15:08 11.06.2021

Ukraine loses about 20% of NEFCO investments due to bureaucracy in implementation of energy efficiency projects

2 min read
Ukraine loses about 20% of NEFCO investments due to bureaucracy in implementation of energy efficiency projects

NEFCO (Nordic Environment Finance Corporation) over the past three years canceled energy efficiency projects in 18 Ukrainian cities due to bureaucratic obstacles, which is approximately 20% of the organization's investments, and losses from unrealized projects are estimated at about EUR 35 million, Chief Investment Advisor at NEFCO in Ukraine Yulia Shevchuk said during the 12th European-Ukrainian Energy Day.

"Over the past three years, we have 18 Ukrainian cities with which our energy efficiency projects have been canceled for reasons related to the Ukrainian side," she said during the 12th European-Ukrainian Energy Day.

"The losses amount to about EUR 35 million of investments in the Ukrainian energy efficiency sector," Shevchuk said.

According to her, along with the canceled projects, a significant amount of technical assistance (grants) was also lost or not provided, at the expense of which project preparation was financed, in particular, business plans and feasibility studies.

The expert explained that this assistance is provided to Ukraine by international donors, in particular the governments of Sweden and Norway, as well as the European Union separately.

According to her calculations, the planned level of savings from the implementation of canceled projects was not achieved – this is about UAH 160 million annually from reducing the consumption of energy, water and other natural resources.

Among the reasons for such a number of unrealized projects, Shevchuk named the political inconsistency of local authorities, the lack of qualified personnel at the local level, unwillingness to work according to international procurement procedures, and the lack of qualified contractors to implement energy efficiency projects.

However, she noted that problems also arise from the budget deterioration due to the pandemic. "This is a really powerful factor that will affect the economy of cities in the near future," Shevchuk said.

As reported, the Nordic Environment Finance Corporation has 117 projects in Ukraine for an estimated amount of EUR 180 million, on which agreements have been signed and which are underway.

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