Businesses can obtain loans for power generation construction at 10% per annum under Sustainability Plans – Economy Ministry

Large and medium-sized businesses will be able to obtain loans for the construction of their own power generation facilities at 10% per annum under the Sustainability Plans, according to the Ministry of Economy, Environment, and Agriculture of Ukraine.

"The state will compensate the difference between the commercial and preferential rates," the ministry’s website states.

According to the Ministry of Economy, the Cabinet of Ministers of Ukraine adopted the corresponding decision on April 29, introducing a pilot project to support businesses in the energy sector.

"The government is launching a mechanism for preferential lending for large energy projects so that companies can build generating capacity and strengthen their energy resilience without additional financial burden," noted Oleksiy Sobolev, Minister of Economy, Environment, and Agriculture of Ukraine.

According to the Ministry, loans will be available for the construction and commissioning of gas turbine and gas piston units, including cogeneration units, renewable energy facilities using biomass, biogas, and geothermal energy, energy storage facilities, and local autonomous power systems.

According to the financing terms, the minimum loan amount is EUR 1 million (EUR 0.5 million for frontline territories) in hryvnia equivalent, and the maximum is up to EUR 25 million. Loans are provided for terms of up to 5 years, with a repayment deferral of up to 12 months until the facility is launched.

Potential loan recipients are also subject to restrictions, including the absence of ties to the aggressor state, the absence of non-resident Ukrainian owners, the absence of sanctions, and the absence of debts to the budget.

The program will begin on June 1 and will be implemented by the National Development Institution (NDI). Applications can be submitted through authorized banks, a list of which will be published on the NDI website.

"Projects will be selected through a competitive process, based on program priorities and within budgetary limits, after evaluation by banks. Applications can be submitted within a year of launch," the Ministry of Economy explained.

The provided loan funds are used directly to pay for the cost of equipment, services of suppliers and contractors, and the state compensates for part of the interest on the loan.

The Ministry recalled that the government has strengthened the energy component of the "Affordable Loans 5-7-9%" program for micro, small, and medium-sized businesses, which is part of the Made in Ukraine manufacturer development policy. Specifically, a 0% annual interest energy loan of up to UAH 10 million for up to three years has been introduced for the purchase of cogeneration units, generators, and other energy equipment. The government has also increased the maximum investment loan for energy needs to UAH 250 million for the construction of new generation facilities by winter.