New law is designed to reduce gas consumption by roughly 30 percent
The Verkhovna Rada (the unicameral parliament of Ukraine) recently adopted the “Law on the Energy Efficiency Fund”, which is to serve as a technical and financial tool that will not only enable the more efficient use of state budget funds, but is also intended to attract international aid.
Of major significance is that the Energy Efficiency Fund (EEF) has been designed to help reduce gas consumption in Ukraine by an estimated 30 percent. Based on this understanding, the European Union has already confirmed that it will provide financial support worth EUR 100 million towards achieving the targeted reduction amount.
Currently, Ukraine is heavily dependent on energy imports, which in the current geopolitical climate poses high risks to the country’s sought-after energy independence. Natural gas claims the biggest share of Ukraine’s imported energy, amounting to 19.5 billion cubic metres, or the equivalent of 15.7 million tonnes of oil.
Another area of concern for Ukraine’s energy sector at the macroeconomic level is the inefficient overall state of the country’s heating infrastructure for buildings, in which roughly 60 percent of consumed energy is lost. This translates in economic terms to an annual loss of nearly USD 3 billion, a burden that the state was forced in 2015-2016 to finance through accumulated foreign loans.
The EEF, it is hoped, will act as an immediate catalyst for attracting investment in projects aimed at reducing energy consumption and developing a more energy-efficient infrastructure.
Cooperatively involved in the EEF’s conception were the Cabinet of Ministers of Ukraine, the State Agency for Energy Efficiency and Energy Saving, the Government of Germany, the EU Delegation to Ukraine, the EU Support Group to Ukraine, Berlin Economics, the Coordination Center for Interaction, World Bank Group experts in Ukraine.
Sources: Energy Efficiency Fund