OREANDA-NEWS. June 13, 2007. The European Bank for Reconstruction and Development and the Government of Ukraine have signed an agreement that will significantly boost EBRD investments in the Ukrainian public sector over the next three years, reported the press-centre of  EBRD.

The additional funds will be dedicated to financing a much-needed modernisation of Ukraine’s transport, power and municipal infrastructure, and will include a comprehensive programme of energy efficiency measures.

The agreement is expected to increase annual public sector investments by the EBRD in Ukraine to between 200 and 400 million euros between 2007 and 2009. That would compare with average annual investments in this sector over the previous two years of around 180 million euros.

The programme, which builds on the success of the previous programme for 2005-2006, will be a component of the new EBRD Country Strategy for Ukraine which is to be adopted by the end of 2007. The programme, in particular envisages financing for the following sectors:

Transport and communications: Renewal of the railway rolling stock, new road sector projects, development of port and regional airport infrastructure as well as an upgrade of Ukraine’s air navigation system. Other projects may include Bank participation in the development of logistics centres for Ukrposhta (Ukraine Post Office) and development of the state digital television network.

Power sector: A number of high voltage transmission projects, including a 750Kv Rivne NPP – Kiev line, 330Kv lines in Odessa region and western Ukraine, a 500MW Kaniv Hydro Pump Storage Station Construction as well as a power distribution project in the Crimea.

Municipal infrastructure: implementation of district heating, waste water and energy efficiency projects on the basis of municipal guarantees in Kiev and several other large and medium-sized cities of Ukraine.

Natural resources: Projects with the Ukrainian oil & gas extraction and transportation companies (NJSC “Naftogaz of Ukraine”, SC “Ukrtransgas” and JSC “Ukrtransnafta”) ranging from installing new efficient compressor stations and the rehabilitation of underground gas storage facilities to the construction of reservoirs at oil terminals.

Energy efficiency: Most of the projects agreed in the programme have strong energy efficiency components. The parties, however, agreed to explore the potential for energy efficiency projects in other sectors and to promote Carbon Finance.

The overall volume of financing for the public sector over the period covered by the Programme is expected to reach one billion Euros. In addition, one of the key objectives of this programme will be the mobilisation of co-financing for Ukrainian projects from other leading international financial institutions, in particular the European Investment Bank.
 
The EBRD and the Government of Ukraine will continue the policy dialogue that is crucial for reform of key sectors of the Ukrainian economy through the work of the multilateral consultation bodies (Energy Sector Task Force, the Transport Sector Working Group etc.). The two parties agreed to continue close cooperation on the promotion of Public Private Partnerships in the road sector and on the liberalisation of the telecom sector.

The European Bank for Reconstruction and Development is the biggest financial investor in Ukraine. As of the end January 2007 it had committed over ?2,87 billion through more than 130 projects.