Ukraine is bracing for another harsh winter as Russian attacks on its energy infrastructure intensify, leaving policymakers and engineers scrambling to keep the lights on and the economy afloat. On October 23, 2025, the National Bank of Ukraine announced it would keep its key policy rate steady at 15.5%, signaling a cautious approach as the country faces mounting challenges from wartime disruptions and a looming energy crisis. The central bank also revised its economic outlook downward, citing the direct impact of Russian strikes and persistent labor shortages.
Governor Andriy Pyshnyi, speaking at an online media briefing covered by Reuters, painted a sobering picture: “The economy continues to grow, but the growth pace will remain moderate due to the effects of the war.” The central bank now expects gross domestic product to expand by just 1.9% in 2025, down from an earlier forecast of 2.1%. For 2026, growth projections have been trimmed to 2.0% from 2.3%. The message is clear—Ukraine’s economic engine is running, but it’s sputtering under the weight of persistent conflict and infrastructure woes.
The crux of the problem is energy. As winter approaches, Russia has ramped up missile and drone attacks on Ukrainian power plants and energy facilities, a tactic that has left hundreds of thousands of people without electricity in Kyiv and beyond. According to Reuters, these attacks have become an annual ordeal since the full-scale invasion began in February 2022, but this year’s strikes are particularly intense and damaging. Pyshnyi admitted, “The energy deficit caused by the recent destruction of infrastructure and gas production facilities, combined with labour shortages, will significantly limit business activity.”
To keep essential services running during blackouts, the central bank has rolled out a so-called “Power banking” initiative. This network of bank branches, equipped with backup generators and internet access, is designed to ensure uninterrupted access to financial services—even if the grid goes dark for extended periods. “The central bank has focused on the issue, realising that the autumn will be difficult,” Pyshnyi said. “The attacks, their intensity and the depth of the energy system damage have increased. This is the challenge we have prepared for.”
Despite these extraordinary measures, the economic outlook remains clouded by uncertainty. While consumer price inflation has slowed—dropping to 11.9% year-on-year in September from 13.2% in August—the central bank remains wary. Inflation expectations are still high, and risks tied to energy shortages and increased government spending loom large. Policymakers now expect inflation to moderate to 9.2% by the end of 2025, 6.6% in 2026, and finally reach the 5% target by 2027. The key policy rate, unchanged since March 2025, may start to ease only in the first quarter of 2026, Pyshnyi hinted.
Amid these headwinds, Ukraine’s energy sector is fighting back. On October 24, Deputy Energy Minister Svitlana Hrynchuk announced a major push to install an additional 400 megawatts (MW) of distributed gas generation by the end of 2025, as reported by Ukrinform. Distributed generation—where many smaller, local power sources supply energy directly to communities—offers a lifeline for a nation whose centralized power grid has become a prime target for Russian missiles. “All state-owned energy companies are implementing distributed generation projects, primarily gas-based,” Hrynchuk said. “As of today, a significant capacity of such units has already been installed by state companies. By the end of the year, an additional 400 MW will be installed by these state enterprises.”
The logic is simple: by generating power closer to where it’s needed, Ukraine reduces its reliance on long, vulnerable transmission lines. This strategy is more than just a technical fix—it’s a matter of national security. With Russia aiming to “weaken the country’s resilience and strain civilian infrastructure,” as reported by Kyiv Post, every kilowatt generated locally is a small victory in a much larger struggle.
The government’s efforts don’t stop there. Over one gigawatt (GW) of distributed generation projects has already been financed for construction in 2026, expanding the country’s energy portfolio and making it harder for Russian forces to cripple the grid with a single blow. Private sector players are also stepping up. The Power One project, financed by the European Bank for Reconstruction and Development (EBRD) and involving companies like Dragon Capital and N, aims to bolster energy security with small-scale generation solutions. Ukrainian agrifood giant MHP has commissioned 18 MW of cogeneration units and 15 MW of solar power plants to meet its own needs, and is considering a 60 MW wind farm by March 2025, according to Interfax-Ukraine.
Technological innovation is playing a crucial role. In September, DTEK, Ukraine’s largest private energy company, launched the country’s biggest battery storage project—a 200 MW system made up of six battery units ranging from 20 to 50 MW each. These batteries, now connected to the grid in the Kyiv and Dnipropetrovsk regions, help stabilize power supply and provide a buffer against sudden outages. It’s a bold move, and one that could prove vital as the country heads into what many expect will be another winter of uncertainty and hardship.
Still, the scale of the challenge is daunting. Russia’s strategy is clear: by targeting critical energy assets, Moscow hopes to undermine Ukraine’s ability to sustain its population and war effort through the colder months. Every blackout is more than an inconvenience—it’s a blow to morale, productivity, and, potentially, national unity. Yet Ukraine’s response has been marked by resilience and adaptation, from the central bank’s contingency planning to the energy sector’s rapid diversification.
It’s not just about surviving the winter, though. The push for distributed generation, renewable projects, and battery storage is also laying the groundwork for a more resilient and modern energy system. If Ukraine can weather this storm, it may emerge with an energy sector that’s stronger, more flexible, and less vulnerable to external threats. For now, the country remains on high alert, its people and institutions bracing for whatever the coming months may bring.
As the first frosts of winter settle over Ukraine, the battle for energy security has never felt more urgent—or more personal. The coming months will test the country’s resolve, its ingenuity, and its ability to adapt under fire. But if recent efforts are any indication, Ukraine is determined not just to endure, but to build a future where blackouts and missile strikes no longer dictate the rhythm of daily life.
