OREANDA-NEWS. October 21, 2010. The EBRD is extending a 15-year sovereign loan of up to EUR 175 million to the Ukrainian National Power Company Ukrenergo to help improve the efficiency, quality and reliability of electricity generation and transmission in southern Ukraine and the Crimea, reported the press-centre of EBRD.

The loan, matched by a similar-sized loan from the European Investment Bank, will finance the construction of a 190-kilometer 750 kV transmission line between a nuclear power plant in Zaporizhzhia and a new substation in the town of Kakhovka.

The funding will support the construction of a 750 kV substation at Kakhovka and two 330kV line diversions in the Kherson region of Ukraine. It will also facilitate the rehabilitation of two 330 kV transmission lines in the Zaporizhzhia region and of a 330kV substation in Nova Kakhovka.

The project is of primary importance for Ukraine’s electricity system as it will help reduce energy transmission losses and its dependence on imported fuels. It will make excess generation capacity from Zaporizhzhia Nuclear Power Plant available for businesses and households in southern Ukraine and the Crimean peninsula, which is currently not possible because of the restricted capacity of transmission lines.

With funds provided by the Spanish government and the EBRD’s Shareholder Special Fund the Bank carried out full technical, economic and environmental due diligence as well as special due diligence aimed assessing the potential impact of the project on wildlife in the area, with the aim of maintaining the highest possible environmental standards. Other technical assistance for project preparation and implementation was provided by the EU Neighbourhood Investment Facility facility.

The EBRD is facilitating investments in modern and energy efficient generation, transport and distribution as well as in the diversification of energy supply sources.

The implementation of this project will have a positive economic and technical impact not only for Ukrenergo but also for all the other participants of the Ukrainian wholesale market as well as for the country as a whole.  The project is also a step in support of Ukraine’s long term strategy of integrating its transmission network with ENTSO-E, the interconnected network of Western Europe.

The European Bank for Reconstruction and Development is the largest financial investor in Ukraine. As of 1 October 2010, it had committed around EUR5.1 billion through 204 projects.