UKEEP - Energy Efficiency Programme for Banks in Ukraine

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The proposed project is EUR 100 million framework facility under which the EBRD would extend credit lines to Participating Banks (PB) for on-lending to private sector companies for industrial energy efficiency and renewable energy projects. Discussions are currently taking place with potential participating banks. The project will help to overcome market imperfections that hold back the smooth functioning of the energy conservation market in Ukraine. It will have positive demonstration effects particularly with respect to utilising financial intermediaries for investments resulting in rational energy utilisation. The proposed project would result in: i) demonstration of the benefits of rational energy usage ii) building expertise (among the PBs and sub-borrowers) iii) increased financial intermediation targeted at rational energy utilisation which will also improve operating efficiency. The clients will be Ukrainian PBs which will on-lend the funds to sub-borrowers planning to undertake energy efficiency investments and renewable energy projects in the private sector. Senior loans of up to an aggregate of EUR 100 million to be allocated to PBs in Ukraine. EUR 100 million from EBRD. FI screened operation. PBs will require that companies financed through this credit line comply with national requirements for environment, health and safety. This will be confirmed to the PBs by the consultant who will cover this issue as part of the preparation of each project (see Technical co-operation section below for more information). Reporting on sub-projects and annual monitoring reports will be provided by PBs. Increased efficiency in heat generation, reduction of heat transmission losses and improved efficiency in the use of heat and energy will lead to a reduction of air pollutants (e.g., SO2; NOx; CO2; particulates) resulting from heat and electricity generation. This is a clear and quantifiable environmental benefit on which the PBs will provide details in an annual environmental report to the Bank. The Austrian and Swedish Governments will provide funding for technical cooperation essential for the Project. This will include the following components the Project Consultant (“PC”): 1. The first consultant, will: a. provide overall project coordination b. provide initial training to PBs c. proactively work with PBs in reviewing their client base and identify a pipeline of potential projects d. promote the Facility through marketing campaigns e. advise on the eligibility of the sub-projects proposed to be financed under the Facility f. monitor the performance of the Facility and the sub-projects. 2. The second consultant will be the Energy Efficiency Expert ("EEE"), one or more consulting firms that will assist sub-borrowers in the screening and preparation of sustainable energy projects in the industrial sector. The EEEs will work with perspective sub-borrowers to: a. identify individual opportunities through a dedicated energy audit (“EA”) comprising site visits, energy performance assessment, cost-benefit analysis of technically feasible investments b. assess compliance of each proposed project or set of projects with applicable environmental and health and safety laws and standards c. prepare an EA report to support the loan application to PBs. Terry McCallion, Senior Banker, Financial Institutions Team EBRD, One Exchange Square, London EC2A 2JN Tel. +44 (0)20 7338 7478 Fax: +44 (0)20 7338 7380 E-mail: MccalliT@EBRD.com