Half of the New Renewable Energy Connections in Ukraine Has Been Financed by Ukrgasbank
By Kyrylo Shevchenko, chairman of the board, Ukrgasbank
In 2015, when the Paris Agreement was adopted as the successor of the Kyoto Protocol, the Green Bank Network brought together green banks. With the exception of several municipal banks in the USA, these banks are state-owned. The banks in the network are expected to finance programmes aimed at achieving the objectives of the Paris Agreement, i.e. keeping the increase in global temperature below 2°C. To this end, over 50 trillion dollars will be invested in various green projects by 2040. These investments cannot be attracted without a carbon pricing instrument in place. Under a carbon pricing there are strong economic incentives for the private sector to make such investments and these incentives grow over time. Moreover, these investments need to be facilitated by green banks with the appropriate expertise in financing green projects.
All over the world, green banks finance three types of projects: renewable energy, energy saving technologies, and environmental protection. Today, these projects are under-financed by USD $20.7 trillion globally. For example, according to the International Finance Corporation (IFC), if Ukraine is to achieve its goals on green financing by 2030, it has to invest USD $70 billion in this type of projects.
It is very welcome news that Ukraine is already a leader in terms of growth of green energy sources. Since the beginning of 2015, EUR 650 million have been invested in renewable energy sources in Ukraine and 677 MW of new renewable capacity have been commissioned. Today, the total capacity of all renewable energy sources objects is 1.6 GW.
During the first half of 2018, roughly 270 MW of renewable capacity were installed at a feed in-tariff in Ukraine to generate electrical power from renewable energy sources. It is a twofold increase over the same period of 2017 (127 MW) and exceeds the capacity installed for entire 2017 (257 MW). Most of the new facilities are solar power stations with a total capacity of 206 MW.
According to the study by the National Academy of Sciences of Ukraine, with appropriate investment, about 90% of the Ukrainian energy can be produced from renewable energy sources.
That is why Ukrgasbank has become the first ECO-bank in the country, to support renewable energy projects and introduce environmental standards in manufacturing, transport and social life of every Ukrainian. Today, Ukrgasbank is the only bank in the Eastern Europe region with full cycle implementation of energy efficient projects, we also carry out a unique and comprehensive expert analysis of the impact of harmful emissions and waste from factories.
In partnership with IFC, we have already implemented 115 large-scale projects, including: 81 solar power plants, 4 wind power plants, 18 small hydropower plants, 4 biomass TPPs and 8 biogas power plants. Since 2017, Ukrgasbank has been the indisputable leader in Ukraine in green financing when it comes to the introduction of new capacities. We have funded projects for EUR 382 million with a total capacity of 623 MW.
At the end of the first half of 2018, every other megawatt of new renewable energy connections in Ukraine has been financed by Ukrgasbank (according to National Commission for State Regulation of Energy and Public Utilities). Last year it was a third of new projects.
Owing to Ukrgasbank’s projects, the total capacity of clean energy produced will be over 1 terawatt hours per year (1000 GW hours per year). This would be enough to provide environmentally friendly electricity for about 270,000 households for a year. Today, thanks to socially responsible Ukrainians and businesses that took out eco-credits from Ukrgasbank, CO2 levels have dropped by 896,000 tons – and it’s as if half a million cars with internal combustion engines have been taken off our streets.
Through eco-programmes, the bank is offering businesses an easy and affordable transition to modern environmentally friendly equipment, which will significantly reduce harmful emissions. Moreover, we will offer advice on how to do this properly and at minimal cost. Now it is available for every Ukrainian. The interest rates for such financing are always below market rates – this is how we incentivise transitioning to clean and energy efficient activities. In a very short period of time, we have managed to become the number one eco-bank in the country, and we will not stop at this.
Ukrgasbank was the first bank in Ukraine to introduce a unique loan programme for turn-key residential solar power stations. To date, 110 solar stations worth UAH 34.4 million have been financed. The bank’s clients who own home solar stations are not only saving money, but they are also making extra monthly income from selling surplus power at a green tariff.
Ukrgasbank is an undisputable leader in offering energy-efficient loans to housing and building cooperatives, including the largest in Ukraine projects of the complete thermal modernisation of buildings – almost UAH 10 million in Kyiv and UAH 3.5 million in Lutsk.
With Ukrgasbank’s affordable green-loans, each one can contribute to the healthy future for the subsequent generations of truly free Ukrainians.