The first phase of the EBRD’s Ukraine Sustainable Energy Lending Facility (USELF) will deliver 200 GWh of renewable energy through an innovative combination of EBRD commercial financing, dedicated technical assistance support and concessional grant co-financing.
After a slow start due to the under-developed renewable energy sector in Ukraine, the Facility has now signed seven renewable energy projects. These use biogas, biomass, small hydro, wind, and solar energy to generate heat and power. With a strong project pipeline now established, a Phase II for USELF is in the works for launch early this year.
“Financing renewable energy continues to be a strategic priority in Ukraine,” said Sevki Acuner, the EBRD’s Director for Ukraine. “The combination of policy dialogue, technical assistance, and concessional and commercial financing is proving to be a very effective mix of delivery for the Bank in this important sector”.
The Facility, totalling €100 million, consisted of €50 million in EBRD commercial financing, €20 million in climate finance from the Clean Technology Fund and €30 million of sponsor equity.
This was further supported by technical assistance of $8.45 million (€6.62 million equivalent) from the Global Environment Facility. These support activities were essential to the success of USELF and would not have been possible without generous contributions from the CTF and GEF.
Through these activities USELF has strengthened the business environment for private sector renewable energy, and fostered the development of related projects.
By combining effective policy dialogue and financing support for the nascent renewable energy sector in Ukraine, the EBRD is supporting the Ukrainian government to reduce the country’s dependence on imported fossil fuels.
Porogi Solar Project, pictured above, a 4.495 PV solar facility, was the first USELF project to be commissioned and the first PV solar facility directly financed by the EBRD. The project sponsor, Rengy Development LLC established the special purpose company, Green Agro Service LLC (GAS), in the Vinnitsa Oblast, to generate 5.0 GWh per year of renewable solar power to the local grid and reduce greenhouse gas emissions by around 5,000 tC02 per annum.
Total investment of €9 million included an 8-year EBRD loan of €4.1 million and a 15 year loan of €1.6million from the CTF.
In addition to increasing power generation from renewable energy, Porogi Solar is improving the quality and reliability of power supply in the region and has laid the groundwork for limited recourse financing for future projects in the Ukraine.