At the 22nd Ukraine-EU Summit, Kyiv signed three agreements with the European Commission and three agreements with the European Investment Bank (EIB) aimed at financing various projects.
In particular, an agreement to finance the EU4ResilientRegions programme for EUR 30 million was signed between the Ukrainian government and the European Commission.
According to the document, the EU4ResilientRegions programme aims at enhancing the resilience of eastern and southern Ukraine to the negative impacts of the ongoing conflict, including to hybrid threats and other destabilizing factors. The action will also address most recent destabilization factors such as the COVID-19 pandemic and its social and economic impact. In response to the conflict in eastern Ukraine and the illegal annexation of Crimea and Sevastopol, this action will aim to enhance Ukraine’s overall resilience, notably to hybrid threats.
The Civil Society Facility programme for EUR 20 million was also signed between the Ukrainian government and the European Commission. The programme focuses on social innovation and active citizenship as core principles for civic engagement and the premises for sustainable democratic societies. It aims to support the capacity of civil society organizations to engage in policy dialogue, to act as governance actors and to drive the country’s social and economic development.
In addition, the Climate package for a sustainable economy (CASE) programme for EUR 10 million was signed between the Ukrainian government and the European Commission.
This programme supports Ukraine in the implementation of measures towards a climate neutral, clean and resource-efficient economy. This includes support in areas such as circular economy and waste management, energy efficiency, emission-free urban transport as well as support to climate mitigation and adaptation.
In addition, this agreement provides for the creation of a joint resource center for climate innovation between Ukraine and the EU and the implementation of “green” measures within the framework of the National Transport Strategy until 2030.
All three documents were signed by Deputy Prime Minister of Ukraine for European and Euro-Atlantic Integration Olha Stefanishyna and Member of the European Commission for European Neighbourhood Policy and Enlargement Negotiations Olivér Várhelyi.
Three agreements with the EIB were signed.
Minister for Communities and Territories Development of Ukraine Oleksiy Chernyshov and Vice-President of the European Investment Bank Teresa Czerwińska signed an Agreement between the Government of Ukraine and the EIB on financing the Energy Efficiency of Public Buildings in Ukraine project. The loan will enable the installation of modern equipment in buildings, such as meters and energy consumption control systems, the modernization of heating, ventilation and lighting systems, and upgrades to exterior surfaces (facades, roofs, slab insulation, basement ceilings, replacement of windows and doors).
Also a EUR 30 million loan provided for by the guarantee agreement Logistic Network (Ukrposhta modernization and digitalization) was signed by Ukrainian Infrastructure Minister Vladyslav Krykliy, CEO of Ukrposhta JSC Ihor Smelyansky and Vice-President of the EIB Lilyana Pavlova.
The loan will allow Ukrposhta to start modernizing its logistics network with three new sorting hubs, 20 postal depots and IT infrastructure. The beneficiary is to return the loans within 20 years.
The draft national budget of Ukraine for 2020, prepared for second reading, provides for UAH 73.7 billion to finance road infrastructure, which is 36% more than in 2019. According to Minister of Infrastructure Vladyslav Krykliy, the budget for 2020 doubles the cost of road safety to UAH 3.17 billion, and increases by five times financing for the development of airfield complexes, to UAH 1.07 billion.
Some UAH 500 million was laid for the construction and reconstruction of bridges, UAH 116 million for ensuring the operationally safe condition of shipping locks.
In addition, the minister noted that within the framework of projects with international financial organizations, it is planned to develop urban passenger transport in Ukrainian cities (UAH 400 million) and modernize the Ukrainian railway (UAH 200 million).
“From the second half of 2020, we expect additional financing for infrastructure development projects due to excess of customs VAT and excise taxes,” the minister added.
Nordic Environment Finance Corporation (NEFCO) since 2010 has implemented 243 municipal and private energy efficiency projects in Ukraine, and the total investment has reached EUR 226 million.
According to NEFCO Managing Director Trond Moe, in particular, 179 projects worth EUR 119 million were implemented in the municipal sector and 58 projects worth EUR 89 million in the private sector. In addition, six more projects were implemented with financial institutions for a total of EUR 18 million.
Moe said at a meeting with reporters on Thursday in Kyiv that the largest NEFCO office after its head office in Helsinki is located in the Ukrainian capital.
Ukraine is now the most important country for NEFCO. But in general, the corporation worked on projects in 80 countries, completing more than 1,300 projects. Last year, NEFCO implemented 124 new projects, most of them in Ukraine, he said.
All these projects, according to Moe, contribute to Ukraine achieving an increase in the share of renewable energy of integrated consumption, while reducing CO2 emissions.
