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EBRD loan to support Ukraine's power transmission company

·1-min read
FILE PHOTO: EBRD warns war in Ukraine will impact 2022 finances, after record profit

MARRAKECH, Morocco (Reuters) - The European Bank for Reconstruction and Development (EBRD) will allow Ukraine's electricity transmission company Ukrenergo to use 50 million euros of a previously agreed loan as emergency liquidity, the lender said on Wednesday.

The European Union will provide a first loss guarantee to mitigate the EBRD's risk in making the loan, the bank said, with the war in Ukraine hitting the country's economy and institutions.

The money will come from a 147 million-euro loan that was agreed in 2019 to improve Ukraine's transmission network, but which has not yet been disbursed.

"The war triggered urgent liquidity needs that prompted Ukrenergo to seek the repurposing of these funds," the bank said in a statement.

Ukrenergo faces a fall in electricity consumption and in customer payments because of the war, and it needs to maintain the power grid as well as nuclear generators to ensure supply to industries and households, EBRD added.

The EU is working with the EBRD to provide coverage for two more loans in the coming weeks to support Ukraine's railway and transport sector, EU trade commissioner Valdis Dombrovskis said on the sidelines of the EBRD's annual meeting in Marrakech.

The bank has said it would invest 1 billion euros this year in supporting the Ukrainian economy.

(Reporting by Ahmed Eljechtimi, writing by Angus McDowall, Editing by Alex Richardson)

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