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.
EU Commissioner Johannes Hahn and IFC CEO Philippe Le Houérou signed an agreement to set up a new multi-donor fund to help boost energy efficiency in Ukraine. Germany is the first country to announce a financial contribution to the new fund, which will be managed by IFC. Under the agreement, IFC will initially manage up to 53 million euros of funding from the EU and Germany.
Resources from the fund will be put into the Ukrainian Energy Efficiency Fund, a new initiative by the Ukrainian government 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.
“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 government.”
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, 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 subsidies to investments and reducing pressure on the public budget.”
Ukrainian Finance Minister Oleksander Danylyuk was present at the signing ceremony.
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. Further technical assistance will be provided by the World Bank, Germany’s GiZ, and Poland.
IFC’s program is built on multi-year advisory efforts to support residential energy efficiency reform in Ukraine, including implementing legislative changes to enable local homeowners’ associations to access finance, creating financial instruments to enable modernization, and raising awareness of the importance of energy saving and its economic benefits. IFC’s Ukraine Residential Energy Efficiency project, implemented in partnership with the Swiss Confederation, has been in operation since 2010.
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with more than 2,000 businesses worldwide, we use 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
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- Publication date
- 21 April 2018
- Directorate-General for Neighbourhood and Enlargement Negotiations