A €44 million EU grant will support decentralised power generation for Ukrainian Railways, as Ukraine seeks to protect critical transport and energy infrastructure from continued Russian attacks.
The European Union and the European Bank for Reconstruction and Development are increasing support for Ukraine’s national railway operator, with a new €44 million EU investment grant intended to strengthen energy resilience across the country’s rail network.
The grant, provided under the EU’s Ukraine Investment Framework, will support an existing €180 million EBRD loan to Ukrainian Railways, also known as Ukrzaliznytsia. The financing package is aimed at installing up to 200 MW of decentralised, small-scale gas-fired generation capacity at selected railway sites across Ukraine.
The project is designed to help maintain electricity supply for rail operations, households and businesses at a time when Ukraine’s energy infrastructure remains under regular Russian attack. According to the EU Delegation to Ukraine, the overall project cost is €248 million and includes backing from the EU, the EBRD and the United Kingdom.
The United Kingdom has previously provided a parallel grant of £20 million, equivalent to around €24 million, through the Ukraine Energy Support Fund, which is administered by the Energy Community Secretariat.
The fresh EU grant gives the project an added financial layer and broadens the impact of the EBRD loan signed in December 2024. It also reflects a wider shift in Ukraine’s wartime energy planning, away from exclusive dependence on large centralised power plants and towards smaller generation units that are harder to disable in a single strike.
Ukraine has lost more than 10 GW of generation capacity since Russia’s full-scale invasion began in 2022. Large-scale generating plants, transmission facilities and substations have been repeatedly targeted, causing blackouts and placing pressure on the country’s electricity system.
For that reason, the Ukrainian government has prioritised decentralised generation as part of its approach to energy security. The small modular gas engines to be installed under the railway project are intended to provide operational flexibility and reduce vulnerability during attacks on the grid.
Ukrzaliznytsia has played a central role in Ukraine’s wartime logistics. It has transported civilians, military-related cargo, humanitarian supplies and commercial goods, while also supporting evacuation and internal mobility. Its ability to continue operating during electricity shortages has therefore become a national resilience issue rather than a narrow transport concern.
Oleksandr Pertsovskyi, Chairman of the Board of Ukrainian Railways, said the company was preparing for winter and had to be ready for any scenario. He said the rail operator was continuing to develop its own gas-based generation to maintain passenger and freight transport during possible blackouts and to support the national energy system.
The EU component also includes support beyond power generation. Of the €44 million grant, €3 million will be used to help establish a new in-house UZ Academy training and veterans’ reintegration facility. The academy is expected to train between 1,000 and 1,200 Ukrzaliznytsia employees each year, with a focus on skills and qualifications relevant to the labour market.
That element of the package reflects the pressure placed on Ukraine’s workforce by the war. The railway operator is one of the country’s largest strategic enterprises and remains a major employer, while the wider economy faces labour shortages caused by mobilisation, displacement and migration.
A separate EBRD-supported project will provide a €10 million accessibility grant for urgent upgrades at major railway stations in Kyiv and Lviv. The funding will cover step-free access and energy-efficient lighting, with the stated aim of improving safety and accessibility for passengers with disabilities, older people, passengers with young children and others with reduced mobility.
The EU and EBRD framed the support as part of a broader effort to keep Ukraine’s critical infrastructure functioning under wartime conditions. The EBRD said the investment would strengthen immediate operational capacity as well as Ukraine’s longer-term recovery.
The use of gas-fired units also comes with a longer-term energy transition argument. The EBRD said such engines could later be repurposed to balance intermittent renewable power from solar and wind once conditions allow a fuller move towards renewable-led generation.
The project therefore sits at the junction of railway resilience, wartime infrastructure protection and decentralised energy planning. For Ukraine, keeping trains running remains central to both the civilian economy and the country’s wider ability to withstand continued Russian attacks.
For the EU, the grant is another example of reconstruction-related support being directed not only towards future rebuilding, but towards immediate systems that help Ukraine function during the war. The financing is also consistent with Brussels’ wider support for Ukraine’s connectivity, energy resilience and economic stability.
The announcement does not create a new loan facility on its own. Its importance lies in the EU grant’s role in scaling up an existing EBRD-led package and in strengthening one of Ukraine’s most important public enterprises ahead of further strain on the energy system.
