International Finance Package Powers Ukraine’s Wind Energy Future with €157 Million

Russia's targeted attacks on Ukrainian energy facilities have underscored the urgent need for diversification and resilience in the country’s power sector.

An ambitious international finance initiative has brought a €157 million project finance debt to support a pioneering private wind power project in Ukraine, marking a significant step toward enhancing the country's energy security. Announced today in Kyiv, the deal is a collaborative effort led by the European Bank for Reconstruction and Development (EBRD), the International Finance Corporation (IFC), and the Black Sea Trade and Development Bank (BSTDB), with the backing of the European Union (EU), the United Kingdom, and the Clean Technology Fund (CTF).

This renewable energy initiative is one of the first greenfield private projects in Ukraine's power sector since the beginning of Russia’s invasion in 2022. It forms a critical part of Ukraine’s transition toward renewable energy sources and provides a vital boost to the country’s energy security amid ongoing threats to its infrastructure. Russia's targeted attacks on Ukrainian energy facilities have underscored the urgent need for diversification and resilience in the country’s power sector.

A Collaborative Effort to Revitalize Ukraine’s Energy Infrastructure

The €157 million financing package is structured as follows: the EBRD and IFC will each contribute €60 million, while BSTDB will provide €37 million in loans to Wind Power GSI Volyn LLC and Wind Power GSI Volyn 3 LLC, the two special purpose vehicles established in Ukraine to oversee the development and operation of the wind plants. The total cost of the project is estimated at €225 million (excluding VAT), with the remaining funds being provided by equity from the project sponsor, GNG Group, also known as Galnaftogaz or OKKO Group, a prominent Ukrainian company.

This funding will enable the construction and operation of wind power plants in Ukraine with a combined capacity of 147 MW. These plants are expected to generate at least 380 GWh of renewable, zero-carbon electricity annually. This will not only contribute significantly to Ukraine’s green energy goals but also reduce the country’s carbon dioxide emissions by an estimated 245,000 tons per year.

The EBRD’s contribution is backed by financial guarantees from the European Union under its Ukraine Investment Framework. This framework is part of the EU’s broader efforts to support Ukraine’s economic resilience and energy security during the ongoing war. IFC and BSTDB’s loans are similarly supported by EU guarantees under the same framework, with additional backing from the UK’s Foreign, Commonwealth & Development Office (FCDO), which provided grant funding as a first-loss guarantee to unlock these loans. The IFC’s package also includes €10 million in debt financing from the CTF, enabled by pre-investment work supported by Austria’s Federal Ministry of Finance and Switzerland’s State Secretariat for Economic Affairs (SECO).

Strengthening Ukraine’s Energy Security Amid War

Ukraine has faced significant challenges in maintaining its energy infrastructure during the war, with extensive damage to its power plants and transmission lines. The wind power project will help fill the gaps created by these losses, ensuring that the country’s electricity supply remains stable and that it continues to make progress on its decarbonization goals.

“This project addresses several key challenges at once,” said Vasyl Danyliak, CEO of OKKO Group. “It strengthens the country’s energy security and independence, while also advancing the transition to zero-emission electricity production.”

Matteo Patrone, Vice President of Banking at the EBRD, emphasized the significance of the project in the context of Ukraine's ongoing recovery: “With significant power generation capacity destroyed as a result of the war, this investment is crucial to address the severe energy shortfall. It supports Ukraine's decarbonization goals and boosts the private sector's role in the development of the renewable energy sector.”

Ines Rocha, IFC’s Regional Director for Europe, described the project as a vital step in Ukraine’s recovery: “This project will ensure that people can keep the lights on, stay warm, and stay connected – therefore marking a significant milestone in Ukraine’s recovery. It also sends a strong signal that Ukraine is open for private investment and is capable of meeting the challenges of tomorrow.”

A Strong Signal for Private Investment

The collaboration between public and private sector entities on this project sends a clear message to other investors about the opportunities within Ukraine's energy sector, even amidst the ongoing conflict. The involvement of international financial institutions like EBRD, IFC, and BSTDB, as well as the support from the EU and UK, demonstrates a long-term commitment to Ukraine's sustainable development.

Dr. Serhat Köksal, President of BSTDB, underscored the importance of projects like this one in building a sustainable energy future for Ukraine: “Supporting projects that strengthen the country’s energy independence and accelerate its transition to renewable energy is a priority for BSTDB. This wind power project is a tangible step toward building a sustainable energy future for Ukraine.”

The European Union has been actively involved in Ukraine’s energy transformation, with Stefan Schleuning, Head of Cooperation at the EU Delegation to Ukraine, highlighting the importance of the project: “This is a smart investment at a critical time. It boosts Ukraine’s energy security and supports its shift to renewables. The EU is glad to help make it happen.”

The UK’s Commitment to Ukraine’s Green Recovery

Martin Harris, the British Ambassador to Ukraine, also expressed support for the project, which has the capacity to power the equivalent of up to 80,000 homes. “The UK stands firmly behind Ukraine's green recovery,” Harris said. “These sustainable energy solutions not only help Ukraine withstand Russia's attacks on the energy grid but also build a more sustainable future economy. It’s encouraging to see Ukrainian businesses diversifying their energy sources with cleaner, modern technologies. This strengthens Ukraine’s entire energy sector – a key priority behind the 100-Year Partnership Agreement that Prime Minister Keir Starmer and President Volodymyr Zelenskyy signed earlier this year.”

Long-term Support for Ukraine’s Energy Sector

The EBRD and IFC have been working closely with OKKO Group for years, supporting the company’s decarbonization strategy as Ukraine moves toward integration with the European Union and a future net-zero economy. Since the outbreak of the war in 2022, both institutions have continued to support OKKO’s initiatives despite the uncertain and volatile market conditions.

The World Bank Group has also played a crucial role in Ukraine’s energy sector recovery, providing both short-term assistance to restore essential infrastructure and longer-term support for sustainable energy projects. The IFC alone has delivered $2.2 billion to support Ukraine's private sector, including $760 million in mobilization through its Economic Resilience Action (ERA) Program for Ukraine.

A Bright Future for Ukraine’s Energy Landscape

This wind power project represents more than just a renewable energy investment; it is a symbol of Ukraine’s resilience and determination to rebuild and modernize its infrastructure. The project will not only help Ukraine reduce its dependence on fossil fuels and foreign energy supplies but also contribute to the country’s broader goal of achieving energy independence and decarbonization in the years to come. The efforts of the international financial institutions and the Ukrainian private sector in this project are laying the foundation for a cleaner, more sustainable energy future for Ukraine, helping the country build a stronger, more resilient economy amid the challenges of war.