Ukrainian Residential EE Financing Facility

Location:

Ukraine

Project number:

46798

Business sector:

Financial institutions

Notice type:

Private

Environmental category:

FI

Target board date:

02 Sep 2015

Status:

Board Approved

PSD disclosed:

07 Aug 2014

Translated version of this PSD: Ukrainian

Project Description

The EBRD is considering setting up the Ukrainian Residential Energy Efficiency Financing Facility (“UREEFF”, “Framework”). UREEFF will be made available to a number of commercial banks (Participating Financial Institutions or “PFIs”) in Ukraine.

The PFIs will issue sub-loans to private residential stakeholders, including individual homeowners, groups of homeowners, housing associations, condominiums and cooperatives. Eligible sub-projects will consist of investments in high performing energy efficiency technologies and measures, which can be expected to achieve a minimum energy saving of 20% when compared to market norms.

EBRD funds would be complemented by mobilised UAH resources of the PFIs for the total amount of up to €75 million equivalent of sub-loans.

Incentive grant of €15 million provided by the Eastern European Energy Efficiency and Environmental Partnership (E5P) and US$25 million provided by the Clean Technology Fund will support the launch and implementation of the Framework through investment incentives for Sub-borrowers, partial hedge of FX risks and credit loss cover for loans to Housing Associations.

Transition Impact

UREEFF is expected to generate transition impact by demonstrating benefits of household energy conservation and promoting the expansion of energy efficiency investments in the otherwise difficult residential sector. It will also support the expansion of the market for sustainable energy equipment and services, resulting in increased competition among the suppliers/installers/vendors.

The Project will help develop and demonstrate effective financing mechanisms for residential energy efficiency projects.

UREEFF will ensure transfer of the necessary skills to PFIs Sub-borrowers and project stakeholders (i.e. local engineers/architects/designers) acquired through sub-project implementation as well as through dedicated trainings.

The Facility will also contribute to strengthening of the regulatory framework related to energy efficiency in housing legislation. It will support the creation of new market players such as bankable housing associations and/or private housing management companies.

The Client

Ukrainian commercial banks with extensive outreach, institutional capacity and commitment to successfully mainstream residential energy efficiency financing.

EBRD Finance

Up to €75 million of EBRD financing in the form of senior loans

Project Cost

 €75 million.

Environmental Impact

Categorised FI (2008): This project offers significant environmental opportunities as it will contribute to the reduction of greenhouse gases. All participating banks are required to comply with the requirements of EBRD’s Performance Requirement 2 (“PR”) on Labour and Working Conditions. All sub-loans under the credit lines will need to comply with the requirements of PR9 for Financial Intermediaries. Sub-borrowers financed under the Facility will be required to comply with national requirements for environment, health and safety and labour (EHSL) standards and eligibility criteria for residential energy efficiency.

Technical Cooperation

The Facility will be supported by a comprehensive technical assistance programme to provide implementation support to PFIs and Sub-borrowers. € 4.5 million funding for the TC programme are secured from SIDA-EBRD Ukraine Energy Efficiency and Environment Consultant Cooperation Fund (SWUK) and E5P (Eastern European Energy Efficiency and Environmental Partnership).

 

Business opportunities

For business opportunities or procurement, contact the client company.

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Email: procurement@ebrd.com

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