Washington, D.C., April 21, 2018—IFC,
a member of the World Bank Group, the European Union, and Germany signed
agreements today to support the Ukrainian government’s work in reducing
energy waste and greenhouse gas emissions in the residential sector.
Agreements were signed by IFC and EU likewise IFC and Germany to set up
a new multi-donor fund to help boost energy efficiency in Ukraine. Under
the agreement, IFC will initially manage up to 53 million euros of funding
from the EU (43 million euros) and Germany (10 million euros).
Resources from the fund will co-finance programs
of the Ukrainian Energy Efficiency Fund (EEF), a new initiative developed
by the Ukrainian government, with combined support from the EU and Germany
to provide grants to homeowners’ associations for energy-efficiency renovations
in multi-family buildings. Ukraine has one of the largest housing stocks
in Europe, but many homes are old and inefficient, with poorly insulated
buildings that lose as much as 50 percent of their heat. Furthermore, energy
is highly subsidized in Ukraine.
“We are pleased to support energy saving measures in Ukrainian homes that
will have a direct impact on the daily lives of citizens and stimulate
the local economy,” said Johannes Hahn, EU Commissioner for European Neighbourhood
Policy and Enlargement Negotiations. “I'm glad we have an experienced
partner in IFC to efficiently implement this programme with the Ukrainian
IFC CEO Philippe Le Houérou said: “Climate change is a global threat and
addressing it requires significant investment. This partnership is an important
step in enabling us to use public funds to leverage private sector resources
and scale up climate-smart and energy-efficient investments in Ukraine.”
Svenja Schulze, German Federal Minister for Environment, Nature Conservation
and Nuclear Safety (BMU), said: “Energy efficiency is an investment in
the future: it enhances security and resilience, creates jobs, and improves
the environment. The establishment of the EEF will support Ukraine in transforming
energy subsidies to investments and reducing pressure on the public budget.”
"Today we have launched an important project which will become one
of the main instruments for achieving energy efficiency,” said Ukrainian
Finance Minister Oleksander Danylyuk during the signing ceremony. “The
new project will assist Ukraine in switching to a more modern energy consumption
and accounting model. The project will also boost job creation – up to
75,000 new jobs for engineering and construction personnel, energy service
industry and energy management will be created as a result."
The EU contribution is part of a comprehensive Energy Efficiency support
programme for Ukraine (EE4U) adopted last year by the European Commission.
The EU programme amounts to date to a total of 50 million and covers beyond
this contribution additional technical assistance support for the introduction
of modern energy efficiency standards and regulations.
IFC is also launching an advisory program through the World Bank Group’s
Finance, Competitiveness and Innovation Global Practice to help establish
and operate the fund, set up the delivery of grants through financial institutions,
and deliver market-level interventions that facilitate the demand for EE
renovations. Through Germany’s International Climate Initiative, BMU contributes
5 million euros to support with capacity building and in aligning the EEF
and its programs with the subsidy reform. Further technical assistance
will be provided by the World Bank and Poland.
IFC—a sister organization of the World Bank and member of the World Bank
Group—is the largest global development institution focused on the private
sector in emerging markets. We work with more than 2,000 businesses worldwide,
using our capital, expertise, and influence to create markets and opportunities
in the toughest areas of the world. In FY17, we delivered a record $19.3
billion in long-term financing for developing countries, leveraging the
power of the private sector to help end poverty and boost shared prosperity.
For more information, visit www.ifc.org.