Oschadbank estimated cost of gigawatt of generation announced by Zelenskyy at $700 million

Ukraine will not be able to restore the generation destroyed by the Russians without the financial help of its partners. To build just one gigawatt, at least $700 million is needed, said the deputy chairman of the board of Oschadbank Yuriy Katsion.

"Investment projects for the construction of one gigawatt of electricity will cost from $700 million in the case of using gas piston or gas turbine technologies and up to $1.5 billion for, for example, wind power. This is one gigawatt. We need to build eight or nine," Katsion said during EP-chat expert discussion on the state and potential of restoration of Ukraine's energy capacity.

The entire banking system of Ukraine will not be able to simultaneously finance all these projects in a short period of time, he said.

"Without European partners, it will be very difficult and impossible, for sure," Katsion said.

That is why, according to the banker, it is important to attract the help of international partners, in particular the European Bank for Reconstruction and Development, the European Investment Bank.

"All the partners with whom we communicate confirm their willingness to participate in such projects," Katsion stated.

Currently, only Oschadbank is considering alternative generation projects for more than 500 MW – i.e. half of the amount announced by President Volodymyr Zelenskyy.

According to Katsion, the deficit in the energy system will be observed for at least one or two years. Therefore, options should be sought that will enable businesses to move from temporary means of survival to sustainable solutions that will ultimately ensure permanent access to electricity.

"The focus of the big banks will be primarily on rebuilding the destroyed capacities of 9 GW of electricity. We must finance the creation of new environmental solutions, which, among other things, coincide with the vision of our European partners and colleagues," said the deputy chairman of the board of Oschadbank.

As a result of the strikes of Russian missiles and drones, more than 9 GW of Ukrainian generation capacities were destroyed. At the same time, the peak of energy consumption in Ukraine last winter was 18 GW.

On June 5, 2024, the Cabinet of Ministers signed a memorandum with the EBRD on attracting 300 million euros to support the energy sector of Ukraine. This money will be distributed among state energy companies.

The Cabinet of Ministers is engaged in the creation of tools for the development of decentralized electricity generation. Prime Minister Denys Shmyhal expects that they will be fully operational no later than July 25.