The International Finance Corporation (IFC), a member of the World Bank Group, signed an agreement with the government of Switzerland on June 19 to facilitate energy efficiency renovations in Ukraine’s residential sector.
The Swiss State Secretariat for Economic Affairs (SECO) will provide up to 1.8 million US dollars to IFC Advisory Services to support legal reforms that will support energy-efficiency refurbishments by engaging with housing management companies on behalf of homeowners’ associations. Ukraine has one of the largest housing stocks in Europe, but many homes are old and inefficient. Poorly insulated buildings lose as much as 50 percent of their heat.
The initiative represents the third and the final phase of IFC’s Residential Energy Efficiency Advisory project in Ukraine, which started in partnership with SECO in 2010. The first two phases of the project achieved remarkable results, including the adoption of legislation that enabled energy efficiency reforms in the housing sector, up to 250 million US dollars in energy efficiency investments for individual households and homeowners’ associations, and the development of banking products for homeowners’ associations for energy efficiency upgrades.
Switzerland’s Head of Economic Cooperation and Development Ambassador Raymund Furrer said: “The project reflects our joint aspiration to create sustainable local markets and to reach scale. It needs a long-term vision. In fact, the work we initiated in 2010 has kick-started a market that did not exist before. This market will also reach scale in CO2 emission reductions. By its end, the project is expected to deliver CO2 emission reductions that correspond to roughly 2 per cent of the total Swiss annual CO2 output”.
“The agreement with Switzerland will be instrumental to our long-standing joint commitment to improving energy efficiency in Ukraine’s residential sector and contributing to the fight against climate change,” said IFC CEO Philippe Le Houérou. “The partnership with SECO is an example of how official development assistance can help create the right enabling environment and leverage private sector resources to deliver climate-smart and energy-efficient solutions.”
The agreement with Switzerland complements the Ukrainian Energy Efficiency Fund (EEF), a new initiative developed by the Ukrainian government, with combined support from the EU and Germany to provide grants to homeowners’ associations for energy efficiency renovations in multi-family buildings.