General Information
Program Description
One of Ukraine's main priorities is to ensure energy security and sustainable development, including the development of renewable energy, including the procurement and installation of integrated decentralized renewable energy systems, the modernization of energy infrastructure and other critical infrastructure, the restoration of damaged public buildings with the introduction of energy-efficient technologies.
The goal of restoration and reconstruction is to create a decarbonized, energy-efficient, environmentally sustainable and socially oriented infrastructure that will improve living conditions for the population, reduce the country's energy dependence, stimulate local economic development and achieve sustainable development goals. This includes the introduction of modern technologies aimed at reducing energy consumption, adapting to climate change and integrating renewable energy sources.
The goal of recovery and reconstruction is to create a decarbonized, energy-efficient, environmentally sustainable and socially oriented infrastructure that will improve living conditions for the population, reduce the country's energy dependence, stimulate local economic development and achieve sustainable development goals. This includes the introduction of modern technologies aimed at reducing energy consumption, adapting to climate change and integrating renewable energy sources.
The implementation of this Program, with the support of the European Investment Bank, corresponds to the implementation of national strategic documents:
1) Association Agreement between Ukraine and the EU: Directive of the European Parliament and of the Council (EU) 2018/2001 "On the promotion of the use of energy from renewable sources";
2) Presidential Decree No. 722/2019 of September 30, 2019 "On the Sustainable Development Goals of Ukraine for the period up to 2030", namely: p. 7) ensuring access to affordable, reliable, sustainable and modern energy sources for all; p. 11) ensuring openness, security, viability and environmental sustainability of cities and other settlements; p.13) taking urgent measures to combat climate change and its consequences.
3) National Energy and Climate Plan for the period up to 2030.
4) National Renewable Energy Action Plan up to 2030.
5) National Energy Efficiency Action Plan up to 2030.
This Program aims to achieve key results in improving the comprehensive energy efficiency of public buildings through the implementation of energy-efficient renovation measures and the use of renewable energy solutions.
The proposed program consists of two components:
- Procurement of equipment and installation services.
- Strengthening the capacity of local governments to prepare and implement renewable energy subprojects, including the development of a PCD. Procurement of equipment and installation services.
Component 1 - provides for financing the installation of renewable energy generation facilities from the following possible elements:
- installation of photovoltaic systems without batteries: suitable roofs, parking lots or integrated facades for the installation of photovoltaic panels;
- installation of photovoltaic systems with batteries: suitable roofs, parking lots or integrated facades for the installation of photovoltaic panels;
- installation of solar thermal systems (solar systems);
- installation of geothermal heat pumps;
- installation of air-to-water heat pumps.
In general, within the framework of the component, it is planned to install sets of energy generation equipment from renewable sources at approximately 50 facilities.
The implementation of the component will ensure a sustainable energy supply to social infrastructure facilities (security and education institutions), which in turn will allow for stable access to educational and medical services for more than 10 thousand people.
Strengthening the capacity of local governments to prepare and implement renewable energy subprojects, including the development of a PCD.
Component 2 - provides for financing work to strengthen the capacity of local governments to prepare and implement renewable energy subprojects, including the development of a PCD. The component will include procurement of equipment, design, construction, installation and commissioning work.
Expected results of the investment project
In general, the implementation of the Program will make a significant contribution to the recovery and development of the country's economy, its energy and environmental security, will contribute to the rapid European integration of Ukraine, will reduce the negative impact on health care caused by significant destruction in the industry, and will also facilitate the return of people to the liberated, restored regions of Ukraine.
The following measures will be implemented within the framework of the Program:
- development of design and estimate documentation (DED);
- procurement of equipment and installation services;
- monitoring and sanctions screening. The Programme is aligned with the UNDP Ukraine Recovery Framework and will contribute to the achievement of Ukraine’s Sustainable Development Goals for the period up to 2030 in terms of:
- providing access to affordable, reliable, sustainable and modern energy for all;
- creating resilient infrastructure, promoting inclusive and sustainable industrialization and innovation;
- taking urgent measures to combat climate change and its impacts by reducing greenhouse gas emissions.
