Development and Commercialization of Bioenergy Technologies in the Municipal Sector in Ukraine

Project summary

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The project’s goal is to reduce greenhouse gas emissions in Ukraine by creating favourable legal, regulatory and market environment and building institutional, administrative and technical capacities to promote the utilisation of the country’s extensive agricultural biomass potential for municipal heat and hot water services. The objective of the project is to significantly increase the use of biomass energy as a fuel source for heating and hot water services in the municipal sector in Ukraine by at least 20% over the baseline scenario in order to reduce direct greenhouse gas emissions by 63,577 tons of CO2 over the 4-year life of the project and, subsequently, 19,143 tons of CO2 during each year of the remaining 16-year life of the boiler equipment.

Project goals

  1. Creating attractive and competitive business terms and conditions for investors, such as initial support in the preparation of feasibility studies and in terms of an investment grant, which will give developers long-term stability and provide for sufficient investment return;
  2. Streamlining and simplifying the administrative procedures for developers of projects utilising agricultural biomass for heat and hot water services and assisting the Ministry of Agrarian Policy and Food to promote the market for municipal biomass through the establishment of a Biomass Support Unit;
  3. Developing capacity within the financial institutions to appraise municipal biomass projects for incorporation into its lending operations, including establishment of a dedicated line of credit at concessionary rates;
  4. Facilitating implementation of initial municipal biomass projects by assisting to put in place a fair and transparent project selection process, supporting subsequent negotiation and signature of licensing agreements and providing technical support and oversight throughout the construction process.

Expected Results



  • Streamlined and comprehensive market-oriented policy and legal/regulatory framework to promote municipal biomass for heat and hot water services are adopted.
  • Municipal Targets for Biomass Energy in heating (for at least 6 Oblasts including Ivano-Frankivsk and Cherkasy) are agreed and adopted.
  • National Targets for Biomass Energy in heating until 2020 are agreed and adopted.
  • A sustainable Biomass Support Unit (BSU) established within MAPF to support the municipal biomass programme during the project lifetime and beyond.
  • Financial Support Mechanism (FSM) established within financial institutions of MAPF and continues to operate beyond project lifetime.
  • Completion of a total of 18 municipal biomass heat and hot water systems by project end.
  • Outreach programme and dissemination of project experience/best practices/lessons learned for replication throughout the country.

Donor

Global Environment Facility USD 4,700,000

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