EBRD provides VARUS with $25 mln loan for sustainable energy-efficient green expansion

The European Bank for Reconstruction and Development (EBRD) is providing the VARUS Group retail chain with a $25 million loan to expand its retail operations and increase business resilience, the EBRD press service reports.

This food security project, with a total cost of $53.1 million, receives partial first-loss risk coverage of 22%, provided by the EU under the Ukraine Investment Framework (UIF) through the Municipal, Infrastructure and Industrial Resilience guarantee (MIIR) facility. So far, the EU has allocated EUR207 million in Ukraine Investment Framework guarantees and grants to Ukraine through the EBRD, 87% of which was provided to the private sector.

The guarantee for Varus plays a crucial role in mitigating the increased macroeconomic and geopolitical risks associated with the investment. The support is provided in recognition of the project’s alignment with the bank’s Green Economy Transition (GET) approach through energy-efficient retrofitting, renewable energy deployment and improved sustainable logistics. It includes the installation of solar panels, high-efficiency lighting and low-global warming potential reversible split air conditioning systems.

VARUS Group is the fifth largest food retail chain in Ukraine. The chain consists of 114 stores, most of which are located in the eastern part of the country, employing around 7,500 people. Despite the closure of some outlets due to the war, the group has opened new stores and has been able to return to its pre-war size. The EBRD loan will enable the further expansion of the VARUS network, the renovation and modernization of equipment in existing stores, the lease of a new warehouse, and the installation of photovoltaic systems to reduce dependence on the electricity grid.

The cooperation with the EBRD will help preserve Ukraine’s human capital and workers’ livelihoods despite the ongoing challenges of wartime, through technical cooperation. The project will also benefit from a co-investment grant to optimize warehouse logistics, improve energy efficiency, and address urgent human capital needs.