KYIV, Feb 6 (Reuters) - The European Bank for Reconstruction and Development intends to invest a minimum of 1.5 billion euros ($1.56 billion) this year to bolster Ukraine's economy and businesses amidst the ongoing conflict, according to the EBRD's chief speaking to Reuters on Thursday.
Since February 2022, the EBRD has significantly increased its investment activities in Ukraine, with over 6.2 billion euros allocated across various sectors. In the previous year, the bank allocated a record-breaking 2.4 billion euros to the country.
EBRD President Odile Renaud-Basso emphasized the bank's continued focus on supporting Ukraine's private sector, especially in energy, following recurrent attacks on the national grid by Russia, in addition to national and municipal infrastructure.
"Our aim is to maintain this investment level. Our target is a minimum of 1.5 billion euros, with plans to potentially exceed this amount," Renaud-Basso stated during an interview while in Kyiv.
She explained that the bank's investments are demand-driven and expressed readiness to elevate investments to around 3 billion euros annually once the conflict ends.
The Ukrainian economy has suffered significant setbacks due to the conflict, with millions displaced, cities and infrastructure severely damaged, and trade disrupted. This led to a nearly one-third economic contraction in 2022, with subsequent growth in 2023 and 2024 insufficient to restore pre-war levels, necessitating foreign financial support for stability. The EBRD plays a crucial role in investing in both state-owned enterprises and private companies.
Renaud-Basso highlighted the energy sector as a primary focus for this year and beyond, as efforts to modernize and promote renewable energy could drive private investment post-conflict.
"There is substantial potential here, which will attract foreign investment and spur economic activity, laying the foundation for growth," she noted.
Due to power infrastructure damage from Russian bombardments starting in March 2024, Ukraine faced severe energy shortages. The EBRD provided funding to Ukrenergo, Ukrhydrenergo, and Ukrnafta, along with backing for small-scale power generation.
During her visit in Kyiv, Renaud-Basso met with President Volodymyr Zelenskiy and discussed strategies to sustain key reform programs following the suspension of U.S. Agency for International Development (USAID) assistance by President Donald Trump. Renaud-Basso indicated that the EBRD's ability to fill this gap would be limited.
($1 = 0.9644 euros)