Commercial banks will provide loans for the energy modernization of public buildings in small and medium-sized cities in Ukraine.
This was announced by Andrii Hapon, Chairman of the Board of the Entrepreneurship Development Fund.
He noted that a cooperation agreement has been signed between the Entrepreneurship Development Fund and Globus Bank under the Program to support the financing of energy service companies (ESCO companies) that will carry out energy modernization of public buildings in small and medium-sized cities in Ukraine.
This Program was developed by the Entrepreneurship Development Fund to implement the project "Removing Barriers to Promote Investment in Energy Efficiency of Public Buildings in Small and Medium-Sized Cities of Ukraine through the Use of the ESCO Mechanism," which is funded by the Global Environment Facility and implemented by the United Nations Development Programme (UNDP).
The aim of the project is to create an ESCO Fund based on the Entrepreneurship Development Fund, where various financial support tools will be combined to provide affordable financing for ESCO companies. These tools include interest compensation under the state program "Affordable Loans 5-7-9%," loan guarantees from the Fund, and partial repayment of ESCO company loans with the support of UNDP.
In the pilot phase of the project, around 10 ESCO companies are expected to participate to support the financing of their energy service contracts.
According to the terms of the project, ESCO companies can receive financial support of up to 20% of the energy modernization project costs for partial loan repayment. The maximum loan amount for one energy service contract is UAH 8 million.
"This is truly a significant event in the history of independent Ukraine, as the country urgently needs energy modernization to save costs and achieve energy independence. We are therefore pleased to launch this crucial project in the country," emphasized Andriy Hapon.
Anna Zhovtenko, the GEF/UNDP Project Coordinator for Energy Efficiency in Public Buildings, noted that energy service contracting has long proven to be an effective tool for increasing the energy efficiency of buildings. The creation of the ESCO Fund is a key step in developing energy efficiency and decarbonization in Ukraine.
"UNDP's cooperation with the Entrepreneurship Development Fund creates new opportunities for ESCO companies. With stable and affordable financing, energy service companies will be able to implement more projects, helping to modernize public buildings effectively, reduce energy consumption, and ultimately mitigate the impact of climate change. The ESCO Fund will become a tool to attract more investment in energy efficiency and contribute to Ukraine's sustainable energy future," she emphasized.
In turn, Olena Dmitriieva, First Deputy Chairperson of the Management Board of GLOBUS BANK, noted that Globus Bank plans to combine participation in the UNDP financial support program with the "Affordable Loans 5-7-9%" program and the guarantees of the Entrepreneurship Development Fund. This, on one hand, will significantly reduce interest rate burdens on ESCO companies and, on the other hand, lower the requirements for loan collateral.
"Energy service companies modernize public and municipal buildings at their own expense. Over the next 10-15 years, the budget organization repays the modernization debt through energy savings. Access to favorable loans is a way to attract significant investment into the development of this business. Moreover, the systemic energy modernization of municipal buildings will gradually be addressed," noted the banker.
The expert expects that such loans will be highly popular among energy service companies, especially when combined with the "5-7-9" program. By the end of the year, the bank plans to issue at least 10 such loans.
"Involving ESCO companies in the energy modernization of buildings is particularly important for communities that lack substantial budget resources. We are convinced that all schools and hospitals, especially in small towns, should become 'warm' and energy-efficient," concluded Olena Dmitriieva.
