IFC, a member of the World Bank Group, and Ukraine’s Ukrgasbank have signed an agreement that will help local companies make investments in renewable energy and energy efficiency, part of a wider effort to combat climate change in Ukraine.IFC will support the development of Ukrgasbank’s sustainable energy finance business. That is an emerging field in which banks provide credit to clients who want to invest solar arrays, efficient water treatment systems, and other green technology. The project is considered key in Ukraine, where the per-capita use of energy is among the highest in the world. Ageing infrastructure and transmission losses mean the average Ukrainian uses 3.7 times more energy than the average German and three times more than the average European.
“There is enormous untapped potential in Ukraine for investments in sustainable energy projects,” said Kyrylo Shevchenko, CEO of Ukrgasbank. “This work is part of our broader strategy to reform the bank and help our clients mitigate climate change and contribute to a cleaner, more sustainable environment, which will become an invaluable heritage for the Ukraine’s generations to come.”The project is expected to help support the generation of more than 500,000 mega-watt hours of clean energy annually, and prevent the release of 1.6 million tons of carbon dioxide a year.
“Investments in energy efficiency and renewable energy are not only good for the environment, they are also good for business since they help reduce energy consumption, save costs, and make Ukrainian companies more competitive,” said Rufat Alimardanov, IFC’s Regional Manager for Ukraine and Belarus.The project is part of IFC’s Sustainable Energy Finance Program in Ukraine, implemented in partnership with the Austrian Federal Ministry of Finance and the Ministry of Economic Affairs of the Netherlands. IFC will help Ukrgasbank scale up its lending to smaller businesses and large corporations in areas such as energy efficiency, renewable energy, green transport, water efficiency, and waste treatment. IFC will also support the bank in improving its risk profile and enhancing social and environmental standards.
IFC’s Sustainable Energy Finance Program aims to develop the capacity of banks and financial institutions to extend sustainable energy financing to the private sector. To date, through the program, IFC has supported 125 financial partners through 135 sustainability and climate projects in 35 countries, providing advisory services and $3.8 billion in financing. That has helped reduce greenhouse gas emissions by over 25 million tons.