A project for rehabilitation and modernization of district heating facilities across Ukraine.


In 2005, Ukraine was responsible for nearly 495 million metric tons of carbon dioxide equivalent (MtCO2e), making it the 18th largest greenhouse gas (GHG) emitter in the world that year. Ukraine remains one of the most energy intensive economies in Eastern Europe, due to dependence on oil and gas, as well as inefficiencies in use of these fuels.

More recently, Ukraine’s energy consumption has decreased, but this is partly a result of the global financial crisis of 2008. However, the energy sector remains responsible for the bulk of Ukraine’s GHG emissions. The Government of Ukraine has committed to a 50 percent reduction in energy intensity by 2030, yet fossil fuel-fired energy generation is expected to increase over the same period by as much as 30%. As a result, alternative measures, such as increasing energy efficiency by sector, are being undertaken by Ukraine’s government.

Objectives and Outputs:

This project will focus on the direct heating (DH) sector in Ukraine, which is currently a major consumer of natural gas. By improving the energy efficiency of the DH sector, natural gas consumption will be decreased, leading to a significant reduction of GHG emissions.  Through investment, technical assistance and policy dialogue, this project will support the transition of the DH sector towards energy and cost efficiency, as well as sustainability. The project was undertaken through a partnership between the Government of Ukraine, EBRD, and CIF. In 2014, CIF invested $50 million of CTF funding for this project, which is expected to take place over five years.

The investment component will take the form of a number of sub-projects, which will together promote energy efficiency and sustainable development of the DH sector in relevant municipalities and regions. Technical assistance will be given to each sub-project, as well as to the government agencies responsible for oversight of DH companies. Together, the investment and technical assistance components will lead to regulatory reform at the national level. This will be supported by an ongoing policy dialogue between EBRD, the government of Ukraine, relevant regulatory agencies, and other stakeholders, ensuring that any proposed reforms are comprehensive in nature.

Successful completion of this project will have three results. First, GHG emissions will be reduced by approximately 0.35 MtCO2e annually. Second, 350 GWh of energy will be saved on an annual basis. Finally, renewable heating systems with a capacity of 30 MWth will be installed. While the direct beneficiaries of this project will be targeted companies in the DH sector, indirect benefits will be provided to all DH consumers through better market conditions associated with improved efficiency. Additionally, indirect benefits will be provided through GHG emissions reductions, which will mitigate climate change impacts.

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.

Project Details
Cover Note | Project Documents: Zaporizhzhia | Ternopil | L'viv | Donetsk | Luhansk | Expert Review | Proposed Decision
Approved on April 30, 2014 (Approved Decision)
Approved amount(s):
USD 49.25 million (concessional loan)
USD 133,000 (grant funding)
USD 617,000 (MPIS)

Revised Documents
Cover Note | Project Document (Revised) | Proposed Decision
Approved October 6, 2015