IFC and Ukraine Partner to Boost Energy Efficiency in the Residential Sector

IFC, a member of the World Bank Group, and Ukraine’s state-run Energy Efficiency Fund are partnering to improve the energy efficiency of residential buildings and help families save on utility costs. 

The organizations signed an agreement today that will help channel up to $235 million in grants and loans over the next four years to Ukrainians who want to make their homes more energy efficient. According to official statistics, about 50 percent of residential heating gases in Ukraine are lost annually. Energy efficiency is also considered a key part of the government’s efforts to combat climate change.

Some 6,000 homeowners’ associations are expected to participate in the program, which will be financed by the newly formed Energy Effiency Fund and the €100 million Multi-Donor Trust Fund. Managed by IFC and supported by the European Union (EU) and Germany, the trust fund is designed to help Ukraine reduce its reliance on imported gas while also reducing state subsidies for energy consumption by citizens. 

“Today’s signing is another significant step in our efforts to promote energy efficiency,” said Hennadiy Zubko, Ukraine’s Vice Prime Minister and Minister of Regional Development, Building, and Housing. “Over 80 percent of Ukraine’s multi-family houses require energy-efficient modernization, and the Energy Efficiency Fund will work with homeowners’ associations to help with these renovations. IFC’s support to the fund will help ensure the program is managed to the highest standards and delivers on its goals.”   

Yuliia Holovatiuk-Ungureanu, CEO of the Energy Efficiency Fund, said: “We believe the fund will become a national success story. Cooperation with IFC and the donors will allow Ukraine to increase its energy efficiency and reduce carbon dioxide emissions, helping the country comply with its international obligations.” 

Rolf Behrndt, IFC Practice Manager, World Bank Group Finance and Markets Global Practice, said: “The Energy Efficiency Fund is an innovative tool that will help create a new market for energy efficiency in Ukraine. Partial grants for energy-efficient renovations of residential buildings will encourage residents to invest in such improvements, allowing families to save money on heating while improving comfort.” 

The agreement signed today sets the legal groundwork for the full-scale launch of the Energy Efficiency Fund later this year. It will start serving clients after its procedures are finalized and its official program is published.   

The creation of the Ukraine Energy Efficiency Fund is supported by an IFC advisory program launched last October and delivered by the World Bank Group’s Finance, Competitiveness, and Innovation Global Practice. Financed by the European Commission, the program also manages donors’ contributions to the Multi-donor Trust Fund and aims to create a conducive environment for renovations. IFC is also helping financial institutions build loan products targeted at homeowners’ associations, which will be offered to them before they receive grants. In addition, the Ukraine Energy Efficiency Fund is supported by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, which has also helped create a body of certified energy auditors. UNDP is also helping the energy efficiency program through the creation of new house owner associations in Ukraine.   

About IFC 
IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In fiscal year 2018, we delivered more than $23 billion in long-term financing for developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org