In 2016, when Ukraine signed and ratified the Paris Agreement on fighting climate change, Ukrgasbank took the lead of the “green trend” and became the first specialized Ecobank within the territory of Central and Eastern Europe.
The financial institution set up green-banking course development as a primary focus and started supporting vitally necessary environmental and energy-saving projects in Ukraine, which inherited an excessively cost-intensive power industry from the Soviet Union. That industry is based on burning fossil fuels, which is one of the main sources of greenhouse gases.
Ukraine is on the global list of 20 countries with the highest absolute man-made greenhouse gas emissions and on the list of 10 countries with the highest level of energy absorption capacity and carbon capacity of gross domestic product.
That same year the bank enlisted the support of a worldwide expert: the International Finance Corporation (IFC). Partnership with IFC opened Ukrgasbank’s access to unique expertise, which allow us to evaluate the expected outcomes of projects in the phase of prior review and adjust them to achieve the best possible indexes of expenditure cover and power consumption economy.
Just like the other banks in the Green Bank Network, Ukrgasbank works in three areas. The first one is financing renewable energy: solar power, hydro energy, wind energy, etc. The second one is financing energy-saving technologies, the third area is financing projects associated with environmental protection.
As early as 2017, Ukrgasbank became the absolute leader in “green” financing in Ukraine. In 2018, the dynamics of the Ukrainian renewable energy sector came to public attention. In the span of a year, 813 megawatts of new power capacity were established. This generates power from renewable sources. It is almost three times more than the power capacities introduced in 2017, more specifically almost 300 megawatts more.
According to the data of the National Energy and Utilities Regulatory Commission, almost 55% of the new power capacities from renewable energy sources introduced in 2018 were financed entirely by Ukrgasbank. In general, a quarter of all the power capacities active in the renewable energy sector of Ukraine were financed or refinanced by Ukrgasbank.
Since the beginning of collaboration with IFC, the bank has already financed 150 large project of “green” energy. Among them there are 109 solar power plants, 7 wind power plants, 18 small hydro plants and 16 biomass power plants. All these projects provided a reduction of CO2 emissions of 1,215 thousands of tons annually and saved 757 million cubic meters of natural gas a year.
The main achievement of the bank in the context of social implication is financing the first solar power plant on the territory of the nuclear power plant in Chornobyl. Of course, the country’s leading Eсоbank could not remain uninvolved in issues of environmental safety that are important for the state – “green” investments in the right-of-way area to build plants that will generate ecologically friendly electric energy.
This is because, in the bank, everyone is convinced that the Chornobyl zone should finally provide a benefit to Ukrainians as the potential for producing solar power in the right-of-way area is higher than in the majority of places in Europe situated on the same latitude. The new plant already generates ecologically friendly power at a feed-in tariff.
In general, the modernization of the energy industry and the transition to renewable energy sources is not just a contribution to saving the world. For Ukraine, it is not only an investment attractiveness improvement issue — first of all, it is a national security issue, a certain chance to achieve the true energy independence. Ukraine’s transition into renewable energy sources is a national issue, and the state-owned Ukrgasbank carries on its solution professionally.
Ukrgasbank has already proven itself in the Ukrainian market as the leading ecobank that cares about the environment by financing projects on energy efficiency and energy saving. It impresses with new achievements in dealing with small and medium businesses.
Despite the fact that it is a relatively new sphere for the bank’s activity, it has already achieved good results and became a serious competitor even for representatives of global financial groups that are present on the Ukrainian market.
During the last year the amount of lending received by representatives of small and medium-sized enterprises (SMEs) at Ukrgasbank has more than doubled — up to UAH 5 billion or EUR 160 million. This is a serious achievement for a beginner. Ukrgasbank continues to strengthen its support for Ukrainian businesses by offering new loyalty programs. The ECO-BOOM program is one of the newest and perhaps the most interesting for entrepreneurs.
The new initiative has been developed specifically for representatives of Ukrainian SMEs, who want not only to earn, but also to save significantly. Bankers will help entrepreneurs to understand the needs of their business and develop an individual development plan. ECO-BOOM is the future of Ukrainian business, allowing entrepreneurs to have easy access to modern banking products and services, as well as unique programs and financial decisions that can bring the business to a qualitatively new level.
The program provides various sets of financial instruments for different business areas. Entrepreneurs and small companies, businessmen engaged in renewable energy, farmers, commodity producers and trade enterprises will be able to find modern programs suitable for their activity.
Bankers are convinced that the lack of communication and knowledge is the biggest problem for SMEs in Ukraine today. Potential clients are in high need of funding, but often simply not aware of the opportunities existing on the market. For example, 90% of SMEs in the agricultural sector do not understand that it is possible and necessary to build effective and transparent relations with the bank. Likewise, entrepreneurs are often not aware of numerous interesting products and international programs, which can finance equipment modernization and make production more sustainable.
These processes require help from specialists, and the ECO-BOOM program is designed specifically for this purpose. Often, businesses think not only about increased output and entering new markets, but about the need to make production more efficient and less costly. ECO-BOOM offers programs that can benefit from economies of scale.
The bank has a staff of experts that can analyze the entire production process of the client. If the company wants to improve its efficiency through modernization, the bankers will make recommendations on how to do it better, as well as recommend partners who have successful experience in implementing such projects. For example, sometimes specialists recommend a more comprehensive energy modernization, increasing the cost of the corresponding program of modernization, resulting in a faster payback by the project. As a result, the clients are satisfied: They experience significant savings, which enables them to repay loans and increase their profits.
Apart from that, Ukrgasbank was the first in Ukraine to offer loans for energy-efficient renovation for associations of co-owners of multi-apartment buildings and has been the leader and trendsetter in this market segment ever since, Nowadays, energy-saving technologies in Ukraine are in demand and banks actively help such projects to be implemented. Municipal housing and utility systems are the places where the most economic effect from energy saving is seen. On average, the efficiency of the plant increases by 10-30%, and costs are reduced by 20-50%. Such projects recoup their value in approximately six months to two years.
