In March 2022, the European Bank for Reconstruction and Development (EBRD) launched a Resilience Package to support resilience and livelihoods in Ukraine and affected countries. Under this Resilience Package, the EBRD structured a blended finance solution to support the construction of the Nadezhda Terminal in Western Ukraine – a multi-purpose logistics hub for the reception, storage, and transhipment of petroleum products, plant-based oils and bioethanol.
The Nadezhda Terminal: The EBRD’s use of blended concessional finance in Ukraine
Abstract
The war in Ukraine has severely disrupted trade routes and supply chains. With the breakdown of traditional fuel supply corridors from Russia and Belarus, over 70% of Ukraine’s fuel imports had to be replaced with ground transport supplies from the European Union (EU). At the same time, logistical bottlenecks hindered the country’s agricultural exports.
Meanwhile, Ukraine’s energy infrastructure became a frequent military target, with about a third of the country’s power stations and half of its thermal generation capacity hit by attacks since 2022 – resulting in blackouts and heightened dependency on imported fuels. In this context, investing in logistics infrastructure that could simultaneously support fuel imports, energy security and agricultural exports became urgent and strategic.
In its ordinary operations, the European Bank for Reconstruction and Development (EBRD) uses blended concessional finance (BCF) to address bankability constraints, mobilise private capital, and enhance a project’s impact. By targeting persistent market failures - such as affordability gaps, information asymmetries, or weak competition - BCF enables high-impact investments to proceed where they would otherwise be unviable.
However, in crisis-affected contexts – such as Ukraine following Russia’s full-scale invasion in 2022 – blended finance becomes a form of crisis financing – used to protect livelihoods, preserve critical infrastructure, and support economic continuity where commercial structures are no longer viable. In such situations, the purpose is to deploy financing structures that absorb elevated risks and sustain essential services during extreme disruption.
In March 2022, the EBRD launched a Resilience Package to support resilience and livelihoods in Ukraine and affected countries. Backed by over EUR 2.6 billion in donor contributions, including concessional instruments such as investment grants, guarantees and first-loss risk cover, this facility has enabled the Bank to continue investing in infrastructure and businesses that are vital to stability and recovery.
Under this Resilience Package, the EBRD structured a blended finance solution to support the construction of the Nadezhda Terminal in Western Ukraine - a multi-purpose logistics hub for the reception, storage and transhipment of petroleum products, plant-based oils and bioethanol. The project was implemented in partnership with Raiffeisen Bank Ukraine (RBU) and the financing structure included:
A loan of UAH 367 million (approx. €9.38 million) by RBU available in local currency and USD.
An unfunded risk-sharing guarantee by EBRD covering 50% of the loan, with half of that risk further covered by a First Loss Risk Cover (FLRC) from the Crisis Response Special Fund (CRSF), financed by the Netherlands.
Despite heightened uncertainty, concessional finance enabled the transaction to proceed.
With total annual cargo flows through the terminal expected to reach 688,000 tonnes by 2028 (including 189,000 tonnes of non-fossil fuel products), the project strengthens Ukraine’s logistical resilience and export capacity, supports critical energy and food security needs amidst ongoing conflict and advances decarbonisation through more sustainable transport modes.
In particular the project enabled:
Infrastructure Resilience and Market Integration: The terminal connects EU and Ukrainian rail systems by enabling cargo transfers between different track gauges, enhancing cross-border efficiency and regional integration.
Energy Security and Operational Continuity: With energy infrastructure under constant threat, the terminal helps ensure consistent and diversified fuel supply essential for power and heat generation - safeguarding basic needs and economic activity during wartime.
Food Security and Export Capacity: By ensuring reliable fuel access for agricultural machinery and facilitating alternative export logistics, the terminal supports Ukraine’s agricultural sector - particularly given that small and medium-sized farmers represent most of Nadezhda’s clients.
Decarbonisation efforts: The project promotes a shift from truck to rail transport, reducing CO₂ emissions. Its capacity to handle bioethanol also supports the country’s green transition.
Through strategic deployment of blended concessional finance, the EBRD enabled this investment to proceed under crisis conditions - supporting not only short-term resilience but also long-term transition priorities in energy, food security and decarbonisation.
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