European Union has mobilised over €16 billion in grants and loans to support Ukraine’s reform agenda. The European Investment Bank has been a key partner in this, providing investment in vital areas such as rehabilitation of civilian infrastructure in conflict-affected eastern Ukraine, transport and energy efficiency. In 2020, the EU Bank has played an essential part of #TeamEurope, the EU’s global approach to fight the COVID-19 pandemic, and particularly in the mobilisation of over €190 million of EU support package for Ukraine.”
The EIB operations signed in 2020 supported the priorities of the Government of Ukraine and the European Union and helped the country to recover faster from the pandemic and to increase its economic resilience.
Reinforcing infrastructure, including in conflict-affected eastern Ukraine
The EIB stepped up its investment in 2020 to address the long-term social and economic development of eastern Ukraine and the integration of conflict-affected regions, as well as the modernisation of road infrastructure in the country.
Under a€340 million loan, the conflict-affected regions of eastern Ukraine will receive hands-on support to restore social infrastructure, improve public utility services and repair damaged administrative buildings and other key elements, including hospitals, schools, kindergartens, post offices, street lighting, sewerage systems, municipal transport and relevant transport infrastructure.
To improve living and business conditions in eastern Ukraine, the EIB has also invested €100 million to modernise 183 km of roads in the Luhansk region. Citizens and businesses in the region will benefit from a modern road network along the Troitske-Severodonetsk-Starobilsk route, enjoying reduced travelling times and vehicle maintenance costs as well as improved road safety.
Investing in greater energy efficiency for public buildings
In its role as the EU climate bank, the EIB supports Ukraine in implementing an ambitious energy efficiency programme. A €300 million loan will allow Ukraine to improve the energy efficiency of some 1 000 public-owned buildings, including schools, cultural centres, kindergartens and hospitals. The loan will also extend the operational life of key social, healthcare, administrative and cultural buildings by at least 20 years and reduce CO2 emissions by 1 250 000 tonnes.
Improving public transport and postal services
The EIB also channelled €200 million into improving public transport in Ukraine. As beneficiaries of the loan, up to 20 medium-sized and large cities will modernise their electric public transport rolling stock (trams, trolleybuses, metro coaches and electric buses) as well as rehabilitating and constructing new public transport infrastructure (e.g. tram lines, trolleybus lanes, sub-stations and depots).
The EU bank also provided a €30 million loan to support the modernisation and digitalisation of the Ukrainian postal service. The loan will allow the national postal service provider, Ukrposhta, to expand its infrastructure with up to three sorting hubs, 20 depots and related IT infrastructure. With its loan from the EIB, Ukrposhta will design and roll out a new, state-of-the-art parcel logistics network, reduce delivery times and improve the overall quality of the postal service for millions of Ukrainians.
Supporting innovation in Ukraine
To boost Ukrainian innovation and the country’s entrepreneurial ecosystem, the EIB invested €50 million in Ukraine’s first vertically-integrated innovation park, UNIT.City. The EIB loan will finance the Ukrainian Innovation Campus Project, which will cover the design, renovation and construction of new purpose-built facilities and structures in UNIT.City. Money will be allocated for the construction of new campuses at the innovation park – B15, B16, B17 and U1 – with a total area of 70 000 m2. The project will generate 549 full-time and 2 400 temporary jobs, as well as indirectly supporting some 15 000 jobs around UNIT.City.
Strengthening business resilience and public health during COVID-19
The EIB is also actively engaged in supporting the Government of Ukraine in combating COVID-19. As of the end of 2020, the EIB has agreed to repurpose €50 million from an existing facility (the Ukraine Municipal Infrastructure Programme – UMIP, with a total of €400 million) to finance Ukrainian efforts aimed at combating COVID-19, with plans to use this tranche for purchasing the COVID-19 vaccine.
In 2020, the EIB made €75 million available to local financial intermediaries – ProCredit Bank Ukraine (€25 million), PRAVEX BANK (€30 million) and Ukreximbank (the equivalent of €20 million in local currency) – to support Ukrainian SMEs and mid-caps affected by the economic impact of the coronavirus pandemic. These operations are part of Team Europe’s overall response to the COVID-19 crisis, which aims to support the sustainable social and economic recovery of the country.
Setting a green and digital agenda for 2021
The European Investment Bank remains committed to the Eastern Partnership (EaP) region and to Ukraine in particular. The EIB’s transition towards its role of EU climate bank and the deployment of its digital agenda will be the operational anchors for the Bank’s lending objectives in Ukraine in 2021 and beyond.