The Ukrainian city of Zhytomyr and NEFCO have signed a EUR 300,000 loan agreement to finance energy efficiency measures in the city. The funds will be used to revamp the city’s street lighting system and refurbish municipally owned buildings with more efficient insulation systems and heat exchangers.
The project is expected to translate into savings of some 560 megawatts of electricity and 360 megawatt hours of thermal energy per year for the city. The city of Zhytomyr will recoup some 721,000 UAH from these energy saving measures. Environmental payoffs will also be substantial as the project is expected to reduce CO2-emissions by some 483 tonnes per year.
The Zhytomyr energy efficiency project has been approved by the Ministry of Finance and the National Bank of Ukraine. The feasibility study for the project has been financed by the Swedish International Cooperation Agency (SIDA) and supported by NEFCO. The Ukrainian Institute for Budgetary and Socio-Economic Research (IBSER) has also provided technical support for the project.
NEFCO’s Facility for Energy Saving Credits is a loan programme, which primarily provides small scale loans to finance energy saving measures in municipally owned buildings such as schools, day care centres, hospitals and sports facilities. The energy saving measures can, for instance, include refurbishment of heat sub-centrals, installation of thermostatic valves and insulation of windows and doors. Loans can also be granted for the replacement of mercury-vapour street lamps with energy saving ones. At the moment, the facility only provides loans to Russian and Ukrainian local authorities and municipal companies.
The overall objective of the facility is to promote emissions reductions via reduced energy consumption, and the environmental monitoring process is mainly aimed on the release of carbon dioxide, nitrogen and sulphur oxides and volatile organic compounds.
Under the terms of the facility, NEFCO may finance, in local currency, up to 90 per cent of the investment costs of any project being financed under the credit programme. The repayment of the loan is directly linked to the savings of the investment with a maximum repayment period of 5 years.
NEFCO’s Board of Directors decided in June this year to boost financial support for energy efficiency measures in Russian and Ukrainian municipalities by raising up the maximum loan amount per project from EUR 260,000 to EUR 400,000 to meet increasing financial demand from NEFCO’s clients. At the moment, NEFCO has over 20 new energy saving projects in the pipeline valued at around EUR 5 million, and the corporation’s Facility for Energy Saving Credits has access to funds totaling EUR 12.4 million. In Ukraine, NEFCO has more than 15 project proposals from local cities, which qualify for ESC facility support.
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Read about a similar project in Kandalaksha, Russia