By providing financing and sharing risks, NEFCO makes it possible for Northern European companies to invest in Ukraine and at the same time support Ukraine in the transition to clean and sustainable energy, the NEFCO managing director said.
The company plans to continue close cooperation with Ukraine regarding the implementation of energy efficiency projects and the reduction of CO2 emissions.
The Energy Efficiency Fund plans within five years to finance over 16,000 projects under the Energodom program to support energy-efficient modernization for homeowner associations, Director of the fund Yulia Holovatiuk-Ungureanu has said.
“Our Energodom program began its work on September 3. We are starting the phase of project implementation. We plan that by 2023 almost 9,000 projects will be implemented, and by 2025 more than 16,000 projects,” the director of the fund said during the presentation of the Energodom program on Wednesday.
According to her, by the end of 2025, gas savings due to energy-efficient modernization will amount to 1.5 billion cubic meters.
The Minister of Development of Communities and Territories of Ukraine Olena Babak said that energy-efficient modernization will reduce the level of thermal energy consumption for the “light” package by 20%, for the “complex” package – by 60%.
In addition, 720 energy auditors have passed certification to date, and over the next two years their number should grow to 5,000, Hennadiy Zubko, Deputy Prime Minister and Minister of Regional Development, Construction, Housing and Utilities Economy in 2014-2019, said.
The European Bank for Reconstruction and Development (EBRD) under EBRD’s Ukrainian Sustainable Energy Lending Facility III (USELF III), a EUR 250 million facility to support renewable energy in Ukraine, will partially finance construction of the Dnepro-Bugsky wind farm with a planned capacity of 110 MW located in Oleksandrivka (Kherson region).
The decision was made by the EBRD board on July 10, EBRD Senior Adviser External Affairs for Eastern Europe & Central Asia Usov told Interfax-Ukraine on Thursday.
EBRD said that Dnepro-Bugsky Wind Power Station LLC is the borrower of the funds. The borrower is ultimately fully owned by three sponsors, Akuo Energy SAS (France), Saffelberg Investment NV (Belgium) and Aeolus Invest NV (Belgium). The limited liability company is a special purpose vehicle incorporated in Ukraine for the purpose of developing, constructing and operating the project.
The total cost of the project is EUR 188.64 million. The possible share to be paid by the EBRD is not disclosed.
According to other materials of the project posted on the bank’s website, Dnepro-Bugsky wind farm will belong to Akuo Energy.
The project consists of 25 4.4 MW turbines on the Dniprovsko-Buzsky Lyman, which will be delivered by Nordex. Under the project it is planned to build a 150 kV power line to the Posad-Pokrovska substation of 27.3 km long with 194 pillars.
The European Bank for Reconstruction and Development (EBRD) and the European Union (EU) are opening the EU4Business-EBRD credit line with the limit of EUR 60 million to finance projects of small- and medium-sized enterprises (SME) in Ukraine, EBRD Managing Director, Eastern Europe and Caucasus Matteo Patrone said at a presentation of the project in Kyiv on Friday.
He said the credit line with a limit of around EUR 60 million is intended for SME for using opportunities opened in relation with the Deep and Comprehensive Free Trade Area (DCFTA) Agreement signed by the EU and Ukraine.
Patrone said that borrowers using this credit line will be able to receive long-term loans in the amount of up to EUR 3 million. The loans will be issued in hryvnias.
The credit line is integration from the point of geography and economy, he said. After the establishment of the DCFTA between the EU and Ukraine, local companies obtained many opportunities. The launch of the EU4Business-EBRD credit line allows local SME, which provide almost 80% of jobs in Ukraine, but generate only around 40% of GDP, to have an additional access to financing to develop, become more competitive and meet EU standards, Patrone said.
For projects within the EU4Business-EBRD credit line that will meet certain requirements, incentive grants are also provided to cover up to 15% of the cost of projects.
Patrone said that the funds under this credit line will be provided through state-owned Ukreximbank, which received the equivalent of EUR 22 million for this program, and OTP Leasing, which received EUR 10 million in equivalent. Additional credit resources of around EUR 28 million will be available for other local financial institutions to join this program.
Head of the EU Delegation to Ukraine Hugues Mingarelli said during the presentation of the project that similar credit lines are opened to Georgia and Moldova.
The EU is trying to ensure that these credit lines benefit Ukrainian SME, as well as promote economic growth in Ukraine and strengthen economic relations between the country and the EU. In 2018, exports of Ukrainian goods to the EU grew by 15%, while imports of goods from EU by 11.5%, he said. The EU believes that the DCFTA credit lines contribute to the preservation of these positive trends, Mingarelli said.