An initiative by the EBRD and government in Ukraine will make the country more energy-efficient.
Ukraine is one of the most energy-intensive countries in the world and is only one-third as energy efficient as the average European country.
It has enormous potential for efficiency improvements in almost every sector of its economy.
Priority areas for investment
In June 2009 the EBRD and the Ukrainian government agreed to develop a Sustainable Energy Action Plan (SEAP), similar to those already signed with Kazakhstan and Bulgaria.
The SEAP calls for investments in priority areas such as industrial energy efficiency, clean power and energy, municipal infrastructure and buildings, as well as carbon finance and targeted credit lines to small businesses.
Other issues to work on include a review of tariff legislation, and introducing legal frameworks for renewable energy development and energy efficiency in residential and public buildings.
Benefits for Ukraine
There are many gains for Ukraine in becoming energy efficient. First, improved energy efficiency helps cut fuel costs, thereby increasing competitiveness for businesses and directly enhancing welfare for Ukrainian consumers.
Second, lower demand for energy helps to reduce Ukraine’s dependence on imported fuels.
Lastly, energy efficiency stimulates new services and jobs. These are especially important in Ukraine as the global financial crisis has affected the country severely.
Developing a sustainable portfolio
Since 2006 the EBRD has developed a sustainable energy project portfolio in Ukraine worth over €650 million. That is equivalent to 28 per cent of the total business done by the Bank in the country over that period.
The portfolio includes energy efficiency projects in industrial manufacturing, power generation and municipal infrastructure. It covers large direct transactions as well as smaller deals funded through local commercial banks.