The FINANCIAL — The EBRD is providing a follow on loan of $50 million to JSC “The State Export – Import Bank of Ukraine”. Loan proceeds will be used to finance large and medium-sized energy efficiency and renewable energy projects of up to $5 million each.
The transaction is implemented under a €150 million framework to work with financial institutions on energy efficiency and renewable energy projects in Ukraine.
This an extension a $50 million loan to UkrExim Bank provided under the Ukraine Energy Efficiency Programme in 2007. UkrExim Bank has to date almost fully utilised the existing loan by providing funding of investment needs worth $47 million to two dozens of Ukrainian private enterprises. The main purpose of this Programme is to help improve Ukraine’s energy intensity, which is over three times that of the average for the European Union. It is also expected that some of the financed sub-projects will be able to monetise their emission reduction under JI Mechanism of Kyoto Protocol.
As a result of the Programme 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. Technical assistance for the Ukraine Energy Efficiency Programme is financed by Austria and Sweden.
The project confirms EBRD’s strong commitment to continued support of Ukraine’s banking sector, which has reached almost USD500 million in new signings in 2008. The new loan will contribute to the facilitation of financial intermediation in Ukraine by improving access to much-needed energy efficiency lending to private companies in the conditions of contracting access to credit in the economy.
Proceeds of the Loan will further support UkrEximBank’s significant energy efficiency and renewable energy pipeline developed as a standard lending product and backed up with relevant institutional capacity and internal expertise.
The European Bank for Reconstruction and Development is the biggest financial investor in Ukraine. As of November 2008, it had committed over €3.97 billion through 163 projects.