The new Norway-Ukraine Energy Efficiency Initiative (NUEE) was launched by the Norwegian State Secretary of Foreign Affairs Audun Halvorsen in connection with his visit to Ukraine.
The new initiative, with EUR 20 million grant funding from Norway, aims to scale up municipal financing for energy efficiency in public buildings, strengthen self-governance in Ukrainian municipalities and highlight sustainable procurement practices during the implementation of the programme.
A joint declaration between Norway and Ukraine on increased cooperation within the energy sector was signed in January 2019 in connection with Prime Minister Volodymyr Groysman’s visit to Norway. One of the cooperation areas highlighted in the declaration is energy efficiency and the importance of increased investment within this field.
“Energy efficiency is one of the most important priorities for the Ukrainian government at the moment. In this regard, we are very grateful for the new initiative that will finance energy-efficiency projects throughout Ukraine”, said Alex Riabchyn, Deputy Minister of the Ministry of Energy and Environmental Protection of Ukraine.
“The Norwegian government has recently decided to increase funding to Ukraine for energy efficiency improvements. The energy sector is a key sector in Ukraine’s reform efforts and an area where Norway can offer knowledge and experience. It is a great honour and pleasure for me to officially launch this new Norway-Ukraine Energy Efficiency Initiative, which will enable energy efficiency improvements in public buildings in Ukrainian municipalities”, said Audun Halvorsen, State Secretary of Foreign Affairs, at the programme launch in Kyiv.
The NUEE programme is Norway’s continuation of the successful Nordic Initiative for Energy Efficiency and Humanitarian Support – Ukraine (NIU) programme, which was established in autumn 2014.
“The interest in and commitment to the NIU programme by the Eastern Ukrainian cities exceeded our expectations, and we are very pleased to have been appointed fund manager of the new programme by the Norwegian Ministry of Foreign Affairs,” said Amund Beitnes, Senior Investment Manager at NEFCO, in connection with the NUEE programme launch.
The new NUEE initiative will finance socially important municipal buildings, such as day-care centres, health care facilities and schools, as well as demonstration projects that benefit vulnerable groups, such as internally displaced persons from the conflict areas in Eastern Ukraine. In addition, the programme strives to enable municipalities to govern themselves by attracting external financing and making local investment decisions, as well as implement best practices in procurement procedures.
The first agreed medium-sized project within the NUEE programme will include the refurbishment of individual heating substations in some 450 public buildings in Kyiv, where NEFCO has agreed to lend EUR 5 million in addition to EUR 1.3 million in grants from the NUEE programme. The City of Kyiv will provide EUR 1 million of its own funding for the project. The project is expected to result in substantial cost savings thanks to reduced heat usage in the buildings concerned and reduced CO2 emissions, and benefit approximately 186,000 children, pupils and staff in the city.
The NUEE projects will reduce both the energy consumption and increase the lifetime of the renovated buildings and at the same time save costs for the Ukrainian municipalities. Funding is available for projects across Ukraine, but with priority for the Donetsk, Luhansk and Azov sea regions.
The NUEE programme provides blended funding consisting of loans and grants as well as technical assistance and project support. In addition to the Norwegian contribution of up to EUR 20 million of grant financing, NEFCO will leverage each project with loan financing. The programme will cover both small demonstration projects, up to ten per year, with soft loans of up to EUR 500,000 for each project, and medium-sized projects, for which NEFCO may provide up to EUR 5 million in loan financing. The beneficiaries are expected to provide at least ten per cent of the project costs from their own funds.
NEFCO has financed over 240 projects in Ukraine since 2010, including approx. 180 within the public sector. In addition to its own loan investments, NEFCO is a fund manager for several programmes financed by the Nordic governments related to energy efficiency, renewable energy and district heating in Ukraine.
The Nordic Initiative for Energy Efficiency and Humanitarian Support – Ukraine (NIU)
The foreign ministers of the Nordic countries decided in 2014, on Norway’s initiative, to launch a grant-financed programme for urgent investments needed in Eastern Ukraine. The emphasis was initially on fully grant-financed projects in the five regions closest to the conflict zone. Since then, the programme has grant-financed 39 projects for urgent renovations of public buildings and street lighting systems in 30 cities, of which 25 have already been implemented. Read more about the NIU programme.
For further information, please contact:
Amund Beitnes, Senior Investment Manager at NEFCO
Amund.Beitnes@nefco.fi, tel. +358 10 6180 658
Julia Shevchuk, Chief Investment Adviser at NEFCO
J.Shevchuk@nefco.org.ua, tel. +380 50 358 3518