Investment Opportunities ofRenewable Energy in Ukraine

State Agency on Energy Efficiency and Energy Saving of Ukraine

ENERGY EFFICIENCY AND RENEWABLE ENERGY SECTORAL POLICIES

2

Households Industry State and local programs of

co-financing of energy efficiency

Households stimulation on installation of wind and solar plants

Energy labelling systems Full metering of energy

consumption Stimulation of recipients of

subsidies to save energy

Services, Public Entities and Agriculture

Transport andNon-energy use

Energy Performance Contracts

The mechanism of energy management

Stimulation through energy tax

Energy Performance Contracts

Stimulation of liquid biofuels production

Extension of electric vehicles usage

33% 32% 8% 17% 10%

0.09 0.08 0.090.1 0.11 0.1 0.1

0.15 0.16

0.29

Germany Romania Lithuania Croatia Hungary SlovakRepublic

Poland Bulgaria Belarus Ukraine

Energy intensity in European countries (IEA, 2016)

Reduction of natural gas consumption2014 - 2017*

New biomass heat generation facilities2014 – 2017**

*According to "Naftogaz Ukraine“ (Excluding Crimea, Luhansk and Donetsk regions).**According to regional state administrations.

2 GWMore than 460 mln EUR investments attracted

bln м3

More than 1,2 bln EURO

saved

1511

9

8.4

6.6

4

0.66

0.50

0.3

0

5

10

15

20

25

30

2014 2017 2022 (forecast)

Public Entities

District HeatingCompanies

Population

24

18

13

5 bln м3potential for annual reduction by 2022

3

KEY PRIORITY: SUBSTITUTION OF NATURAL GAS

3

9% of energy saving comparing to the average final energy consumption in 2005-

2009

11% of energy, produced from RESIn total energy consumption

25% of energy, produced from RES in the structure of primary energy supply

National RENEWABLE ENERGYAction Plan till 2020

Energy Strategy of Ukraine till 2035

4

National ENERGY EFFICIENCY Action Plan till 2020

Feed-in tariffs are fixed in EUR till 2030; Premium for Ukrainian equipment usage is

provided – 5-10% to existing tariff; Signing of bankable long-term Power

Purchase Agreement (PPA) with feed-in tarifftill 2030;

Stimulating tariffs for heat produced fromalternative sources envisaged.

LAW OF UKRAINE «ON FOSTERING RENEWABLE ENERGY DEVELOPMENT»

Technology/Comm.Year 2015 2016 2017-2019 2020-2024 2025-2029

Biomass 123.86 123.86 123.86 111.48 99.09

Biogas 123.86 123.86 123.86 111.48 99.09

Geothermal 150.25 150.25 150.25 135.17 120.09

Small Hydro (0.2-1MW) 139.48 139.48 139.48 125.48 111.48

Small Hydro (1-10MW) 104.47 104.47 104.47 94.24 83.47

Solar (ground based) 169.64 159.94 150.25 135.17 120.09

Solar (roof based) 180.41 172.33 163.71 147.56 130.86

Wind (>2MW) 101.78 101.78 101.78 90.47 79.16

Solar (private households) 200.32 190.09 180.94 162.63 144.86Wind (private households) 116.06 116.06 116.06 104.47 93.16

38

100123.86

Poland Germany Ukraine

Average biomass feed-in tariff, EUR/MWh

EUR/MWh

5

INSTALLED CAPACITY OF RENEWABLE ENERGY OBJECTS WORKING UNDER THE "GREEN" TARIFF

2014 2015 2016 2017 Q ІIІ 2018

411 432 531742

10970.1 2

17

51

121

426 426438

465

522

80 87

90

95

96

35 3539

39

45

15 1720

34

44

SPP SPP Households WPP Small HPP Biomass Biogas

967 9991 135

1 426

1 925

From the beginning of 2015, 958 MW were introduced and around € 910 mln were invested.

6

0,1 0.3 0.8 1.2 2.2 3.4 5.1 7.916.7 20.1 24.9

37.1

51

63

89

121

ІV Q І Q ІІ Q ІІІ Q ІV Q І Q ІІ Q ІІІ Q IV Q І Q ІІ Q ІІІ Q IV Q І Q ІІ Q ІІІ Q

Installed capacity, MW

2014 2015 2016 2017 2018

21 40 94 132 244 298 430625 1109

13091635

23233010

3553

4660

6031

ІV Q І Q ІІ Q ІІІ Q ІV Q І Q ІІ Q ІІІ Q IV Q І Q ІІ Q ІІІ Q IV Q І Q ІІ Q ІІІ Q

Number of privat households

2014 2015 2016 2017 2018

DYNAMICS OF SOLAR INSTALLATIONS IN PRIVATE HOUSES

Around 120 mln EURO invested.The number of private houses eligible for solar panels

installation is 6,5 mln

7

Current situation in Ukraine with generation of household solid waste (HSW)

300 – 350 kgof household solid waste

removed to the landfills in Ukraine

is produced by one person in Ukraine

10 mln tonsof household waste

Annually:

gas equivalent

≈1 bln m3

3,5 mln Gcalof thermal energy

1,2 billion kWhof electric energy

8

Combined Heat & Power (CHP)

on renewable fuels

Botievska wind power station

Wind power turbines production plant

Under license of Germancompany Fuhrlaender AG

Capacity of turbines: 2,5 МW, 3,2 MWHeight: 100 m

Electricity output to theIntegrated Power System ofUkraine – 634 mln. kWh

Installed capacity: 200 MWTotal investment: € 340 mlnThe level of "green" tariff: 11,3 €ct/kWh

CHP provides heat andelectricity:190 residential buildings (22 000 dwellers);3 kindergartens; 5 schools.

