Fachagentur Nachwachsende Rohstoffe e.V. (FNR)
OT Gülzow • Hofplatz 1 • 18276 Gülzow-Prüzen
Telefon 0 38 43/69 30-0 • Fax 0 38 43/69 30-1 02
E-Mail: info@fnr.de • Internet: www.fnr.de


Financing Sources

Within BIO-PROM the GFA Consulting Group has prepared an overview of financing sources for bioenergy projects in Ukraine. The analysis focused on international development programmes, specially designed to support the renewables’ sector in Ukraine. Only programmes from the EU and EU member countries were considered. It should be mentioned that Ukrainian private banks may also offer further individual conditions for project developers. Some private banks in EU member states support the export of equipment for renewable business development as well. These options require a separate analysis.

Overview of financing programmes currently open for investment projects in Ukraine

Financing programmes in detail

Ukrainian Sustainable Energy Lending Facility (USELF)
Initiators
  • European Bank for Reconstruction and Development (EBRD)
Investors
  • European Bank for Reconstruction and Development (EBRD)
  • Clean Technology Fund (GEF)
Financing instruments
  • External financing
  • Development support for projects that meet the commercial, technical or environmental eligibility criteria
  • Financing of small and medium sized projects directly through the EBRD = simplified, fast approval procedures to keep the transaction costs low
Eligibility criteria - USELF
General eligibility criteria
  • All forms of electricity production from renewable energy sources
  • Raw materials for biogas production from sustainable sources / organic waste material
  • Production and distribution of liquid biofuels is excluded
Eligibility criteria for companies
  • Privately owned, registered and resident in Ukraine
  • Compliance with national environmental, health and safety laws
  • Proven track record and creditworthiness
  • Exclusion of activities from the EBRD exclusion list (alcohol, tabacco...)
Eligibility for projects
  • Substitution of electricity from conventional energy sources
  • Reduction of greenhouse gas emissions
  • Proven technology
  • Financially viable
Financing conditions - USELF
Fiancial products
  • Medium-term senior loans (max. credit period 15 years)
  • Grace period up to 2 years
Interest rate
  • 8-9% (only €) depending on assessment of project conditions and negotiations with promoters
Investment volume
  • Expected loan volume of USELF 1.5 to 15 million €
Equity capital requirement
  • At least 40% of total investment
Requirements - USELF
Information about project
  • Name, address, personal data of all project participants
Financial background information
  • Annual financial statements in accordance with the International Financial Reporting Standards (IFRS) of all companies directly involved in the project (last 3 years)
  • For Special Purpose Vehicles (SPV) => each shareholder
Technical documentation
  • Technical feasibility study: technical concept, to be procured equipment, total investment costs
Business plan
  • Cashflow analysis and liquidity planning incl. audit of reserve accounts => expected profits

Ukrainian Energy Efficiency Programme (UKEEP)
Initiators
  • European Bank for Reconstruction and Development (EBRD)
Investors
  • European Bank for Reconstruction and Development (EBRD)
  • Austrian Federal Ministry of Finance
Financing instruments
  • External financing, technical assisstence for projects that comply with the commercial, technical or environmental criteria
  • Financing through Ukrainian partner banks => currently Raiffeisen Bank Aval, Ukreximbank and MegaBank - for small and medium sized projects
Eligibility criteria - UKEEP
General eligibility criteria
  • Renewal and expansion of production facilities with energy-efficient equipment
  • Own use of renewable energy sources
  • Energy-saving measures in commercial buildings
Eligibility criteria for companies
  • Privately owned, registered and resident in Ukraine
  • Compliance with national environmental, health and safety laws
  • Proven track record (>2 years of operation) and creditworthiness
  • Only small and medium enterprises with up to 249 employees and a maximum turnover of 50 million € are financed by Ukreximbank and MegaBank
  • Exclusion of activities from the EBRD exclusion list (alcohol, tabacco...)
Eligibility for projects
  • Economic efficiency
  • Only bioenergy produced for own use is considered within the project assessment
  • Proven technology
Financing conditions - UKEEP
Fiancial products
  • Medium-term senior loans
Interest rate
  • Depending on assessment of project conditions and negotiations with promoters
Investment volume
  • Raiffeisenbank: maximum credit amount 10 million US $
  • Ukreximbank, Megabank: max. credit amount 3 million US $
Equity capital requirement
  • No minimum requirement but depending on project conditions and negotiations
Requirements - UKEEP
Information about project
  • Name, address, personal data of all project participants => due diligence
Financial background information
  • Annual financial statements in accordance with the International Financial Reporting Standards (IFRS) of all companies directly involved in the project (last 3 years)
  • For Special Purpose Vehicles (SPV) => each shareholder
Technical documentation
  • Technical feasibility study: technical concept, to be procured equipment, total investment costs
Business plan
  • Cashflow analysis and liquidity planning incl. audit of reserve accounts => expected profits

