A project for improving the energy efficiency of Ukrainian district heating companies.


Ukraine has showed strong economic growth over the past two decades, with an annual increase in GDP averaging 7.5 percent between 2001 and 2008. However, the global financial crisis of 2008 revealed that the country had a number of economic, structural and policy weaknesses that needed to be addressed to ensure sustainable future growth.

While widespread fiscal and structural reform will be needed to create lasting change in Ukraine, targeted actions can also fast-track improvements in certain sectors. For example, Ukraine is noted for having one of the top ten energy-intensive economies in the world. Ukraine’s energy intensity is more than three times the EU average. Within the energy sector, district heating (DH) has been identified as Ukraine’s third largest greenhouse gas (GHG) emitter, and suffers from lack of funding, low efficiency and poor quality of service. Improvement of this sector will increase Ukraine’s energy efficiency and lead to greater energy security.

Objectives and Outputs:

This project will improve the energy efficiency and quality of service of selected Ukrainian DH companies, which will lead to improved financial viability and decreased GHG emissions. Specifically, GHG emissions will be reduced through improving heat generation efficiency and reducing residential heat consumption. The project is a partnership between the Government of Ukraine, the World Bank, and CIF. In 2014, CIF invested $51.1 million in CTF funding for this project, which will take place over a five-year timeline. The project is fully aligned with the Government of Ukraine’s objective of reducing energy intensity by 50 percent by 2030. 

Two components are associated with successful completion of the project: investments for energy efficiency, and technical assistance and capacity building. The investment component will increase the efficiency of participating utilities through reducing their costs, enhancing the reliability of their services, and improving the quality of heat supply. This component also includes a number of building and transmission infrastructure improvements.

The technical assistance and capacity building component will provide financial assistance to the Ministry of Regional Development, Construction, Housing and Communal Services, which will oversee project implementation. This component will finance supervision of the project, as well as guidance and training of participating companies.

Successful project completion will result in electricity savings of approximately 560 GWh annually. Additionally, improvement of the DH sector’s efficiency will result in emissions reductions of nearly 330,000 tCO2/yr.

While the DH companies selected for participation in this project are the primary beneficiaries, improved energy efficiency at a large scale will provide indirect benefits for residential consumers, who will receive more reliable service that is of higher quality. Additionally, energy efficiency improvements will serve as a form of climate change mitigation through decreased GHG emissions.

This project summary is drawn from draft project proposals [such as the PAD, PID, SAR, and country investment plan] and may not contain the most up-to-date information.

IBRD Project Portal

Project Details
Cover Note | Project Document | External Review | Response to External Review | Proposed Decision
Approved on January 28, 2014 (Approved Decision)
Approved amount(s):
USD 50.0 million

Project Preparation Grant
PPG Proposal | Proposed Decision
Approved on October 19, 2011 (Approved Decision)
Approved amount(s):
USD 1.0 million (PPG)
USD 50,000 (MPIS)

Comments and Responses:
Germany (October 19, 2011)