Recent Russian pounding of Ukraine’s energy grid will pose a “new challenge” for the country this winter, the President of the European Bank for Reconstruction and Development (EBRD), Odile Renaud-Basso, has told Euronews.
Ukraine is facing its fourth winter since Russia launched its full-scale invasion in February 2022. In the months running up to the start of the country’s heating season, the EBRD was working with Ukraine’s state-run oil and gas company Naftogaz to ensure that Ukraine has sufficient gas storage to cover the winter.
However, these efforts have been thwarted in recent weeks, as Russia is scaling up its missile and drone attacks on Ukraine’s already weakened energy infrastructure. This pummelling of the grid plunged several regions, including Kyiv, into darkness.
Ukrainian President Volodymyr Zelenskyy has described the strikes as “cynical and calculated.” The country’s energy minister has said it’s aiming to increase natural gas imports by 30% to compensate for the damage inflicted by the attacks.
“There is a new challenge,” Renaud-Basso, told Euronews’ new programme “12 minutes with…”.
“The country was very well prepared a few days ago. The new attack creates a new challenge, so it’s important to continue to strengthen and be ready.”
‘Effective response’
The EBRD, which provides project financing for banks, industries, and businesses in the private sector, has invested in Ukraine since it was created in 1991. However, when the war started, it stepped up investments, and has deployed more than €8.3 billion in Ukraine since February 2022.
Aside from focusing on ensuring energy security and stability, this money also goes to the banking and agrifood sectors.
Renaud-Basso noted that, while the grid can never be completely protected, Ukraine has been “extremely effective” in its response to attacks, from repairing key network infrastructure and building shelters to the decentralising the system.
“This is a way to avoid concentrating the risk.”
But still, she stressed, Russia is continuing to target the energy infrastructure. “A few days ago, Ukraine experienced the largest attack on its gas infrastructure, and this created a new challenge.”
Bloomberg reported on 9 October that attacks targeting Ukraine’s Poltava and Kharkiv oblasts damaged nearly 60% of the country’s gas production, however this has not been officially confirmed by Ukrainian officials.
Naftogaz CEO Sergii Koretskyi wrote on social media, “This is the largest mass attack on our gas mining infrastructure since the beginning of the full-scale war.”
During peak heating season, from late December to early March, the mean temperature in Ukraine often falls below 0°C.
The Kyiv Independent reported that Ukraine needs at least 13.2 billion cubic metres (bcm) of gas to heat homes, schools, hospitals, and businesses in the winter months. Now, with the gas infrastructure damaged, the EBDR will provide Naftogaz with fresh financing for emergency gas imports.
“As an institution, as a bank, and with the countries that support Ukraine, we need to be very agile in defining the response and providing support depending on the priorities,” Renaud-Basso said.
She added that the bank is committed to Ukraine’s post-war reconstruction and plans to deploy at least €3 billion per year to finance its economic recovery. But she explained that a lasting peace is needed before this recovery can start: “For real reconstruction, having a clear visibility and certainty that the war will not start again is important.”
The EBRD has made no new investments in Russia since 2014, when Moscow annexed Crimea. In April 2022, the bank also suspended Belarus’ access to its resources, given its support for Moscow’s invasion of Ukraine.
Pressed on whether this could change in the event of a ceasefire and lasting peace deal, Renaud-Basso said: “We have suspended any investment and financial relationship with Russia and Belarus, and I don’t see the current circumstances allowing us to start again.”
