The European Bank for Reconstruction and Development (EBRD) and the European Union (EU), with additional support from the United Kingdom, are increasing financial assistance to Ukrainian Railways (Ukrzaliznytsia) to strengthen Ukraine’s energy security, transport resilience, and critical infrastructure amid ongoing war-related damage. A €44 million EU investment grant under the Ukraine Investment Framework is being used to scale up an existing €180 million EBRD loan signed in December 2024.
The combined funding, along with UK support, will finance the installation of up to 200 MW of decentralised, small-scale gas-fired power generation across selected railway sites in Ukraine. This is intended to address severe electricity shortages caused by repeated attacks on Ukraine’s energy infrastructure and to ensure stable energy supply for households, businesses, and essential services. The total project value is €248 million and is designed to improve the resilience of the national energy system.
Ukraine has lost more than 10 GW of power generation capacity since the start of the full-scale invasion, making energy security a critical priority. The project focuses on decentralised energy systems, which are less vulnerable to missile and drone strikes compared to large power plants, thereby improving operational stability and reducing disruption risks.
A portion of the EU grant, around €3 million, will fund the creation of the UZ Academy and a veterans’ reintegration facility. This initiative will provide training and skills development for 1,000 to 1,200 railway employees annually, helping address labour shortages and supporting workforce resilience during wartime conditions.
In a separate initiative, the EBRD is also providing a €10 million accessibility grant to upgrade major railway stations in Kyiv and Lviv. These upgrades will include step-free access, improved safety features, and energy-efficient lighting to enhance accessibility for people with disabilities, elderly passengers, families with children, and other vulnerable groups.
Officials from the EBRD, EU, and Ukrainian Railways emphasized that the railway system has been a critical lifeline during the war, supporting mobility, logistics, and economic activity despite being a frequent target of attacks. The new investments aim to ensure both immediate operational continuity and long-term recovery.
The initiative also supports Ukraine’s transition toward a more sustainable energy future, with decentralised gas generation expected to complement renewable energy sources in the long term. This approach aligns with broader efforts to modernize infrastructure and improve energy flexibility.
Overall, the funding package strengthens Ukraine’s energy independence, transport infrastructure, and institutional capacity, reinforcing the role of Ukrainian Railways as a strategic national asset during wartime and in future reconstruction efforts.