The indicators for assessing the results of the Programme will be determined after the results of the EIB’s identification of the list of facilities, their approval and assessment, but in general, based on analytical data, taking into account the total cost of the Programme, it is possible to predict the impact on the following indicators:
- the share of the population that will receive sustainable and reliable access to educational and health services for more than 10 thousand people;
- the average annual savings on energy costs is more than 80 million UAH per year;
- the average emission reduction is more than 10 thousand tons of CO2 per year;
The program will contribute to the sustainable development of communities, reducing Ukraine's energy dependence, adapting to climate change and integrating renewable energy sources into local energy systems. It will also contribute to improving the quality of social services, improving living conditions for internally displaced persons, creating new jobs and stimulating local economic development.
The program will have both social and economic and environmental results, namely: it is expected to increase the energy efficiency of social infrastructure facilities, such as hospitals, schools and kindergartens, reduce their maintenance costs, reduce greenhouse gas emissions, and extend their service life.
Strategic Case
Program Goal
Strategic Relevance of the Program
Program Objectives
Programme Sustainable Development Goals
Economic Case
Economic feasibility of the program
What are the main benefits expected from the implementation of the program for the economy, business, society, or individual industries?
Does the program objective provide for a contribution to the climate goal of mitigating the effects of climate change?
Does the program objective provide a contribution to the climate change adaptation objective: reducing the impact and/or reducing the vulnerability of an asset or population to one or more types of physical climate hazards?
Does the programme objective provide for a contribution to the climate objective of sustainable use and protection of water and marine resources?
Does the program objective provide for a contribution to the climate goal of transitioning to a circular economy?
Does the programme objective provide for a contribution to the climate objective of pollution prevention and control?
Does the program objective provide for a contribution to the climate goal of protecting and restoring biodiversity and ecosystems?
What social consequences are relevant for your program, after its implementation?
Why is it advisable to implement projects in the format of one comprehensive program, and not separately?
How will the program help strengthen other economic processes or reforms?
Program Components
Component ID
DREAM-DREAM-1
Purchasing agent services
Justification
Strengthening the capacity of local governments to prepare and implement renewable energy subprojects, including the development of the PCD. The component provides for financing work to strengthen the capacity of local governments to prepare and implement renewable energy subprojects, including the development of the PCD. It is planned that an Implementing Agent acceptable to the bank will be involved for the implementation of this component, in accordance with the financial agreement. It is proposed to involve the United Nations Development Program. UNDP within the framework of the component will procure equipment, provide design, carry out construction, installation and commissioning works. Due to the low institutional capacity of local governments, which arose due to military aggression, which caused the outflow of certain specialists, the involvement of UNDP is necessary for the proper and transparent implementation of the Program with EIB grant funds. Successful implementation of the current grant resource will allow attracting additional grant funds.
Year
Amount
1
22'350'000 UAH
2
22'600'000 UAH
3
22'800'000 UAH
Component ID
DREAM-DREAM-2
Purchase of equipment and installation services.
Justification
Provides for financing the installation of renewable energy generation facilities from the following possible elements: - installation of photovoltaic systems without batteries: suitable roofs, parking lots or integrated facades for the installation of photovoltaic panels; - installation of photovoltaic systems with batteries: suitable roofs, parking lots or integrated facades for the installation of photovoltaic panels; - installation of solar thermal systems (solar systems); - installation of geothermal heat pumps; - installation of air-to-water heat pumps. In general, the component plans to install renewable energy generation equipment sets at 50 facilities. The implementation of the component will ensure sustainable energy supply to social infrastructure facilities (healthcare and education institutions), which in turn will allow for stable access to educational and medical services for more than 25 thousand people.
Year
Amount
1
224'430'000 UAH
2
383'000'000 UAH
3
80'448'000 UAH
Financial justification
Total estimated program cost
755'628'000 UAH
Estimated cost of program components
755'628'000 UAH
Component
Amount
Purchasing agent services
67'750'000 UAH
Purchase of equipment and installation services.
