The European Bank for Reconstruction and Development (EBRD) is set to loan €60M (US$64.44M) to Ukrainian company Lan-Oil to finance the construction of a new biofuels project in the country.
Backed by a financial guarantee from the European Union (EU), the project – the EBRD’s first investment in a biofuels project in the country since Russia’s invasion in 2022 – was part of efforts to counteract Russian strikes on Ukrainian power infrastructure, the EBRD said on 12 June.
Signed at the Ukraine Recovery Conference (URC) in Berlin on the day of the report, the project would contribute to Ukraine’s energy security and the decarbonisation of the sector by building a domestic source of fuel supply – bioethanol – with 70% lower greenhouse gas emissions than traditional fuel, the report said.
The sponsor is JSC Concern Galnaftogaz and OKKO Group, a leading Ukrainian distributor of transportation fuels. As of December 2023, JSC Concern Galnaftogaz owned and operated 396 OKKO-branded filling stations.
The biofuel produced was expected to be compliant with the EU Renewable Energy Directive (RED III, the EBRD said.
Energy security is one of the EBRD’s five investment priorities for Ukraine, along with support for vital infrastructure, food security, trade and the private sector.
Since the start of the war, the EBRD said it had made over €4.2bn (US$4.5bn) available to Ukraine and its shareholders had recently agreed to provide a €4bn (US$4.29bn) paid-in capital increase to enable the bank to continue investing at current levels in wartime, with the potential for more investments when reconstruction started.
