Release date: 6 November 2024
Promoter – Financial Intermediary
ACCEPTABLE BANK(S)Location
Description
The operation will finance municipal district heating and energy efficiency projects carried out by local authorities in Ukraine.
Additionality and Impact
The operation will contribute to Ukraine's efforts to re-establish and ensure safe and resilient operation of the district heating network, which provides most of the hot water and space heating in large cities, that have been targeted by Russian forces.
The operation is aligned with Ukraine's Energy Strategy and with the National Energy and Climate Plan. The operation falls under the EIB's Ukraine Energy Rescue Plan, including temporary derogations to the Bank's Energy Lending Policy, as approved by the Board of Directors on 7th October 2024 (CA 24/364). The LE addresses identified immediate and short-term needs of Ukraine to deal with the current energy crises.
The operation builds on the needs defined in Ukraine's 2024 Rapid Damage and Needs Assessment, which were further increased after summer 2024 air strikes, that left the amount of damaged district heating assets at USD 2.1 Bn. The total cost for reconstruction and recovery over the next 10 years (2024-2033) is estimated at USD 4.7 Bn. The Project supports activities in priority areas of the Ukraine Plan prepared with the support of the European Commission in view of the EU Ukraine Facility.
The implementation of the projects is expected to face technical and governance challenges. A number of mitigants are envisaged, including Technical Assistance to the Final Beneficiaries and Ukrainian banks. This should have a positive impact on the capacity to absorb the LE
Objectives
The aim is to urgently help Ukraine face the energy crisis after the attacks inflicted by Russia to over 800 district heating plants since early 2024. The loss of cogeneration capacities in several large cities, led to strong concern about the municipalities' ability to ensure vital heating during the two coming winters. The most affected areas are Kyiv, Kharkiv, Odesa and their suburbs, inhabited by approximately 6.5 million people. In this context, the project scope is to restore the electricity and heat generation capacity destroyed or out of order to ensure minimum critical services for the next winters.
Sector(s)
Proposed EIB finance (Approximate amount)
EUR 250 million
Total cost (Approximate amount)
not applicable
Environmental aspects
Final beneficiaries will be requested to comply with applicable national and EU legislation, as appropriate.
Procurement
Final beneficiaries will be requested to comply with applicable national and EU legislation, as appropriate.
Status
Approved - 11/12/2024