The Danish export credit agency has guaranteed US$420mn financing to expand a wind farm close to the frontline in Ukraine, underlining Denmark’s appetite to back projects in the country despite the war with Russia.

The Export and Investment Fund of Denmark (EIFO) says it has guaranteed the loan provided by Danske Bank to DTEK, a private Ukrainian energy company. The loan has a 12-year tenor with a two-year grace period, DTEK tells GTR.

DTEK will use most of the loan to purchase 64 turbines from Danish company Vestas, which will be installed in the second phase of the Tyligulska wind farm on Ukraine’s Black Sea coast.

The Tyligulska project is in southern Ukraine’s Mykolaiv region and around 100km from the current frontline. Once completed, the wind farm will have a capacity of 498 megawatts, which Vestas says is sufficient to power 900,000 homes and will make it the largest wind power project in Ukraine.

DTEK says the deal is the largest-ever private investment in Ukraine’s energy sector, and the biggest commercial investment in Ukraine since Russia’s February 2022 invasion.

“Our goal is not only to restore what was destroyed by Russia, but also to lay the foundation for economic growth,” DTEK shareholder Rinat Akhmetov says.

“The agreement on the construction of the second stage of the Tyligulska wind farm — the largest green energy facility in the country — during the war is also the creation of a strong and independent Ukrainian energy industry. It is also a sign of trust from our European partners.”

EIFO’s chief commercial officer Peter Boeskov says: “It has been a very large task to create a project financing structure in a country at war like Ukraine. It has only succeeded through good cooperation between DTEK, Vestas, Danske Bank and EIFO, and it is a milestone in terms of financing solutions in Ukraine.”

GTR reported that EIFO was in talks with lenders to support a large Ukrainian wind farm in October last year.

The deal is the latest of several supported by EIFO since the outbreak of the war. The is the only European export credit agency that has an official based in Ukraine advising on potential investments, and is one of the few agencies that provides guarantees covering 100% of a commercial loan in the country.

EIFO says it has supported 15 projects in Ukraine since Russia’s invasion.

Kyiv-based EIFO finance director Kaare Stamer Andreasen told GTR Nordics in late November that EIFO can cover tenors of up to 22 years, in line with the OECD Arrangement on export credits, and offers OECD minimum premiums.

“We are not here to make money, but we are here to make business in Ukraine,” Andreasen said, later adding that EIFO’s war-time support will put Danish companies in a strong position in Ukraine once the conflict is over.