Ukraine won't use EU loan for energy rebuilding - Ukraine's Energy Minister
Photo: Ukraine’s Energy Minister Denys Shmyhal (Vitalii Nosach, RBC-Ukraine)
Credit funds from the EU will not be directed to restoring the energy sector damaged by Russian attacks, sources familiar with the allocation of funds told RBC-Ukraine, a statement later confirmed by First Deputy Prime Minister and Energy Minister Denys Shmyhal after a meeting of the Ukraine Energy Coordination Group in Kyiv.
"€17 billion from the EU credit will not be allocated for energy restoration this year," the source said.
Shmyhal, in turn, explained that the EU loan does not fully cover the required needs.
"Currently, we are expecting the first tranche from the €90 billion EU credit (this year it is €45 billion, of which €17 billion should go into the budget). Direct energy needs amount to €5.4 billion — and these funds are not covered," the minister said.
Responding to a question from RBC-Ukraine's correspondent, Shmyhal noted that coordination with the Ministry of Finance will continue to secure the necessary funding.
"At the same time, we are placing strong hope in the Ukraine Energy Support Fund. We already have applications in this fund worth about €900 million. Today we also managed to attract €100 million from partners. In my view, this is the most convenient and transparent instrument for investing in Ukraine's resilience," he added.
EU loan for Ukraine
As a reminder, on April 23 the European Union unblocked a €90 billion loan package for Ukraine. The loan will be repaid using reparations that Russia is expected to pay to Ukraine.
According to reports, the funds will be directed to:
- domestic weapons production
- purchasing weapons from partners
- preparing the energy system and critical infrastructure for winter
- social payments to citizens
President Volodymyr Zelenskyy said Ukraine expects to receive the first tranche by late May or early June, with funds going to the army, weapons production, and civilian support.
It should be noted that Energy Minister Denys Shmyhal had previously said that "€5.4 billion from the EU credit would be allocated to restoring Ukraine's energy sector."
