KYIV – Amidst a winter of relentless pressure on Ukraine’s energy infrastructure, the European Bank for Reconstruction and Development (EBRD) signed a landmark €75 million loan agreement with state-owned Ukrhydroenergo on January 7, 2026. The financing, backed by a European Union guarantee, is a critical move to stabilize the nation’s grid and ensure “uninterrupted operation” of its most flexible renewable energy source.
The total recovery package reaches €120 million, combining the EBRD loan with €20 million in international donor grants and Ukrhydroenergo’s own funds. The primary objective is to repair damage from recent targeted strikes and modernize aging components across the Dnieper and Kyiv hydroelectric cascades.
Strategic Importance of Hydropower
Hydropower serves as the “balancing act” of Ukraine’s energy system. While nuclear power provides a steady baseline, hydroelectric plants are essential for meeting peak demand—rapidly ramping up production as millions of citizens return home in the evening.
- Renewable Stability: The project is expected to deliver 223 GWh of green electricity annually, reducing the need for costly electricity imports from Europe.
- Environmental Impact: Modernization is projected to cut carbon emissions by 96,000 tonnes per year.
- Emergency Readiness: A significant portion of the funds will be used to create an emergency reserve stock of critical electrical components, allowing engineers to repair infrastructure within days rather than months following future attacks.
The Wartime Energy Deficit
The investment comes as Ukraine faces its most challenging winter since 2022. Systematic strikes on thermal and hydroelectric facilities have reduced the country’s available generating capacity from 33.7 GW pre-invasion to approximately 14 GW as of January 2026.
| Energy Source | Pre-War Share (2021) | Current Status (Jan 2026) |
| Nuclear | ~55% | Stable (Excl. occupied Zaporizhzhia). |
| Thermal (Coal/Gas) | ~23% | 90% destroyed or occupied. |
| Hydropower | ~10% | 50% of installations damaged. |
| Solar/Wind | ~10% | Decentralized growth ongoing. |
Modernization and Human Capital
Beyond physical hardware, the EBRD-supported project introduces a Strategic Training Programme for Ukrhydroenergo’s engineering staff. As the company transitions from Soviet-era machinery to modern European standards, this initiative aims to bridge the “human capital gap,” ensuring staff are equipped to manage advanced, high-efficiency equipment.
“This project is a confirmation of international confidence in our corporate governance,” stated Valentyn Gvozdiy, Chairman of the Supervisory Board. “It will enhance the reliability of our plants and, accordingly, the stability of Ukraine’s entire power system.”
Financial Resilience
The EBRD remains Ukraine’s largest institutional investor. By the end of 2025, the bank’s total wartime deployment approached €9 billion. This latest loan, funneled through the Ukraine Investment Framework (UIF), is specifically shielded by EU guarantees to mitigate the risks associated with lending in an active conflict zone.
SEO Metadata
- Focus Keyword: EBRD Ukraine hydropower loan 2026
- Secondary Keywords: Ukrhydroenergo €75 million financing, Ukraine energy security winter 2026, EU guarantee Ukraine Investment Framework, repairs to Dnipro HPP, renewable energy Ukraine recovery.
- Excerpt: The EBRD has provided a €75 million loan to Ukraine’s Ukrhydroenergo to repair war-damaged hydroelectric plants and modernize the grid, securing 223 GWh of green electricity for the 2026 winter.
European Bank for Reconstruction and Development Headquarters (EBRD), London, UK Picture by EBRD/Dermot Doorly
