The package consists of a senior loan of up to €75 million from the EBRD, supported by an EU guarantee, alongside up to €20 million in investment grants from international donors, the EBRD announced on 8 January. The balance of the total cost of the hydropower modernization project of €120 million (US$ 140 million) will be covered from UHE’s own funds.
“The project will enhance the reliability of hydropower plants and, accordingly, the stability of Ukraine’s power system,” said Valentyn Gvozdiy, Head of Ukrhydroenergo’s supervisory board. “It is an important confirmation of international partners’ confidence in Ukrhydroenergo and the quality of the company’s corporate governance.”
The financing will be used to supply essential equipment for hydro plants, including emergency reserve stocks of electrical components, and consultancy services for project implementation, the EBRD, Ukraine’s single largest institutional investor, said. Donor-funded technical cooperation will support procurement capacity building, specialist training for hydro engineers, improvements in environmental, social and governance practices, and the development of a gender action plan.
The EBRD loan is backed by a guarantee from the EU under the Ukraine Investment Framework, which aims to unlock financing for the country’s recovery and long-term growth. The project falls under the EBRD-UIF HI BAR agreement signed in 2024, with a focus on strategic sectors such as renewable energy.
The investment will allow Ukrhydroenergo to replace damaged and worn components at selected hydropower plants, improving efficiency and increasing renewable electricity output. When completed, the project is expected to increase production by about 223 GWh/year, helping to reduce reliance on imports and support peak demand, as well as reduce CO2 emissions by more than 96 000 tonnes/year.
The project is aligned with the EBRD’s Resilience and Livelihoods Framework, and includes a training programme to address skills gaps among engineering staff, supporting the integration of new equipment and compliance with European standards. All equipment will meet EU environmental and safety requirements, with works carried out at existing facilities and no land acquisition or displacement will be involved. The investment is consistent with the Paris Agreement’s mitigation and adaptation goals and qualifies as 100 per cent green finance under the EBRD’s Green Economy Transition methodology.
The EBRD, alongside the Italian Government, previously signed a €200 million (US$ 234 million) financial package for Ukrhydroenergo, in 2024. The first €50 million tranche was distributed in March last year.
The EBRD has significantly expanded its operations in Ukraine since Russia’s full-scale invasion in 2022. By the end of 2025, total wartime investments had totalled nearly €9 billion, spanning energy security, critical infrastructure, food security, trade and private-sector support.
