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EBRD and UkrExim Bank to tackle Ukraine’s energy inefficiency
$50 million purpose line of credit to a major state bank
The European Bank for Reconstruction and Development is providing a loan
facility of $50 million to JSC The State Export - Import Bank of Ukraine, the
second largest state bank in the country.
The main purpose of this project, which is the first ever EBRD cooperation
with UkrExim Bank, is to tackle Ukraine’s energy intensity, which is over
three times that of the average for the European Union.
The transaction is implemented under a €100 million framework to work with
financial institutions on energy efficiency and renewable energy projects in
Ukraine, approved by the Bank’s board in October 2006.
Potential clients under the energy efficiency framework will be local private
sector companies, which should be able to receive sub-loans of up to $5
million from participating banks.
As a result of the project implementation, private sector companies will
reduce their energy consumption and costs, something that is particularly
important in the context of rising energy prices in Ukraine. The impact will
help businesses remain competitive and reduce their emissions of greenhouse
gases, as well as helping to work against climate change and mitigating its
effects.
The framework is supported by several important technical assistance
components. A project consultant, funded by the Swedish government, is
responsible for project screening, marketing and an information campaign. At
the same time energy efficiency experts, funded by the Austrian Federal
Ministry of Finance, are assisting potential sub-borrowers to identify
specific energy efficiency measures, prepare rational energy utilisation plans
and assist in preparing loan applications. A Market Demand Study, also funded
by the government of Austria, is currently being finalised, and will evaluate
the overall market potential for energy efficiency.
The European Bank for Reconstruction and Development is the biggest financial
investor in Ukraine. As of the end January 2007 it had committed over €2.87
billion through more than 130 projects.
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