Kyiv, Ukraine, April 19, 2021—A three-way partnership will help boost green finance for the residential multi-family housing sector in Ukraine as IFC, a member of the World Bank Group, Ukraine's Energy Efficiency Fund, and Oschadbank, the country's second-largest bank, agree to jointly support the nation's efforts to modernize its residential housing stock and reduce greenhouse-gas emissions.
IFC, in partnership with the European Union (EU) and Germany, will work with state-owned Oschadbank to help homeowners' associations apply for grants from the Energy Efficiency Fund and develop financial products that will allow more Ukrainians to upgrade their properties and make them more energy efficient.
According to IFC research, over the next decade, green buildings represent a significant low-carbon investment opportunity in emerging markets—$24.7 trillion by 2030. The energy efficiency loan market for homeowners' associations in Ukraine has been growing over the last few years. However, more resources are necessary to expand access to finance for renovations in the housing sector. Against this backdrop, the Energy Efficiency Fund will serve as a major incentive for homeowners.
Yulia Holovatiuk-Ungureanu, CEO of the Energy Efficiency Fund, said, "I am confident that this partnership will revive the energy efficiency sector and encourage more people to implement energy efficiency projects in their homes."
Oschadbank has the highest number of branches in Ukraine, with nearly 2,000 offices serving more than seven million customers. In addition, with three partner banks already involved in the Energy Efficiency Fund program —Ukrgasbank, Kredobank, and PrivatBank — Ukrainians will be able to apply for financing in every second bank branch across the country.
"For six successful years, Oschadbank has been serving homeowners' associations and helping them with the state-backed "warm loans" program," said Olga Baitsar, a Member of the Management Board of Oschadbank, in charge of micro, small and medium business. "In 2021, together with the Energy Efficiency Fund, we are offering a new tool for energy-efficient modernization of multi-family buildings. With the new financial product, more homeowners can join the program, have access to comfortable housing, and save on utility bills."
IFC's advisory program will help Oschadbank 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.
"At a time when Ukraine is being adversely impacted by COVID-19, it is vital for the country to embrace sustainable development to build future resilience," said Jason Pellmar, IFC's Regional Manager for Ukraine, Belarus, and Moldova. "Meeting the demand for green buildings by expanding financial solutions for energy modernization can spur low-carbon economic growth and create jobs in Ukraine."
In 2019, IFC, in partnership with the EU, helped establish the Ukraine Energy Efficiency Fund. Since the project's inception, the Fund has received nearly 600 applications for energy efficiency renovations with an estimated value of $165 million. The Fund is expected to commit grants of over $111 million to support investments in these energy efficiency projects to help over 51 thousand families save on their utility costs, with half of the grant value supported by the Multi-Donor Trust Fund.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2020, we invested $22 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org.
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About the Energy Efficiency Fund
The Energy Efficiency Fund is a Ukrainian state institution that provides grants to homeowners' associations for energy-efficiency renovations in multi-family buildings using the latest European thermal modernization practices. It aims to reduce CO2 emissions to fulfill the Paris Agreement, implement acquis communautaire of the European Union and the treaty establishing the Energy Community, and ensure Ukraine's compliance with its international obligations in energy efficiency. The Fund's activities are funded by the State Budget of Ukraine and supported by the EU and German government. Visit www.eefund.org.ua to learn more.
About Oschadbank
Established in 1991, Oschadbank is a leader of the country's commercial banking market. The State, represented by the Cabinet of Ministers of Ukraine, is the sole shareholder of the bank. For more information, please visit: www.oschadbank.ua/
For more information about European Union, please visit: ec.europa.eu/neighbourhood-enlargement/about/directorate-general_en.
For more information about the German Ministry of Economic Cooperation and Development, please visit: www.bmz.de/en
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