The European Union is providing nearly €600 million in new financing to Ukraine, with a significant portion allocated to restoring the country’s energy infrastructure, including major hydropower plants.
The European Investment Bank (EIB) Group and the European Commission announced the funding during the Ukraine Recovery Conference in Rome. The new package brings the EIB Group’s total support for Ukraine to €3.6 billion since the start of Russia’s full-scale invasion in 2022.
A key element of the package is a €120 million EIB loan to Ukrhydroenergo, Ukraine’s largest hydropower company. The loan will fund rehabilitation works at three strategic hydropower facilities – Kaniv, Kremenchuk and Dnipro – and support urgent repairs at other plants. These efforts aim to stabilise electricity supply in the face of continued Russian attacks on Ukraine’s energy infrastructure.
“The agreements announced today reflect the strength of our commitment to Ukraine, and our determination to respond to the country’s most urgent needs – through critical infrastructure, support for businesses in Ukraine and EU companies wanting to trade and export to the country,” said EIB President Nadia Calviño.
Hydropower plays a central role in Ukraine’s energy mix, providing both base load and flexible capacity. Damage from military strikes has significantly disrupted the sector, making restoration of facilities essential to the country’s energy resilience.
Beyond hydropower, the package includes two €50 million EIB loans to Ukrgasbank and Oschadbank, which will channel funding to municipalities for improvements to district heating, decentralised energy generation and public-building energy efficiency.
In the transport sector, a €134 million loan will be directed to Ukraine’s national Agency for Restoration. The funds will support repair of key roads and bridges, including the M06 highway linking Kyiv with Hungary, and improve border infrastructure to facilitate trade.
Deputy Prime Minister for Restoration of Ukraine Oleksii Kuleba highlighted the role of infrastructure in economic recovery: “This starts with providing reliable infrastructure – roads and bridges that reconnect communities and power solutions that secure our energy system.”
To support Ukraine’s small and medium-sized enterprises (SMEs), the EIB has issued new loans totalling €230 million through Ukreximbank, Ukrgasbank and Bank Lviv. In addition, EU-backed guarantees will support further lending through Kredobank and Piraeus Bank’s Ukrainian subsidiary.
The EU is also expanding its export credit support for Ukraine. Ten Member States – Denmark, Finland, France, Germany, Italy, Latvia, Romania, Slovakia, Slovenia and Spain – have joined the InvestEU Ukraine Export Credit Pilot, a €300 million guarantee facility designed to reduce risks for exporters supplying goods and services to Ukraine.
“Rebuilding a strong, modern Ukraine. That is exactly what today’s EU-backed finance agreements will achieve. With support for resilient energy systems, transport networks, and businesses. Building hope and opportunity,” said European Commissioner for Enlargement Marta Kos.
The EIB also introduced Ukraine FIRST – the Ukraine Facility for Infrastructure Reconstruction – a €30 million project preparation initiative developed with the European Bank for Reconstruction and Development (EBRD) and the European Commission. The programme will help fast-track investments in energy, transport and other critical sectors by supporting feasibility studies, technical assessments and procurement planning.
Further energy-focused measures include a €20 million grant from the German government via the International Climate Initiative (IKI) Fund. This will support renewable energy integration in municipalities already working with the EIB, including the installation of solar panels, batteries and heat pumps. An additional €19.6 million from Germany will go to the IKI’s Just Transition programme, which targets support to coal-dependent regions in Ukraine.
“The need for safety, warmth and the chance to build a better future. That’s why we help communities rebuild, keep homes warm, and support Ukrainian businesses,” said EIB Vice-President Teresa Czerwińska.
The package also includes measures to strengthen oversight. A new agreement between the EIB and Ukraine’s State Audit Service will enhance monitoring of EU-financed projects, supporting anti-fraud efforts and promoting good governance.
The new financing is part of broader EU efforts to maintain Ukraine’s energy security and economic stability while laying groundwork for long-term recovery and EU integration
