EBRD plans to invest at least $1.56 billion in Ukraine's war-hit economy this year

By Olena Harmash

KYIV (Reuters) - The European Bank for Reconstruction and Development plans to invest at least 1.5 billion euros ($1.56 billion) this year to support Ukraine's economy and businesses during wartime, the EBRD's chief told Reuters on Thursday.

Since the start of Russia's invasion in February 2022, the EBRD has stepped up operations in Ukraine, investing more than 6.2 billion euros across various sectors. Last year the bank devoted a record 2.4 billion euros to the country.

EBRD President Odile Renaud-Basso said the bank would keep its focus on Ukraine's private sector, particularly energy after repeated Russian attacks on the national grid, as well as national and municipal infrastructure.

"Our plan is to continue with this level of investment. At a minimum, we aim for 1.5 billion euros of investment but if we can do more..., we will do it," Renaud-Basso said in the interview during a visit to Kyiv.

She said the bank's operations were demand-driven and it was prepared to increase its investments to about 3 billion euros a year in Ukraine once the war was over.

The Ukrainian economy has been devastated by the war with millions of people fleeing the fighting, cities and infrastructure heavily damaged by airstrikes, and exports and supply chains disrupted.

The economy shrank by about a third in 2022 and, despite returning to growth in 2023 and 2024, remains smaller than prior to the war. The government relies on foreign financial aid to maintain its macroeconomic and financial stability. The EBRD is a key investor in both state companies and private businesses.

ENERGY SECTOR IN FOCUS

Renaud-Basso said Ukraine's energy sector was among the key priorities this year and also going forward as projects to modernise the industry and develop renewable energy could become a driver of private investment once the war was over.

"There is a lot of potential, therefore it will trigger a lot of interest from foreign investors, and it will trigger a lot of activity in the country – this will really drive growth dynamics," she said.

Ukraine has faced severe energy challenges since Russia stepped up bombardments of the power infrastructure in March 2024, knocking out about half the available generating capacity and precipitating blackouts across the country.

The EBRD has provided financing to grid operator Ukrenergo, hydropower company Ukrhydrenergo and state energy company Ukrnafta, and also supported small-scale generation capacity.

While in Kyiv, Renaud-Basso met President Volodymyr Zelenskiy and other officials. They discussed how to continue funding some key reform initiatives after President Donald Trump paused development assistance from the U.S. Agency for International Development (USAID). The EBRD would be able to step in only in a limited capacity, Renaud-Basso said.

($1 = 0.9644 euros)

(Reporting by Olena Harmash; editing by Mark Heinrich)