EBRD channels €15.5 million to support major biomass project in Ukraine

By Anton Usov

The European Bank for Reconstruction and Development (EBRD) is supporting new projects for alternative power generation in Ukraine aimed at diversifying the country’s power supply and improving its energy security. The latest of these projects will involve the development, construction and operation of an 18MW wood chip-fired power plant in the town of Ivankiv in Kiev oblast. The biomass facility should become fully operational by the middle of 2014.

The new plant, which will process annually around 210,000 tonnes of firewood, reject wood and residual biomass from forest management, will generate over 121,000 MWh of electricity. It will be sold to the national grid at the agreed “green” tariff.

The EBRD’s new client Biogasenergo, a subsidiary of Ukraine’s EIG Engineering, will supply power to households in Ivankiv and also create over two hundred new jobs in the rural area, which has a high rate of unemployment.

Implementation of this biomass project – the first stage of which was voted “the best green investment of 2012” by the national “Green Awards Ukraine 2012” competition – will mark the beginning of a large-scale investment programme by EIG Engineering. Following a successful programme inception, supported by the EBRD, the company plans to develop up to five similar biomass-fired power plants with an aggregate capacity of 50MW, all of them in regions of northern Ukraine that are rich in wood waste.

The biomass project is financed by the EBRD’s Ukraine Sustainable Energy Lending Facility (USELF), an investment programme of €70 million – €50 million from the EBRD and €20 million from the Clean Technology Fund (CTF) – designed to provide finance to private local enterprises that wish to invest in renewable energy projects in Ukraine. Technical assistance for project preparation and for regulatory and environmental assessment is funded by the Global Environmental Facility (GEF).

In 2008 the CTF was established to support middle-income countries with their adoption of renewable and energy efficiency technologies that have high potential to minimise long-term greenhouse gas emissions. The fund already finances programmes in 15 countries and one region, and is the largest multilateral climate-finance instrument in operation.

The EBRD is the largest financial investor in Ukraine. As of 1 August 2013 the Bank had committed over €8.55 billion (US$ 11.4 billion) across 327 projects in Ukraine.