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EBRD and EU encourage energy saving in Ukrainian small and medium-sized enterprises through loan to country's first Energy Service Company (ESCO)
To help reduce Ukraine’s energy wastage and ease the country’s fuel payment problems, the European Bank for Reconstruction and Development (EBRD) is providing a loan of US$ 30 million (ECU 27.3 million) to the Ukrainian Energy Service Company (UkreEsco), to help small and medium-sized enterprises and public sector institutions in implementing energy saving projects.
"To date, there has been no form of financing nor any alternative mechanisms for energy users to implement energy saving projects in Ukraine," said Charles Frank, the EBRD’s Acting President. "The EBRD’s loan will help establish an effective commercial mechanism for identifying and implementing projects, as well acting as a catalyst for future private sector involvement."
UkrEsco is majority owned by the State Property Fund with privatisation expected within the next two years, and will be managed under contract by an operator run by Econoler Development SA, daughter company of the Belgian ESCO Group TPF-Econoler, and Bechtel, the global engineering and construction company. The costs of the operator will be funded through technical assistance of ECU 3 million from the EU-TACIS programme, which is also providing a further ECU 3 million in grant funding to the energy control systems, and technology improvements to regulate appliances.
Victor Merkushov, Chairman of the State Committee of Ukraine for Energy Conservation, said: "This will be the first ESCO to be established anywhere in the CIS. The result of UkrEsco’s activity should be the decrease of Ukraine’s energy resource requirements and the decrease of imported fuel paid in hard currency, which will have a positive budget impact wherever energy is an essential cost. Ukraine will also benefit from a reduction in the environmental impact of fuel combustion."
UkrEsco will build upon the EBRD’s extensive experience in the energy efficiency sector, including several multi-project facilities to establish and operate ESCOs in the region. Although still in the early stages of development, ESCOs are proving to be a highly efficient vehicle for financing energy efficiency investments in central and eastern Europe.
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