The European Investment Bank (EIB) signed three loans worth 640 million euros in total with Ukraine’s Prime Minister Denys Shmyhal on Dec. 9.
The loans will consist of 340 million euros dedicated to rehabilitating infrastructure in war-torn eastern Ukraine, 100 million euros to modernize roads in eastern Ukraine’s Luhansk Oblast, and 200 million euros to improve public transport in Ukraine.
These loans are part of a bigger agreement worth 1 billion euros, a record year for the EIB in Ukraine, Jean-Erik De Zagon, head of the EIB Resident Representation in Ukraine said during an online briefing held after the signing on Dec. 9.
The signing is also the direct outcome of the RE: Think investment forum held in Mariupol in October 2019, de Zagon added.
“It is the positive outcome of the investment forum in Mariupol,” he said.
Repair infrastructures and roads
The first loan of 340 million euros will be dedicated to hundreds of small to medium-sized projects at a municipal level in 20 cities of eastern Ukraine, to improve public utility services and repair key social infrastructure, including hospitals, schools and kindergartens.
The loan comes with 15 million euros in EU grants to fund technical assistance.
It will benefit 13.7 million people living in the area, a strategic issue in the conflict-affected regions hit by the ongoing war and the COVID-19 crisis, the EIB President Werner Hoyer said during the signing.
“Refurbished schools, hospitals and public services will also help the country to recover faster from the pandemic and to increase its economic resilience,” he said.
100 million euros will also be invested to fix 183 kilometers of roads in the Luhansk Oblast, thus improving road safety for roughly 2 million people, in which the EIB will finance the rebuilding of road infrastructure and installation of intelligent transportation system equipment, such as weigh-in-motion stations.
Public transportation
The third loan of the package worth 200 million euros will go to improve public transportation in 20 medium-sized and large cities in Ukraine including Kyiv and Kharkiv, as well as connections between the cities in the Azov Sea in eastern Ukraine, including Mariupol with the rest of the country.
Four million euros in grants from the EU’s Neighbourhood Investment Platform will be added to the loan for technical assistance.
The whole package will be distributed through the Ministry of Communities and Territories Development and the Ministry of Infrastructure, which will distribute them to municipalities according to the transparency of the projects, de Zagon said.
“We closely monitor the use of funds,” he said.
Ukraine accounts for 50% of EIB loans, making it the main recipient of the bank in Eastern Neighbourhood since 2007, adding up to a portfolio of loans and guarantees totaling 6.83 billion euros overall.
