19:55 05.12.2023

German govt, EIB to provide Ukraine with EUR 20 mln grant to support energy transition

3 min read
German govt, EIB to provide Ukraine with EUR 20 mln grant to support energy transition

The German Federal Ministry of Economic Affairs and Climate Protection (BMWK), the European Investment Bank (EIB) and the Ministry of Restoration of Ukraine have agreed to sign a grant worth EUR 20 million for the Renewable Energy Solution Programme (RES).

The grant, announced during COP28, is being provided by the International Climate Initiative (IKI) to EIB Global's IKI Fund, created in partnership with the German government to promote green investments, the bank's website said on Tuesday.

"With this contribution, the government of Germany intends to support the transition of energy systems and green reconstruction in line with the goals of the Paris Agreement and Ukraine's path towards the European Union. It will be another important building block in longstanding German-Ukrainian cooperation in the International Climate Initiative (IKI) and the German-Ukrainian Energy Partnership," the release notes.

It is noted that the grant will promote the introduction of renewable energy technologies in Ukrainian municipalities (schools, hospitals, kindergartens) and increase the energy independence of public institutions, in particular through the integration of solar energy systems, the use of biomass, geothermal heat pumps, and the installation of batteries.

This initiative will support another EIB framework loans, such as the Ukraine Public Building Energy Efficiency (UPBEE) Programme (a EUR 300 million EIB framework loan for thermal renovations in Ukrainian communities), and two recovery programmes - the Ukraine Early Recovery Programme (UERP) and Ukraine Recovery Programme (URP) - worth a total of EUR 540 million and targeting territories recently liberated in Ukraine. In addition, plans are in place for the RES Programme to support similar EIB framework loans in the future.

It is also indicated that the German Society for International Cooperation (GIZ) will provide technical assistance and advisory services necessary for the successful implementation of the program.

EIB President Werner Hoyer said: "In our role as the EU climate bank, we see the Renewable Energy Solutions Programme as an important step for the reconstruction of Ukraine. This initiative, supported by the German government, ensures that essential public buildings are both energy-efficient and equipped with renewable energy solutions, fostering Ukraine's resilience and energy security."

Robert Habeck, Federal Minister for Economic Affairs and Climate Action (BMWK) said that with this contribution from the International Climate Initiative (IKI), they are supporting Ukraine's efforts to promote decentralised renewable energy solutions, the decarbonisation of the energy system and, the reconstruction of Ukrainian energy infrastructure due to the ongoing Russian aggression.

"I truly believe that the transformation to climate neutrality can be engrained in all reconstruction efforts and I admire Ukraine's resilience and determination to climate and energy transition in the face of the military threats," he said.

Deputy Prime Minister for Restoration of Ukraine and Minister for Communities, Territories, and Infrastructure Development Oleksandr Kubrakov said: "The focus of this cooperation is clear: together with our EU partners we want to boost Ukraine's resilience, rebuild the country, support communities and cities in a more sustainable and greener way than ever before."

The release notes that last year Germany supported Ukraine in the energy sector for more than EUR 200 million, and IKI is now financing 16 projects in Ukraine with a total approved budget of EUR 293 million.

Since the start of Russia's full-scale military intervention in Ukraine in 2022, the EIB has provided EUR 1.7 billion in immediate assistance to Ukraine to urgently repair the country's infrastructure destroyed by Russian bombing. The EU Bank also provided a credit line of EUR 4 billion to support the integration of refugees from Ukraine in EU countries.