Reading Time: 2 minutes
Building back greener is already underway in Ukraine where more residents will soon reap savings on their energy bills as IFC, a member of the World Bank Group, Ukraine’s Energy Efficiency Fund, and PrivatBank, the country’s largest state-owned bank, are partnering to boost energy efficiency in the country’s residential housing sector.
IFC’s advisory program—implemented in partnership with the European Union and Germany—will help PrivatBank, which serves over 30 percent of Ukraine’s homeowners’ associations, provide loan products to homeowners’ associations participating in the Energy Efficiency Fund program. The aim is to channel loans and grants helping nearly 2,000 homeowners’ associations cover the expenses of modernizing their multiple-apartment buildings.
“The Fund is expanding its network of partner banks – we are starting cooperation with one of the largest banking institutions in Ukraine in terms of assets – PrivatBank, which creates particular competition in the market,” said Yuliia Holovatiuk-Ungureanu, CEO of the Energy Efficiency Fund. “We are convinced that such cooperation will increase the number of projects and make the housing sector more energy efficient.”
The majority of the housing stock in Ukraine is comprised of buildings with little or no energy efficiency measures, coupled with an outdated district heat and energy supply system constructed between 1950 and 1985. Though the loan market for homeowner associations in the country has been growing over the last few years, it is not enough to unlock the full potential of energy-efficient modernization of the housing sector, estimated at roughly $50 billion.
Razvan Munteanu, PrivatBank’s Deputy Chairman of the Management Board said: “PrivatBank has extensive experience in promoting social programs. The exceptional reach Privatbank has with all relevant players for this program, and the partnership with IFC and the Energy Efficiency Fund makes me confident that we will soon see a trend of investing in the modernising of properties. This year we plan to finance at least 250 homeowners’ associations’ projects worth half a billion hryvnia.”
The program will help PrivatBank provide loans that complement grants from the Energy Efficiency Fund financed by the state budget and the IFC-managed €100 million Multi-Donor Trust Fund set up in partnership with the EU and Germany.
“Energy efficiency in the residential housing sector offers maximum scope to save energy and reduce cost,” said Jason Pellmar, IFC’s Regional Manager for Ukraine, Belarus, and Moldova. “This new partnership with PrivatBank and our strategic alliance with the EU and Germany will be critical to making this initiative more market-driven and attractive to homeowners.”
In 2019, IFC, in partnership with the EU, supported the launch of the Energy Efficiency Fund to promote modernization of the residential sector in Ukraine.