The European Investment Bank signed with Ukraine two loan agreements worth 330 million euros during the European Union-Ukraine summit held in Brussels on Oct. 6.
Most of the credit money, $300 million euros, will go on improving energy efficiency in Ukraine, while 30 million euros will be spent on the digitalization of state postal operator Ukrposhta.
These two loans are part of a bigger agreement worth 1 billion euros, Jean-Erik De Zagon, head of the EIB Resident Representation in Ukraine, said during an online briefing held before the summit on Oct. 6.
“We still hope to sign for 1 billion this year,” de Zagon said. It is still unknown where exactly the money will go, it depends on the future negotiations that the EIB will have with the Ukrainian government.
Energy efficiency
The first loan worth 300 million euros aims to improve the energy efficiency of roughly 1,000 public-owned buildings, including schools, cultural centers, kindergartens and hospitals, EIB Vice-President Teresa Czerwinska said.
The first loan, which was initially agreed upon on June 2, will help renovate these public buildings and reduce carbon dioxide emissions by 1.25 million tons, according to Czerwinska.
“Projects like this one improve quality of life, protect the environment… making Ukraine an even better place to live and do business,” Czerwinska said.
The upgrades will include new meters and energy consumption control systems, the modernization of heating, ventilation and lighting systems as well as thermal insulation to exterior surfaces such as roofs, windows and doors.
This will be implemented in small and medium-sized municipalities that currently lack money to carry out any renovations; 2.5 million people across the country will benefit from this, Czerwinska said.
The EIB sent a team of engineers from Luxembourg at the beginning of 2020 to assess the cost of the project; the agreement also includes technical assistance from the European Union for implementing the projects on which Ukraine will spend 22 out of those 300 million euros.
Caring about energy efficiency shows that the government of Ukraine is committed to pushing the country towards energy independence, according to de Zagon.
Saving energy means Ukraine consumes less and can import less gas from Russia, for example.
“It’s a very strategic and a major project,” he said, adding that the EIB will disburse more in the years to come.
Digitalizing Ukrposhta
Ukraine has been the main recipient of EIB lending in the past years, representing half of the European bank’s lending in Eastern Europe.
So far, the EIB disbursed over 6 billion euros worth of investment to improve the infrastructure of Ukraine in accordance with international standards. De Zagon said about 1.9 billion euros more are committed towards Ukraine.
Digitalizing the logistics network of Ukrposhta is only one of these projects, which is why the state postal operator has received 30 million euros from the EIB, Lilyana Pavlova, EIB vice president in charge of the project said.
She said that transforming Ukrposhta into an online service could make it easier, for example, to transfer pension money to the bank accounts of Ukrainian pensioners rather than making them wait in long lines.
The money will be spent on building three new sorting centers, 20 post depots and the development of IT infrastructure at Ukrposhta. According to her, the investment will improve the level of postal services and reduce the delivery time for international and domestic parcels, letters and documents.
But this is only the first phase, because “we want it to be fully digitalized,” Pavlova added.
According to her, the EIB also plans to loan Ukraine 200 million euros to modernize public transportation in the country. The agreement will be signed in November, she said.
