EU commits $39b loan to rebuild Ukraine’s power grid ahead winter

The European Union has pledged a €35 billion ($39 billion) loan to help rebuild the country’s devastated energy infrastructure, ahead of a harsh winter season.

Announced by European Commission President Ursula von der Leyen during her visit to Kyiv, the loan is part of a larger Group of Seven (G7) effort to raise $50 billion through profits from frozen Russian state assets.

Addressing Ukrainian President Volodymyr Zelenskyy, von der Leyen stated, “You will decide how best to use your funds,” signaling Ukraine’s autonomy in allocating the much-needed resources. Zelenskyy’s immediate priorities include repairing the energy network, constructing bomb shelters, enhancing schools, and securing additional weapons.

Since Russia’s invasion in 2022, nearly half of Ukraine’s energy grid has been destroyed, resulting in rolling blackouts across parts of the country. As winter approaches, von der Leyen underscored the critical nature of EU support, tweeting that “Relentless Russian attacks mean Ukraine needs continued EU support,” describing the loan as “another major EU contribution to Ukraine’s recovery.”

Ukraine’s energy demands are expected to soar, with Europe aiming to supply 25% of the 17 gigawatts (GW) needed this winter. Russia has already knocked out about 9 GW of Ukraine’s energy infrastructure—a loss von der Leyen equated to the total energy consumption of Latvia, Lithuania, and Estonia combined.

The broader objective of the EU’s assistance is to stabilize Ukraine’s population, as approximately four million people have fled since the war began. By shoring up its power grid and winter preparedness, Europe hopes to provide the conditions necessary for Ukrainians to remain in their homeland, despite the ongoing conflict.

Von der Leyen’s eighth visit to Kyiv came on the heels of intense fighting between Ukrainian forces and Russian troops in the east. As Ukraine strengthens its military, Italian Foreign Minister Antonio Tajani announced the deployment of a new Samp-T antimissile system to protect key civilian infrastructure like hospitals and schools.

Meanwhile, Moscow has criticized the West’s continued military aid to Ukraine. Russian Foreign Ministry spokesperson Maria Zakharova called for a halt to weapon supplies, accusing the West of sponsoring “terrorist activity.” However, Ukraine shows no signs of backing down, with Zelenskyy preparing to discuss a “victory plan” with U.S. President Joe Biden during upcoming meetings in Washington.

As winter looms and battles rage on, the EU’s financial commitment signals a critical lifeline for Ukraine, aiming not just to rebuild but to ensure the nation can endure the hardships ahead.