Case Studies > Improving district heating in Ukraine
Improving district heating in Ukraine
District heating systems in Ukraine account for 20 per cent of the country’s total CO2 emissions and consume almost 44 per cent of its resources for heat energy. The EBRD, the Eastern Europe Energy Efficiency and Environment Partnership (E5P) and the Clean Technology Fund (CTF) are providing resources to help modernise the country’s heating systems. These investments aim to increase energy and cost efficiencies, improve financial sustainability and support the regulatory reform of municipal utilities.
The latest of these projects will be implemented in the western municipality of Lutsk. The EBRD is set to provide a loan of up to €7 million, which will be supported by a €3 million loan from the CTF and an investment grant of €4 million from the E5P.
The project will finance a priority investment programme, which aims to reduce operating costs and increase the quality of services to consumers. The programme will also reduce gas consumption by at least 30 per cent, contribute to annual water savings of 13,400 m3 and generate GHG savings of nearly 30,000 tCO2e per year. In addition to operational improvements, the project aims to bill residents only for the heat they actually use through metering (moving away from normative consumption calculations), which is expected to incentivise residents to make energy-saving investments. Lastly, the operation helps to leverage policy dialogue with the Ukrainian government to promote systemic regulatory and institutional reforms in the utility sector.