Capacity: 45 MW including:15 MW – solid fuel boiler (5 and 10 MW);1,8 MW – turbine with ORC module (on solid fuel);3 MW – electric power.

Fuel: wood chips, pellets

Investments: 8,2 mln EUR

EXAMPLES OF SUCCESSFUL RENEWABLE PROJECTS

9

Teofipol biogas complex 15 MW

(PJSC “Orel-Lieder”)

Plant for landfill gas degassing

Town: Teofipol, Khmelnitskii regionType of fuel: sugar beet pulp, cornsilageElectricity production: 15 MW- 5 MW (first line working on sugar beet pulp);

- 10 MW (second line working on corn silage).

Heat production: 15 MWInvestments: 40 mln EUREquipment: Jenbacher (Austria)

Energy willow (SALIX energy)

Company: «SALIX energy»Plantations area: 1 700 haCrop capacity: 20 t/haAnnual growth: 34 000 t/yearCrop capacity cycle: 25 yearsHeat of combustion:17,3-18,0 MJ/kg

City: KhmelnitskiiStart of operation 2017Capacity: 659 kWElectricity production: 5,13 kWh/yearInvestments: 34 mln UAH (1,1 mln EUR)Investor: Biogas Energy (Ukraine)

EXAMPLES OF SUCCESSFUL RENEWABLE PROJECTS

10

renewable projects financing by the Abu Dhabi Fund for Development (ADFD) under 1-2% for up to 20 years;

legislation improvement; “green” investment attraction; additional guarantees to investors; cooperation with development

countries in renewable energy; access to the IRENA’s database.

Ukraine’s membership at IRENA:

Law of Ukraine «On Ukraine’s Accession to the Statute of the International Renewable Energy Agency (IRENA)»

On February 24, 2018 Ukraine officially became IRENA’s member!

11 159 IRENA’s members 24 countries started the accession procedure

UAMAP comprises detailed information on more than 79 implemented and 101 potential projects that require investments & soft loans in amount of

€ 4 bln

2212

www.uamap.org.ua

GIF UA

Lending Institution

Private investor

Project owner/initiator

Reporting

Recommendation to finance the project

«А» Donors

«В» IFIs

«С» City, district and regional councils

GIF UA

Supervisory Board (ITA, …)

Executive Committee

Technical Office

PROJECT OWNER/

INITIATOR

who is ready to implement the project

but lacks funding

Investment projects

(with feasibility study)

Investment projects

(without feasibility study)

1

2

3

4

GIF UA: SCHEME OF OPERATION IN BRIEF

Provision with project documentation

Cooperation Customer appeals to GIFand selects interestingproject(s) or offers hisown.

Application Form isprocessed by TechnicalOffice of GIF

Decision on the type offinancing and interactionmodel with a project

GIF assesses and offersits equity share in RESproject

Stakeholders invest inGIF UA

Banks give loans to thenew projects

1

7

5

6

2

3

APPLICATION

4

5-6-7

BiomassBiogas

WindHydro

Solar

Loan(up to 70%)

13

8

8

Диаграмма1

Кв. 1

Кв. 2

Частка в проектах "GIF" - 20%

Share of GIF in projects - 20%

80

20

Лист1

Частка в проектах "GIF" - 20%

Кв. 180

Кв. 220

Для изменения диапазона данных диаграммы перетащите правый нижний угол диапазона.

State Agency on Energy Efficiency and Energy Saving and other public authorities

2019 - 2020

Development of legislation Realization of pilot projects Attracting green financing

Introduction of the green bonds notion into Ukrainian

legislation and establishment of legal regime of their issue in

the context of issuers;

Development of guidelines, procedures and incentives for

the green bonds market.

Action Plan for Implementation

of the "Energy Sector Reform 2020" of the Energy

Strategy of Ukraine till 2035

Creation of conditions for implementation of green bonds

market in Ukraine as an instrument to attract investment in renewable energy and energy

efficiency projects

ROADMAP ON THE IMPLEMENTATION OF GREEN BONDS MARKET IN UKRAINE

Feasibility studies preparation for green projects and cost calculation

in the context of issuers;

Conducting an independent valuation of issuers;

Estimation of bonds certification according to the international

standards.

Preparation and holding of a large-scale marketing session (RoadShow) on the internal and external capital

markets;Partners involvement for

cooperation (International Financial Institutions, Green Climate Fund, Green Bond Fund for Developing Markets, Institutional Investors,

etc.)14

INVEST in UKRAINE!

State Agency on Energy Efficiency and Energy Saving of UkraineValerii KotsiubaDirector of Department on Investment Activity in Renewable Energy Sector Phone: +38 (096) 477 77 04E-mail: kotsiuba1@gmail.com

Slide Number 1Slide Number 2Slide Number 3Energy Strategy of Ukraine till 2035Slide Number 5INSTALLED CAPACITY OF RENEWABLE ENERGY OBJECTS �WORKING UNDER THE "GREEN" TARIFF Slide Number 7Slide Number 8Slide Number 9Slide Number 10Slide Number 11Slide Number 12Slide Number 13Slide Number 14Slide Number 15