$200 Million Grant Supported by the World Bank Will Help Repair Energy Infrastructure in Ukraine

The World Bank announced $200 million in grant financing for a project that will repair Ukraine’s energy infrastructure. The funds for this project are provided by the Ukraine Relief, Recovery, Reconstruction and Reform Trust Fund, with additional funding of up to $300 million envisaged to come from partners through grants and other contributions as the project expands its scope.

The Restoration Project of Winterization and Energy Resources will support emergency repairs to the electricity transmission and heating infrastructure by urgently procuring critical equipment. Emergency electricity equipment includes autotransformers, transmission transformers, switchgears and circuit breakers, relay protection devices and other equipment. Emergency equipment for the heating infrastructure includes mobile heat-only boilers, mobile mini cogeneration units, as well as other equipment and parts to repair district heating networks.

“Now in its second year, Russia’s invasion of Ukraine continues to have devastating economic and humanitarian consequences,” said World Bank Managing Director of Operations Anna Bjerde. “Energy infrastructure has suffered $11 billion in damages over the last year and is one of the most critical areas where Ukraine needs urgent support. We are grateful for strong partnership with Ukraine and development partners to support this critical sector and act fast.”

During the fall and winter months, more than 50 percent of Ukraine’s power infrastructure was damaged, resulting in power outages across the country and contributing to shortages of food, heating, and water. Millions of Ukrainians had limited access to electricity; many areas had only a few hours of supply per day. The energy grids in Kharkivska, Donetska, Khersonska and Zaporizka regions along the war’s frontline have been most affected.

Due to Ukraine’s ongoing efforts to repair the power systems, most power plants have connected back to the grid and there have been almost no major blackouts in major cities over the last month. However, significant damages to transmission substations continue to constrain their output, leading to scheduled load shedding and outages in most regions.

“Restoring energy infrastructure is one of the key investment needs for Ukraine at this time,” said World Bank Vice President for Europe and Central Asia Antonella Bassani. “This is critical both for recovery efforts and for resuming disrupted economic production and flows.”

Restoring the energy grid is a top priority the Government of Ukraine has identified for 2023, as it accounts for 11 percent of estimated needs according to the updated Rapid Damage and Needs Assessment (RDNA2) released in March.

The Ukraine Relief, Recovery, Reconstruction and Reform Trust Fund (URTF) was set up by the World Bank to coordinate grant financing for sustaining Ukraine’s government functions, delivering services, and implementing relief efforts. The URTF is a flexible platform that allows the World Bank to prioritize and channel funding to the most urgent development needs identified by the Ukrainian government, with current contributions from Austria, Canada, Iceland, Japan, Lithuania, the Netherlands, Norway, Sweden, Switzerland.

To date, the World Bank has mobilized more than $23 billion in emergency financing for Ukraine, including commitments and pledges from donors. More than $20 billion of this financing has been disbursed through several projects, including Public Expenditures for Administrative Capacity Endurance (PEACE) Project. See a full list of total World Bank Group mobilized financing for Ukraine.

Source – World Bank