The EU loan will not be used for energy sector recovery: where will the money come from?
26 April 19:12
EU loan funds will not be allocated to the restoration of the energy sector, which was destroyed as a result of Russian shelling. Sources familiar with the intended use of the funds informed RBC-Ukraine of this, and the information was confirmed by First Deputy Prime Minister and Minister of Energy of Ukraine Denys Shmyhal following a meeting of the Ukraine Energy Coordination Group in Kyiv, according to "Komersant Ukrainian".
“There will be no money from the €17 billion loan this year for the restoration of the energy sector,” the source said.
Shmyhal, in turn, explained that the EU loan will not cover the necessary expenses.
“We are currently awaiting the first tranche of the €90 billion EU loan (this year it amounts to €45 billion, of which €17 billion is expected to go to the budget). The energy sector directly requires €5.4 billion—and this amount is not covered,” the minister noted.
Responding to a question from an RBC-Ukraine correspondent, Shmyhal noted that cooperation with the Ministry of Finance will need to continue in order to secure the necessary funds.
“At the same time, we are counting heavily on the Ukraine Energy Support Fund. Applications totaling approximately €900 million have already been submitted to this fund. And today we managed to attract €100 million to this fund from partners. In my opinion, this fund is the most convenient and transparent instrument for investing in Ukraine’s resilience,” the minister added.
Loan for Ukraine
As a reminder, on April 23, the European Union unlocked a €90 billion loan package for Ukraine. The loan will be repaid using reparations that Russia is required to pay to Ukraine.
As reported, the funds will be directed toward:
- domestic weapons production;
- purchasing weapons from partners—those that Ukraine does not yet manufacture on its own;
- preparing the energy sector and critical infrastructure for the coming winter;
- fulfilling social obligations to citizens.
Ukrainian President Volodymyr Zelenskyy stated that Ukraine expects to receive the first tranche of €90 billion from the EU by late May or early June. According to him, the funds will go toward the military, weapons production, and support for citizens.
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