18:43 PM Monday, June 25, 2018
Banker: EU Committed to Funding Ukraine Projects
EU's development bank shifts focus to helping small and midsize businesses and promises to maintain the euro flow
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KYIV – For Ukrainians worrying about donor fatigue, Vazil Hudak has a strong message of European support.

“Ukraine is our most important priority in the region,” Hudak, vice president of the European Investment Bank, or EIB, said in an interview. “The commitment is there.”

The EIB describes itself as the EU’s bank. It is the world’s largest multilateral borrower and lender. From a capital base of EUR 243 billion, the bank made EUR 77.5 billion loans in 2015.

Since the February 2014 Revolution of Dignity, the EIB has made EUR 3 billion in loans to projects in Ukraine. Hudak, a former Economy Minister of Slovakia, said this is only beginning of the EIB’s commitment to Ukraine.

Hudak was in Kyiv on Friday to provide guidance on EU4Business, a program designed to help small and medium-sized businesses do business with the European Union.

Big Transportation and Power Projects

Hudak listed some projects financed by the EIB in Ukraine since 2014:

-- EUR 55 million to double the Beskyd rail tunnel under the Carpathian Mountains. This will speed rail traffic from Ukraine to Slovakia and Hungary.

-- EUR 175 million to upgrade the Ukraine’s high voltage transmission network between Zaporizhzhia and Kakhovska on the Dnieper

-- nearly EUR 1 billion to modernize roads, rail, and metro systems across Ukraine

“We’re seeing catastrophic change, but in a positive way”, said Hudak, a reference to the scale of tasks undertaken. “It’s still slow, but it’s moving in the right way.”

EIB loans, he said, are helping to stabilize the economy as Ukraine simultaneously recovers from a deep recession and institutes reforms.

Hudak said European governments continue to support the bank, which is based in Luxembourg and has a total workforce of nearly 3,000 employees.

‘Recipient Fatigue’

Instead of donor fatigue, he said the problem has been the ability of Ukraine’s Government to put the money to quick and effective use.

“Quite the contrary: the bigger issue is with administrative capacity,” he said. “If anything, we’re seeing ‘recipient fatigue’.”

Future Focus: Doing Business With EU

While the majority of programs financed in the initial 3-year, EUR 3 billion allotment were geared toward the government , he said the focus is changing. The EU4Business initiative combines several EU-funded programs that support the development of small and medium businesses in Georgia, Moldova, and Ukraine,

“Speaking about upcoming trends, we see a move to the sub-national level, a move towards the private sector,” he said.

The program provides EUR 200 million in grants that should lead to EUR 2 billion in investments from the EIB and the European Bank for Reconstruction and Development.

It is expected that half this amount will go to Ukraine.

Hudak forecast more financial support for business in Ukraine.

More for Ukraine

“We want to continue to be very active in Ukraine”, Hudak said. “We’ve set up Task Force Ukraine to find specific solutions to increase public involvement. NGOs will be responsible for some projects.”

He said the program wants to finance projects in transport, infrastructure, and energy efficiency areas.

Other projects financed by the EIB under the three year, EUR 3 billion financing, include:

  • EUR 152 million to expand the Dnipro metro;
  • EUR 150 million to upgrade gas transmission infrastructure along the Urengoy-Pomary-Uzhgorod pipeline;
  • EUR 120 million to support higher education and energy efficiency;
  • EUR 150 million to modernize Ukraine’s rail system;
  • EUR 575 million to upgrade roads around Kyiv and the highway from Kyiv to Chop, a Zakarpattia city bordering Hungary and Slovakia.

For comments or news tips, please contact UBJ Reporter Lee Reaney at

Photo: From Luxembourg with love: Vazil Hudak came to Kyiv last Friday to promised continued European Investment Bank support for Ukraine (Credit: UNIAN/Anastasia Sirotkina)

Photo: Work on doubling the Beskyd rail tunnel under the Carpathians. New tunnel will speed freight and passenger traffic to Slovakia and Hungary. (Credit: UNIAN/Yevhenii Kravs)

Posted Feb. 13, 2017
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