Rodion Morozov, Head of ecological projects department at UKRGASBANK: “We have already implemented 244 home solar power projects worth UAH 81.1 mln”

JSB “UKRGASBANK” is the leading banking institution of Ukraine in the field of renewable energy project funding. In particular, Ukrgasbank financed 55% of the new capacity that received the “green” tariff in 2018. All “green” projects implemented by the Bank will save about 800 mln cubic meters of gas and reduce CO2 emissions into the atmosphere by 1300 thousand tons.

In an interview to IB Centre, Rodion Morozov, Head of the Ecological Projects Department at JSB “UKRGASBANK”, shared the Bank’s latest achievements and his vision of Ukrainian sustainable energy market’s future.

What have been the key achievements of JSB “UKRGASBANK” this year?

We have been (and are) the leading eco-direction driver in Ukraine, actively changing the worldview of Ukrainian society in terms of environmental impact. And this year, as always, we have had a track record of the largest domestic ECO-projects implemented.

Thus, with our financial support, a solar power plant – unique both for Ukraine and Europe – was put into operation in Dnipropetrovsk region in August. This new generation solar plant uses the innovative bifacial solar panel technology combined with a state-of-the-art solar tracking system that allows generating 40% electricity more than traditional solar installations of the same size do. In addition, this station is the most efficient for Ukraine’s line of latitude. Unlike conventional solar plants with traditional panels, this plant can convert the sunlight reflected from snow to clean electricity in winter.

Given its significant contribution to the development of modern environmental security and energy independence of Ukraine, it is not surprising that Ukrgasbank has become the first official participant of the Principles of Responsible Banking, created on the basis of an innovative partnership between banks around the world and the United Nations International Initiative on responsible financing. It is a powerful global community that brings together one third of the world’s banking capital, which makes up USD 47 trillion, and is supported by 130 financial institutions from 45 countries. The principles of responsible banking determine the role and responsibility of the banking industry in creating a sustainable future, and aligning the banking sector with the UN Sustainable Development Goals and the Paris Climate Agreement of 2015. Importantly, they also enable the Bank to implement sustainability in all areas of its activity, and determine how exactly it can make the greatest impact and contribution to a sustainable future.

Please tell us about the Bank’s services in the sector of sustainable energy.

Being ECO bank # 1, Ukrgasbank has launched a unique program of crediting households in Ukraine for purchase and installation of turnkey solar power plants. We have already implemented 244 of such projects for UAH 81.1 mln.

Since 2016, when Ukrgasbank was the first in Central and Eastern Europe to join the “green banking” association, we have been the leader of “green” financing in Ukraine for several years running. In cooperation with IFC, 165 large-scale renewable energy projects have been implemented.

The largest project financed by the Bank is Orlovska wind power farm with a total peak capacity of 98.8 MW. The project is expected to generate at least 334 million kWh of clean electricity per year, allowing reducing CO2 emissions by 153,000 tons per year.

Has the demand for “warm loans” among Ukrainians changed in the last 6 months? If so, how exactly?

This year, Ukrgasbank has become the only Ukrainian bank to launch “Enerhodim” program, aimed at supporting energy modernization of apartment buildings in cooperation with the Energy Efficiency Fund.

It presupposes funding of UAH 235 million from the State Budget of Ukraine and financial support from the EU and the Government of Germany for partial reimbursement of energy efficiency measures in amount of 40% of the cost of acceptable measures or works. In spring, while its pilot launch, 15 apartment building co-owner associations participated in the project, and 9 of them were awarded with signing grant contracts. And now, since the program’s official launch this fall, each of 30,000 apartment building co-owner associations in Ukraine has been given a beneficial opportunity to make its house warmer and more energy efficient.

Please tell us about your impressions of the SEF 2019 event.

Ukrgasbank, and I personally, took part in SEF once again – and every time we are sure that we will come next time. It is worth to admit the high level of the event’s organization. Many complicated issues of Ukraine’s renewable energy sector were voiced there. During the event, government officials communicated with business representatives and banks, thereby significantly reducing the complicated and long process of discussing energy sector reforms.

In your opinion, what are the most urgent issues in the field of renewable energy in Ukraine?

To develop the renewable energy sector today, it is crucial to create transparent conditions of cooperation for all market participants. The market situation should be predictable, clear, and open to the best market players that can really be trusted, which have already proven themselves and the high quality of their services. The rules of the game should be uniform for everyone.

According to Ukraine’s Energy Strategy by 2035, renewable is really developing rapidly in the country. Solar and wind power facilities have large-scale, but periodical, energy generation for which Ukraine does not have enough  highly maneuverable facilities.

Which experience of European countries in the development of renewable energy should Ukraine adopt first?

Certainly, the driving force of Europe’s eco-development is the Scandinavian countries. They have already switched to renewable energy that satisfies 55% of energy needs in Sweden, 41% – in Finland, and 36% – in Denmark. And further plans of the Scandinavians are even more ambitious – to displace coal and gas from their energy sector for good! Eco-initiatives are fully supported there at the level of government programs, and instead of an incentive system of “green” tariffs, the system of auction pricing for electricity, which is uncertainly gaining momentum in Ukraine now, took root long time ago.

What is the contribution of UKRGASBANK into the decarbonisation of the global economy?

Last year, Ukrgasbank joined the coalition of leaders in carbon pricing (CPLC – Carbon Pricing Leadership Coalition). Its main purpose is to reduce CO2 emissions through the introduction of carbon pricing, which is a simple, honest and effective strategy for tackling climate change. And already this year, CPLC has published its annual report Carbon Pricing Report 2018-19, in which its experts for the first time mentioned the cooperation of Ukrgasbank with such world leaders as World Bank, EBRD, IFC, Ecosphere + (UK) and Garanti Bank (Turkey).

They also mentioned the Bank’s lowering its credit rates depending on the effectiveness of reducing CO2 emissions when using credit funds, and adding in the Bank’s annual report of environmental and social risk management data.


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