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iC and dena held the webinar “Energy efficiency financing tools in public buildings in Ukraine: practical steps and pitfalls”

19 March 2021

The webinar “Energy efficiency financing tools in public buildings in Ukraine: practical steps and pitfalls” took place on March 18, 2021. It was initiated by the German energy agency dena in the frames of the project on implementation of energy management systems and climate protection systems in pilot municipality in Kyiv region. More than 30 participants joined the event.

Sergiy Novoselov and Mykyta Tymoshenko, experts of iC, were the main speakers and moderated the webinar.

Investment needs for comprehensive thermal modernization of residential buildings comprise appr. EUR 45 billion. Available financing for the sector is estimated only in EUR 200 million. Investment needs for thermal modernization of public buildings comprise EUR 10 billion in line with available financing in total of EUR 350 million.

Apart the well-known barriers on the way of getting financing like high interest rates of banks in hryvnia and exchange rate fluctuations, Sergiy Novoselov indicated the lack of project proposals ready for financing, at the same time there is a well-known fact that an effective planning makes 50% of success.

Key tips from Sergey:

  1. Start with small projects;
  2. Monitor the current consumption of public buildings;
  3. Prognose and calculate the expected results in 3-7 years.
  4. Try to find contacts of financial organizations and donors directly, avoiding “investment almanacs”. Contact financial institutions as needed, not once a year;
  5. If possible, introduce energy management systems at the initial stages of projects on comprehensive thermal modernization of buildings in cities.

Sergiy also spoke about the reasons for the low disbursement (both loan and grant funds) in Ukraine. In particular, for most IFI programs and donors in the field of energy efficiency, the average disbursement of loan funds for 2015-2021 is not more than 2-5%! And not more than 10 percent for the grant components — for the same period.

He described the procedures for the city to submit a package of documents and obtain approval from the Ministry of Finance, according to the resolution of the Cabinet of Ministers No 70 and the order of the Ministry of Finance No 922. At the same time, Sergiy noted that now this process has become easier and more transparent.

When submitting a project for the Ministry of Finance approval, everything matters: starting from the right concept of the project benefits for city to correct spelling of the address of the Ministry of Finance.

Calculation formula: the maximum loan amount that can be taken: 2 city’s development budgets, and the maximum loan service amount: 10% of the budget’s general fund.

It is important to remember that energy efficiency projects in cities in Ukraine are rarely completed in one “political cycle” (5 years), so you should try to:

  • Share with information within the relevant unit;
  • Duplicate archives in paper and electronic form;
  • Create a single centre for storing information.

In the second section of the webinar, Mykyta Tymoshenko analysed the preparation of business plans for projects: revealed technical and organizational aspects; defining measures for further implementation, calculation of volumes and costs. At the end of the building’s operating cycle, the annual maintenance costs of the building increase up to 2 percent or more of the building’s value.  Based on that fact Nikita shared the case: comprehensive thermal modernization is an opportunity to reduce maintenance costs and prolong lifecycle of the building!

Certainly, Mykyta outlined the common mistakes. And during the Q&A session he gave practical tips and advised to involve energy managers in the process of quality assurance and of business plans’ development.

In general, the webinar showed the deep readiness of the audience. Participants were interested in best practices in Ukraine and European countries, methods of calculation and evaluation of financial indicators, real barriers to the projects’ implementation of the buildings thermal modernization within one calendar year and other open issues related to investment in energy efficiency projects.

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