EU External Investment Plan

Ukrenergo: Integration of the Ukrainian power grid into the Continental Europe Synchronous Area (CESA)

An agreement signed in June 2017 between Ukraine and the European Network of Transmission System Operators for Electricity (ENTSO-E) commits Ukrainian energy utility Ukrenergo to achieving synchronisation with the Continental Europe Synchronous Area (CESA) by 2026. To achieve this goal, substantial regulatory and operational steps will have to be taken and significant work is required to identify, prepare and implement the investments needed to achieve this synchronisation.

Within this context, the main goal of this proejct is to develop good governance with respect to legislation and regulation relating to the Ukrainian electricity sector. This will be achieved by developing new approaches and systems that allow a wider range of stakeholders to engage, in a transparent and non-discriminatory way, in the development of a more efficient transmission system. In this way, the project will help promote competition in the electricity sector and create an environment that is more conducive to investment.

The project aims to support the restructuring of Ukrenergo and its transmission network needed to synchronise it with CESA, including achieving legal and regulatory alignment with EU rules and regulations. It will also support the production of a Ten-Year Network Development Plan in line with EU best practice. This will be preceded by a GAP analysis of the Ukrainian market with respect to EU directives and regulations, which will include recommendations for the necessary alignment. 

It will also rehabilitate and automate nine substations in the South-Western Power Grid of Ukraine. Besides providing the physical infrastructure needed to integrate with CESA, this will contribute to a stable and efficient electricity supply in the Ukrainian power grid. This, in turn, will help improve energy efficiency and create a physical basis for electricity trade between the region and the European CESA network. Work will also be carried out to identify other priority investment projects needed to support the European integration of the Ukrainian electricity network.

Key Information
  • Ukraine
  • Eastern Neighbourhood
Total budget
€53.4 million
EU contribution
€9.0 million
  • Energy
Lead finance institution
Kreditanstalt für Wiederaufbau (KfW Group)