EU to give €70 million for energy efficiency in Ukraine

The Eastern Europe Energy Efficiency and Environment Partnership will be launched during a donor conference, jointly organised by the European Commission and the Swedish Presidency of the EU, on 26 November in Stockholm.

The European Commission is already supporting efforts to improve Energy Efficiency in Ukraine, and will begin disbursing €70 million in related sectoral budget support early next year.

The Partnership will promote investment in energy efficiency in the Eastern Partnership region, starting in Ukraine with a particular emphasis on the district heating sector. During the conference, donors will make pledges for a Fund to support the Partnership in its objectives, which will serve to leverage much larger sums lent by the International Financial Institutions. The European Commission is ready to support the initiative by: contributing €10 million per year over a four year period to complement Ukraine's own contribution to the Fund; finance projects under the Initiative, from the Neighbourhood Investment Facility; help mobilise actions under the initiative through the Covenant of Mayors; and contribute to creating the conditions for investment by assisting the necessary legislative and policy reforms under the INOGATE energy programme.

Benita Ferrero-Waldner, Commissioner for External Relations and European Neighbourhood Policy, will represent the Commission in the Donor Conference. She said before the conference: " Ukraine has a fantastic potential to save energy, and e nergy efficiency represents Ukraine’s single best opportunity to improve its energy security by reducing its import dependency. Modest investments can bring big results. I hope that we can demonstrate in Ukraine that energy efficiency is good for the economy, good for the consumer, and good for the planet – so that the projects we undertake here can be copied elsewhere ".

Background

The need for greater energy efficiency in Eastern Europe is well known. While initiatives have been taken to address this challenge, it is clear that further substantial measures are needed to reduce green house gas emissions, import dependencies and costs. This is evident not least in view of the present economic crisis in the region and the forthcoming meeting in Copenhagen.

A Working Party on Energy Efficiency in Eastern Europe was set up in April 2009 to address this issue. The report of this Working Party, a joint product of the European Commission, the European Bank for Reconstruction and Development, the European Investment Bank, the Nordic Investment Bank, the Nordic Environment Finance Corporation, the World Bank, the International Finance Corporation and Sweden, was finalised in July after consultations with Ukrainian authorities. The report recommends the setting up of a specific financial mechanism to promote key investments in energy efficiency in the Eastern Partnership region, starting in Ukraine. The mechanism, which will build on the positive experience gained under the Northern Dimension Environmental Partnership (NDEP), will require mobilising grant funding from donors for a Support Fund.

The European Commission is already supporting efforts to improve Energy Efficiency in Ukraine, and will begin disbursing €70 million in related sectoral budget support early next year.