The European Bank for Reconstruction and Development (EBRD) is providing a loan facility of US$50mn to The State Export-Import Bank of Ukraine (Ukreximbank), the second largest state bank in the country.


The main purpose of this project, which is the first ever EBRD cooperation with Ukreximbank, is to tackle Ukraine’s energy intensity, which is over three times that of the average for the European Union.


The transaction is implemented under a €100mn framework to work with financial institutions on energy efficiency and renewable energy projects in Ukraine, approved by the bank’s board in October 2006.


Potential clients under the energy efficiency framework will be local private sector companies, which should be able to receive sub-loans of up to US$5mn from participating banks.


As a result of the project implementation, private sector companies will reduce their energy consumption and costs, something that is particularly important in the context of rising energy prices in Ukraine. The impact will help businesses remain competitive and reduce their emissions of greenhouse gases, as well as helping to work against climate change and mitigating its effects.


The framework is supported by several important technical assistance components. A project consultant, funded by the Swedish government, is responsible for project screening, marketing and an information campaign. At the same time energy efficiency experts, funded by the Austrian federal ministry of finance, are assisting potential sub-borrowers to identify specific energy efficiency measures, prepare rational energy utilisation plans and assist in preparing loan applications.


A market demand study, also funded by the government of Austria, is being finalised, and will evaluate the overall market potential for energy efficiency.