Accelerating Renewable Energy Investments in Ukraine

Strategic Insights -

The European Bank for Reconstruction and Development (EBRD) is launching a crucial mechanism to boost renewable energy investments in Ukraine, addressing the country's urgent need for new generation capacity following devastating Russian attacks on its power sector. The Ukraine Renewable Energy Risk Mitigation Mechanism (URMM) will support 1 GW of new renewable energy capacity, potentially mobilizing EUR1.5 billion in investments, and has already secured EUR180 million from the European Union under its Ukraine Investment Framework (UIF). Key partners, including the International Finance Corporation (IFC) and the World Bank, will collaborate with the EBRD to structure and channel donor funds to the mechanism.

Key Takeaways:

  • The Ukraine Renewable Energy Risk Mitigation Mechanism (URMM) will support 1 GW of new renewable energy capacity in Ukraine, potentially mobilizing EUR1.5 billion in investments.
  • The mechanism will be open to all financial institutions to lend to selected projects, with participating projects selected via auctions.
  • The European Union has approved EUR180 million to support the URMM under its Ukraine Investment Framework (UIF).
  • Germany, Norway, Sweden, and Switzerland are considering supporting the initiative.
  • The URMM incentivizes investments in renewable energy by stabilising revenues for developers, addressing the risk of price volatility that has held back investment in Ukraine.
  • Targeted technical assistance will be provided to the Ukrainian government to set up an effective national support scheme to enable investments in new renewable energy generation capacity.
  • The EBRD has significant experience in supporting competitive bidding processes, having already supported 17 auctions in 9 countries for a total capacity of more than 8 GW under its Renewable Energy Market Accelerator.
  • The URMM aligns with the European Commission's February statement on reform acceleration, especially in the energy sector, and EU accession-related reforms.
  • The EU UIF funding for the URMM is part of new programmes to be implemented by the EBRD to support Ukraine's economic recovery.

Statistics:

  • EUR180 million approved by the European Union to support the URMM under its Ukraine Investment Framework (UIF).
  • EUR12 million in grants expected from The Netherlands.
  • EUR4 billion capital increase approved by the EBRD's Board of Governors to enable it to continue making around EUR1.5 billion a year available to Ukraine in wartime.
  • EUR7.2 billion deployed by the EBRD in Ukraine since February 22.
  • Over EUR8 GW of renewable energy capacity supported through 17 auctions in 9 countries under the EBRD's Renewable Energy Market Accelerator.

Sources:

  • EBRD Press Release
  • European Commission statement on reform acceleration
  • International Finance Corporation (IFC)
  • World Bank
  • European Ukrainian Energy Agency (EUEA)
  • Ukrainian Wind Energy Agency (UWEA)
  • Green Deal Ukraina
  • Ukraine Donor Platform's Business Advisory Council