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Ukraine is one of the least energy-efficient countries in Europe – it uses four times as much energy to produce one dollar of GDP as Germany does. But this will have to change, because when the country signed its Association Agreement with the EU in March last year, it was also agreeing to raise energy efficiency to EU standards.

A huge part of this drive will focus on residential buildings. Ukraine uses a lot of its power on heating, cooling and servicing its buildings, but creaking infrastructure, lack of investment, and delays in implementing energy reform mean that it will take a lot of effort to get Ukraine’s homes cleaner and greener. With the government beating the energy efficiency drum in the media on a weekly basis, and breaking the country’s dependence on Russian gas more important than ever, what progress has Ukraine made?

Small victories

There have been several interesting projects announced in the last few months. The Ukrainian government has announced it will spend 500 million UAH ($21 million) on subsidising non-gas heating fuels, hoping to encourage installation of renewable heating technology, while Ukraine’s first ‘energy efficiency village’ has been built in the Vinnitsa region, with all its power and heating provided by renewable energy and alternative fuels.

Meanwhile, the region’s capital Vinnitsa signed a deal in January to convert 135 communal heating facilities to run on alternative fuel, and on a municipal level the city of Kharkiv has managed to cut energy use ninefold through more efficient street lighting. Other initiatives announced around Ukraine have included 250 million UAH ($10.6 million) for new boilers and 440 million UAH ($18.7 million) more to help apartment block owners fund modernisation of their heating systems.

International assistance

These projects at local level are helping to get the ball rolling, serious momentum could also be provided by outside investment.

The World Bank is the primary source of this outside investment – its lending to Ukraine tripled from 2012 to 2013 and then tripled again the following year to reach over $1.3bn, and last May it launched a $380m programme called ‘District Heating Energy Efficiency’. The programme will see cash spent on full upgrades of municipal utilities, including rehabilitating boiler houses, replacing heating pipes, installing meters, fitting management systems, and much more that could interest companies looking to provide these technologies.

The EU is investing in Ukraine, too – the town of Dolina, in Ukraine’s Ivano-Frankivsk region, will receive a €700,000 grant to insulate apartment blocks and reduce energy consumption. It is one of eight Ukrainian towns and cities involved in the EU-funded €6m Sustainable Urban Demonstration Projects programme.

Room in the market?

While the money involved in these international programmes is more likely to make the headlines, and there is much to be done regarding the energy consumption of industries and factories, Ukraine’s housebuilders, businesses and residents choosing cleaner technologies will form the backbone of the country's progress. And with the government tempting citizens with heavy subsidies – if a resident of Ternopil in western Ukraine wants to modernise their heating system, for example, the city council will meet 70% of the costs – 2015 could bring opportunities for HVAC suppliers to Ukraine. 

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