687'878'000 UAH
Cost justification
Short description
Justification document
Sources and mechanisms of financial support for the implementation of programs.
Status
Funding mechanisms
Coverage, %
Investment
Non-repayable financing. Grant financing. International (intergovernmental) grant agreement (with a predefined approach for selecting contractors or suppliers).
100%
Justification document
What potential funding sources can be mobilized on the basis of prior agreements or intentions to cooperate (if any)
The source of funding for the Renewable Energy Solutions (RES) program is grant funds from the European Investment Bank (EIB).
Management Case
Total program duration (months): 3
Approaches to project selection
Have approaches and criteria been defined for including public investment projects in the program, initiators of such projects, and their prioritization?
Organizational Measures
Photovoltaic systems with rechargeable batteries have been installed in 27 public buildings
12 months
Photovoltaic systems with rechargeable batteries have been installed in 7 public buildings
12 months
Photovoltaic systems with rechargeable batteries have been installed in 16 public buildings
12 months
Risk Assessment
Risk
Probability
Degree
Strategy
Risk
Failure to comply with integrity requirements. Violation of prohibitions against fraud, corruption, money laundering or other prohibited practices by any program participant.
Probability
Low
Degree
Critical
Strategy
Avoidance
Risk
Low institutional capacity of final beneficiaries. Insufficient experience and qualifications of local government staff to prepare documentation and fulfill the requirements of the international agreement.
Probability
Medium
Degree
Considerable
Strategy
Reduction
Risk
Violation of sanctions restrictions. Unintentionally involving contractors associated with individuals or entities subject to international sanctions in the program.
Probability
Low
Degree
Critical
Strategy
Avoidance
Risk
Limited number of contractors. Insufficient number of qualified contractors in the market.
Probability
High
Degree
Critical
Strategy
Acceptance
Risk
Delay in approval of project documentation. Delays in obtaining approvals from authorities and regulators can delay implementation times.
Probability
Medium
Degree
Considerable
Strategy
Reduction
Risk
Lack of funds for co-financing from beneficiaries. The high cost of the works may require additional funds, which may not be available in local budgets.
Probability
Medium
Degree
Considerable
Strategy
Avoidance
Risk
Insufficient staff qualifications. Low qualifications of staff to maintain new equipment.
Probability
Medium
Degree
Considerable
Strategy
Reduction
Risk
Exchange rate fluctuations when purchasing imported equipment. Increase in the cost of equipment due to the devaluation of the hryvnia.
Probability
Low
Degree
Considerable
Strategy
Avoidance
Risk
Disruptions in equipment supply. Logistical problems caused by hostilities or closure of transport routes.
Probability
Medium
Degree
Considerable
Strategy
Reduction
Risk
Risks associated with war. The threat of hostilities that could damage facilities or disrupt logistics chains.
Probability
Low
Degree
Considerable
Strategy
Reduction
Risk
Regulatory Policy Change: A change in policy regarding tariffs or equipment imports that may affect the cost-effectiveness of the program.
Probability
Medium
Degree
Considerable
Strategy
Reduction
Risk
Non-compliance of equipment with technical requirements. Non-compliance of supplied equipment with stated requirements may lead to malfunctions.
Probability
Medium
Degree
Critical
Strategy
Reduction
Risk
Increase in the cost of construction and installation works. Increase in prices for materials and services during the implementation of the program.
Probability
Medium
Degree
Considerable
Strategy
Reduction
Risk
Disruption of tender procedures. Absence of participants or appeal of tender results.
Probability
Medium
Degree
Considerable
Strategy
Reduction
Risk
Decreased trust in the program. Loss of trust due to delays in program implementation.
Probability
Low
Degree
Considerable
Strategy
Reduction
Risk
Untimely transfer of funds from donors. Delays in payments from donors can halt the implementation of projects.
Probability
Medium
Degree
Considerable
Strategy
Reduction