Ukraine: The EU NIP and the E5P Fund join the EIB in supporting Ukraine’s public buildings energy efficiency

• €5 million technical assistance grant from the EU Neighbourhood Investment Platform and a €4 million grant from the multi-donor fund E5P for greater energy efficiency of public buildings in Ukraine.
• Grants complement an earlier €300 million loan from the EIB.
• Investment to increase energy efficiency in 1 000 public buildings, save more than 1 million tonnes of CO₂ and benefit 2.5 million Ukrainians.

The European Investment Bank (EIB), the multi-donor fund E5P and the Ministry of Communities and Territories Development of Ukraine have concluded new agreements to further support the implementation of the Ukraine’s Public Buildings Energy Efficiency project (UPBEE). The cooperation signed today includes a €4 million grant from the multi-donor Eastern Europe Energy Efficiency and Environment Partnership (E5P) for technical assistance and investment grants, as well as €4 million technical assistance support from the EU Neighborhood Investment Platform (NIP). Another €1 million investment grant from the EU NIP will be signed in the coming weeks. These grants will facilitate the proper preparation and implementation of an earlier €300 million EIB framework loan aimed at increasing energy efficiency in 1 000 public buildings, including hospitals, schools, cultural centres, and kindergartens. 

The loan will enable the structural refurbishment, including installing modern equipment, modernising heating, ventilation and lighting systems, upgrades to exterior surfaces, etc. This will allow permanently reducing the energy bills of municipalities and improving the quality of public services. More importantly, the project is expected to positively impact the comfort of the 2.5 million people visiting the buildings and saving more than 1 million tonnes of CO₂ for the sake of the climate. The energy efficiency modernisation of the public facilities, in particular of hospitals, will strengthen resistance to the COVID-19 pandemic and foster future resilience.

The interested municipalities and other public entities in Ukraine will be able to submit their proposals for energy efficiency renovations starting from December 2021. Central governmental bodies, local state administrations, bodies of local self-government, and state and communal enterprises other than private enterprises from all regions of Ukraine are eligible to apply. 

Oleksiy Chernyshov, Minister for Communities and Territories Development of Ukraine, said: “Energy efficiency is an integral part of regional development for the coming years. I am sincerely grateful to the EU and the multi-donor fund E5P for the grant support for the implementation of a €300 million EIB framework loan on the energy efficiency of public buildings. I am convinced that the agreements signed today are an important step towards Ukraine's energy independence.”

Vasyl Lozinskyi, First Deputy Minister of Communities and Territories Development of Ukraine said: “I am grateful to our partners for their support. The project will enable us to increase the energy efficiency of about 1,000 public buildings, including schools, cultural centers, kindergartens and hospitals, reduce energy use and CO₂ emissions, improve energy savings and quality of life of local residents.”

Louise Morsing, Deputy Head of Mission, Embassy of Sweden in Ukraine, said: ”Sweden is the initiator of the E5P concept and has over the years contributed with over €40 million to the E5P Fund in Ukraine. These funds are to support energy efficiency projects in Ukraine that reduce energy consumption, improve the living and working conditions of the citizens and overall contribute to the global efforts including our commitment to Agenda 2030 for Sustainable Development to reduce greenhouse gas emissions to minimise climate change impacts. Sweden will continue to support E5P as a flagship initiative to mobilise financial resources for the green climate-friendly transition of municipalities in Ukraine and across the Eastern Partnership region.”

Head of Cooperation at the European Union Delegation to Ukraine Frederik Coene said: “The EU is actively supporting energy efficiency efforts in Ukraine in many ways, directly, through EU NIP or through E5P. With the agreements signed today and the upcoming €1 million investment grant, the EU will help Ukraine make a big step closer to the implementation of an ambitious energy efficiency project. Approximately 300 small and medium size municipalities of Ukraine will benefit from the project, which will improve life for the 2.5 million people using the public buildings: population of all ages, students, professors, patients, medical staff working in a safe and healthy environment.”

Jean-Erik de Zagon, Head of the EIB Representation in Ukraine said: “Energy efficiency has a central role in tackling climate change that tops the EIB's list of priorities. By signing these two new agreements, we are delighted to foster and further support the energy-efficient refurbishment of public buildings in Ukraine. Together with the EU, acting through the NIP fund, and the donors of the E5P fund, we are sure that by supporting better energy performance, reduction of CO₂ emissions and sustainable urban development we will all together contribute to a better environment and better living conditions for the people.”

Adonai Herrera-Martínez, EBRD/E5P Environmental Funds Director, said: “The E5P donors were particularly supportive of the Energy Efficiency Programme for Ukraine given its priority focus on capacity building at central and municipal levels. Such targeted action is key for the overall success of this large-scale programme and, of similar investments in the future. The €4 million E5P contribution will provide both technical assistance and investment grants for energy efficiency measures in hospital buildings, reflecting the Fund’s emphasis on a green post-COVID-19 pandemic recovery.”

Background information

The EIB has worked with Ukraine since 2007. Ukraine has been the main recipient country of EIB support in the Eastern Neighbourhood, accounting for more than 60% of EIB lending activity in this region. The Bank focuses on social and economic infrastructure, transport and connectivity, local private sector development, energy efficiency, climate action, and innovation. Today, the EIB is one of the largest investors in Ukraine with signed projects of about €7bn.

The Eastern Europe Energy Efficiency and Environment Partnership (E5P) is a multi-donor and multi-IFI support fund created thanks to an initiative of the Swedish Presidency of the European Union in 2009. The E5P fund for Ukraine totals €137,5 million representing pledges made by the European Union, as the largest contributor, Sweden as the largest bilateral contributor to the fund, Germany, Norway, Switzerland, United States, Denmark, Poland, Finland, Estonia, Iceland, Latvia, Lithuania, Ireland and Slovakia. Ukraine is also a donor to the E5P with €20 million. The E5P grants are used alongside the IFI loans to support municipal infrastructure investments that will boost Ukraine’s energy efficiency, while also having a beneficial impact on the environment and combating climate change.

The Neighbourhood Investment Platform (NIP) is aimed at supporting the EU partner countries covered by the European Neighbourhood Policy (ENP) in their efforts towards better governance and economic and social development, through matching loans from the European public finance institutions (including EIB) with Community grants. NIP supports infrastructure projects mainly in energy, transport and environment sectors. The NIP can also support development of the private sector. Technical assistance (TA) grants are used to improve the implementation of the financed projects, thereby enhancing policy coherence between EIB project decisions, country and sectoral economic reforms and ENP overall objectives.

The Ministry of Communities and Territories Development of Ukraine is the Ukrainian government ministry responsible for public housing infrastructure development.