The JSC “Decarbonization Fund” was established at the initiative of the State Agency on Energy Efficiency and Energy Saving to provide state support through the funds of a newly created budgetary fund. This is the first state revolving mechanism for targeted financing of energy efficiency and decarbonization projects for businesses and municipalities. It is also an example of effective management of state property during wartime.
How was it created?
The process began with the return of a non-operating company, JSC “Ukrsvitloleasing”, which had various types of debts, from the State Property Fund. In six months, the company was brought into compliance with all international standards and requirements of the National Bank of Ukraine (NBU). The company received licenses, issued shares, and was filled with financing.
How does it work?
The Fund provides preferential loans in UAH. The interest rate is 9% per annum. For national producers implementing the President’s “Made in Ukraine” program, the rate is 7%. The loan amount ranges from 120000 UAH to 25 million UAH, with terms ranging from 1 to 10 years.
Who can receive a loan?
- Local government bodies (schools, hospitals, kindergartens),
- Municipal enterprises (primarily heat energy and water utilities),
- Industrial enterprises,
- Small and medium-sized businesses.
For what purposes?
- Equipment for energy modernization,
- Solar power stations,
- Heat pumps,
- Cogeneration,
- Alternative heat supply,
- Other distributed generation projects,
- Thermal modernization of public buildings.
What are the project requirements?
- Reduction of energy intensity in production by 15% or more,
- Replacing the use of traditional resources by 20% or more,
- Achievement of minimum energy efficiency standards for buildings (Class C), which will allow savings of up to 50%.
What is unique about the Fund?
Until now, no similar instrument has covered such a wide audience of participants. Importantly, the Decarbonization Fund is not dependent on grant funding: we have introduced European experience in revolving mechanisms of state support for the first time. The Fund is financed through an environmental tax on CO2 emissions from stationary installations, as well as state borrowings aimed at supporting energy efficiency and reducing carbon emissions.
The first loan has already been issued, and the project has been financed: UAH 18 million will go toward energy service for the street lighting network in Voznesensk, Mykolaiv region. The results will include: savings for local budgets, reduced heat and electricity consumption, and a reduction in carbon dioxide emissions.
Several more applications are under review. By the end of the year, it is planned to issue UAH 859 million in loans to businesses and municipalities for energy-efficient measures.
For more details, visit the official website of the Decarbonization Fund: fdu.com.ua