Ukraine’s Lviv to benefit from €22 million EBRD loan backed by EU first-loss guarantee
The European Bank for Reconstruction and Development (EBRD) and the European Union (EU) are joining forces to provide emergency support for Lviv to ensure the uninterrupted provision of vital services in the largest city in western Ukraine despite acute pressure from the Covid-19 pandemic.
The EBRD is extending a €10 million loan to key municipal service providers and is prepared to lend another €12 million to meet the needs of the city, a longstanding client. The EU is backing the loan with a first-loss guarantee under the European Fund for Sustainable Development (EFSD), a facility to support sustainable investments in the EU neighbourhood.
The joint support will meet the liquidity and working-capital needs of the transport company Lvivelectrotrans, the road construction, maintenance and traffic-management enterprise Lvivavtodor, the water operator Lvivvodokanal, the district heating company Lvivteploenergo and the waste management operator Zelene Misto. It will compensate for temporary loss of revenue due to the health crisis and will cover day-to-day operations.
Matteo Patrone, EBRD Managing Director for Eastern Europe and the Caucasus, said: “This loan is another testament to our commitment to Ukraine and its citizens. The city of Lviv has been a strong, longstanding partner of the EBRD and, now that its municipal enterprises are facing financial strain, we are ready to stand by the city, together with the EU, to ensure that vital infrastructure remains operational and available.”
Deputy head of EU delegation to Ukraine Mr Rémi Duflot added: “I had the opportunity to visit your city recently. This loan agreement is an innovative one for the European Union, as it is signed within the framework of the new European program of budget communities.
This is unprecedented support during the COVID-19 pandemic on important projects. The terms of this loan agreement are so extraordinary, thanks to the EU community, namely EFSD guarantee. I hope that this cooperation will be the beginning of a new stage in the financing and promotion of projects. The methods of financial engineering, which are laid down in the European program of sustainable development, provide better and more accessible conditions for financing, in particular in various European financial institutions.
As you know, the program is funded, including from European Union taxpayers’ money. Therefore, not only as a representative of the European Union, but also as a taxpayer, I am proud that it can help our partner and neighbor – Ukraine.”
To date, the EBRD has provided almost €140 million to the city of Lviv to help develop its transport infrastructure, improve water supply and waste management, and support road building and district heating. It has also financed a modern retail and entertainment centre, creating jobs and attracting more investment. The Bank operates an office in Lviv to better meet the financing needs of the city and businesses in western Ukraine.
Ukraine is a top-three investment destination for the EBRD. In the past two years alone, the Bank has committed €2 billion to the economy. The EBRD finances infrastructure, energy efficiency and energy security, agricultural and industrial projects as well as smaller businesses. The investments are combined with support for policies that promote a more enabling business environment.
To watch the signing of the Loan agreement on Youtube channel lvivadm