The European Investment Bank (EIB) is lending EUR 15.5 million to upgrade water supply and wastewater treatment in the City of Mykolayiv (southern Ukraine) and EUR 100 million to finance small and medium-sized investments in the areas of SMEs, energy efficiency and the environment in Ukraine.

The loan of EUR 15.5 million will finance the rehabilitation and modernisation of water supply and wastewater collection and treatment facilities in the City of Mykolayiv, which has over half a million inhabitants. The EIB funds will help the City to meet national and international standards and provide the local population with a higher quality of drinking water and wastewater services. The City of Mykolayiv is the project promoter and Mykolayiv Vodokanal is the final beneficiary of this loan.

Due to the close distance, 65 km, of the City of Mykolayiv to the Black Sea this project will help to fulfil Ukraine’s commitments under the Convention on the Protection of the Black Sea against Pollution and also represents an important step towards realising the environmental dimension of the European Union’s Black Sea Synergy.

The loan of EUR 100 million is being provided to FORUM Commercial Bank and will indirectly support smaller investments with total costs of up to EUR 25 million promoted by SMEs as well as energy efficiency and environmental protection projects undertaken by mid-cap companies and public entities in Ukraine.

Through its loans, the EIB finances projects usually implemented by SMEs (with fewer than 500 employees) but also by mid-cap companies or municipalities for energy efficiency and environmental protection. To increase the access of SMEs to long-term financing, the EIB closely cooperates with local financial institutions – such as the FORUM Bank – which have local market expertise, particularly in providing services to small and medium-sized entrepreneurs and public entities through a well-developed network. This is the first EIB operation of this type in the Eastern Partnership countries, including Ukraine, under the Joint IFI Action Plan being implemented by the EIB, the EBRD and the World Bank Group as a response to the current financial crisis.

Background:

The mission of the EIB, the European Union’s bank, is to contribute to the integration, balanced development and economic and social cohesion of the EU Member States by financing sound investment. Outside the Union, EIB lending is carried out in support of EU economic cooperation and development policies.

The EIB has so far provided four loans in Ukraine, including the above-mentioned contracts, bringing the total lending in the country to EUR 465.5 million. Previous loans supported projects in the roads (EUR 200 million) and energy (EUR 150 million) sectors.