Oleksii Savin

Resources for the energy transition

The country's energy transition is a common undertaking of the government, society, business and the banking sector in particular. Oleksii Savin, Head of Ecological Projects Department of «Ukrgasbank» JSB, a leader in financing sustainable development and renewable energy projects, tells about Ukrgasbank's participation in the country's energy transition.

Responsibility for the energy transition

5 years of thorough work in eco-banking is an effort to reduce the overall level of greenhouse gas emissions through the implementation of our financed projects. We fund projects aimed at environmental modernization - most of them reduce the use of fossil fuels and, as a result, cut down CO2 emissions.

Three of our priorities are renewable energy, energy efficiency and sustainable development. As an eco-bank, we pay equal attention to all components, because only in this way, as a whole, we can cope with today's challenges more efficiently.

Currently, due to the change in the terms of the «feed-in» tariff in Ukraine, Ukrgasbank has shifted the emphasis to projects of alternative electricity generation for own consumption of enterprises and households in the RES projects. In addition, we have significantly expanded the scope of funding for sustainable development projects. From now on we will also sponsor projects of medicine, utilization, sustainable use of water, etc.

Energy efficiency projects have historically been characterized by a constant amount of funding, as there is no perpetual technology: science, technology, regulatory and environmental constraints are changing, and therefore we need to replace and modernize.

Listing «green» business

Thanks to its own technical expertise and experience, a few years ago Ukrgasbank introduced a detailed analysis of the EPC-contractors' activities and began providing the first in Ukraine open access to the list of reliable contractors who have passed the selection and objective evaluation procedure. Now there are 12 of them. We checked their design capabilities and preparation of documentation, production staff, equipment, and the results of the inspection were published on the bank's website ( So now customers can simply choose a competent and responsible contractor on the site. Moreover, the list turned out to be so popular that the GetMarket investment platform in ranking contractors provides additional points for being on our list. Accredited companies periodically undergo an update procedure to confirm their professionalism and reliability.

Why there is more «sun» in the bank's portfolio

The reason is that in recent years the decrease in the solar panels cost, as well as the simplicity in installation and operation have provided accelerated development of solar energy projects. The favorable «feed-in» tariff in Ukraine at that time also contributed. Secondly, even with the transition to financing RES projects for own production, solar panels are clearer and simpler for the client. For instance, having an office or shop, it is not too difficult to install a small solar station, but it is more difficult, and sometimes impossible, to install a windmill or hydroelectric power plant.

«Greening» of business processes

The consulting support of our partner - IFC - helped us to cope with this task. Together with them, we changed our business processes and added new elements to them: the bank is guided by 8 requirements in the social and environmental spheres for the project implementation. A list of non-credited economic activities was also created.

When evaluating a project, the bank takes into account its size, location and potential environmental and social consequences. For this purpose, our technical office and the Environmental and Social Risks Management System (ESRM) analyze and verify projects for compliance with environmental criteria.

In addition, along with the basic performance indicators of business units, we set indicators for crediting environmental projects.

Ukrgasbank also implements resource-efficient solutions in its offices that help optimize the electricity, water resources and fuel consumption, and implements internal environmental management projects. It is a question of the use of paper made from recycled materials, and the introduction of SMART-lighting control systems based on public sensors installed in public places, and the automated control system of computers and air conditioning systems, the collection of used batteries, sorting solid household waste, etc.

Cases of supported eco-projects

Among those crossing the mind immediately are, for example, financing the reconstruction of the international airport in Zaporizhzhia, construction of a solar station for own consumption in Cherkasy region, financing the purchase of specialized equipment for a Ukrainian hospital in Lviv. In fact, there are hundreds of these projects, and each, even the smallest, is significant for us.

Resources for the energy transition

We have the «Eco-deposit» program, its feature is that the raised funds are allocated by Ukrgasbank exclusively to finance eco-projects. Given the significant interest of the bank's depositors in «green» deposits, we can say that more and more conscious Ukrainians are beginning to care about increasing energy efficiency and preserving the environment. We are convinced that this is a significant and promising step towards building a clean future for future generations.

But now the more important problem is not the search for resources, but their efficient use. Covid-19 has now become a significant stop factor, slowing down the business, focusing on its survival. Therefore, large-scale and expensive eco-projects have become less numerous. However, thanks to the state program of available loans «5-7-9», the number of small projects for modernization, energy efficiency, and substitution of fossil fuels multiplied. After the end of quarantine and in order to return the economy to working condition, we expect a growing interest in the environmental projects implementation.

Additional resources for financing are being developed with the participation of the state, we expect a pilot project of «green» bonds from the State Agency for Energy Efficiency or a program to finance the decarbonization project. We are planning to participate in each of them.

Course for the energy transition

The bank makes plans to continue financing projects that reduce the negative impact on the environment (reduction of emissions of harmful substances, waste management), as well as projects of ecological transport, production of ecologically clean and safe food products.

Ukraine has significant potential for further growth in the «green» direction. IFC estimates that by 2035, the total amount of funding needed to upgrade equipment, resource efficiency, replace vehicles, and upgrade energy will exceed 35 billion euros. Therefore, Ukrainian entrepreneurs need a reliable bank that «understands» this direction and offers favorable loans, i.e. us :).