Ukrainian Sustainable Energy Financing Facility (USEFF) - follow-up programme to UKEEP
Initiators
  • European Bank for Reconstruction and Development (EBRD)
Investors
  • Megabank and Ukrexim
Other
  • Framework measure of 100 million US $
  • Credit lines to local banks and leasing companies (PFI) to grant credits to private enterprises for investments in sustainable energy.
  • Medium-term loans
  • Austrian Federal Ministry of Finance: Support of USEFF with 4.327 million € for technical cooperation
  • Consultant: energy efficiency expert & project consultant (technical assistance for banks)

Green for Growth Fund, Southeast Europe (GGF)
Initiators
  • KfW Development Bank
  • European Investment Bank (EIB)
Investors
  • European Commission (EC), German Federal Ministry of Economic Cooperation and Development (BMZ), European Investment Bank (EIB), KfW Entwicklungsbank, European Bank for Reconstruction and Development (EBRD), Development Bank of Austria (OeEB), the Netherlands Finance Company (FMO), Sal. Oppenheim
Financing instruments
  • Medium to long-term loans, subordinated loans, letters of credit, guarantees, mezzanine debt, debt securities
Financing conditions - GGF
Fiancial products
  • Medium-term senior loans (max. credit period 7 years)
Interest rate
  • 8-9% (only €) depending on assessment of project conditions and negotiations with promoters (€/$)
Investment volume
  • Minimum credit volume through GGF 10 - 15 million € => Minimum investment volume > 13 million €
Equity capital requirement
  • At least 33,3% of total investment volume
Requirements - GGF
Information about project
  • Name, address, personal data of all project participants => due diligence
Financial background information
  • Annual financial statements in accordance with the International Financial Reporting Standards (IFRS) of all companies directly involved in the project (last 3 years)
  • For Special Purpose Vehicles (SPV) => each shareholder
Technical documentation
  • Technical feasibility study: technical concept, to be procured equipment, total investment costs
Business plan
  • Cashflow analysis and liquidity planning incl. audit of reserve accounts => expected profits

German Climate and Development Society (DEG) – Climate Partnership with the Private Sector
Initiators
  • Germany
Investors
  • Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB) / International Climate Initiative
Financing instruments
  • Mobilization of the private sector for climate protection in developing and emerging countries
  • Promoting technology and knowledge transfer
  • Development of a low-carbon economy
Eligibility criteria - DEG
General eligibility criteria
  • Promoting the introduction of climate-friendly technologies
  • Adapting proven technology for reducing greenhouse gas emissions
  • Demonstration of innovative technologies
  • Structure-forming effect in connection with the use of climate-friendly energy
Eligibility criteria for borrowers
  • German or European private company (also in cooperation with Ukrainian partners)
    • Annual turnover of at least 1 million €
    • At least 10 employees
    • Operating for at least three fiscal years
Eligibility criteria for projects
  • Economic efficiency
  • Climate-friendly impact in the host country
  • Project must not be required by law
  • Not yet started implementation of the project
Financing conditions - DEG
Financial products
  • Grant up to 50% of eligible project costs
Interest rate
  • n.a.
Investment volume
  • Maximum of 200,000 €
Further requirements
  • Companies must contribute at least 50
  • Maximum duration 2.5 years
Requirements - DEG
Information about project
  • Name, address and further data of all who participate in the project (sponsor)
Financial background information
  • Information about the finances of all companies participating in the project
Technical documentation
  • Technical feasibility study: technical concept, to be procured equipment, total investment costs
Business plan
  • Cashflow analysis and liquidity planning incl. audit of reserve accounts => expected profits

Investment Fund for Developing Countries (IFU) / Danish Climate Investment Fund (KIF)
Initiators
  • Danish government
Investors
  • Danish government
  • Investment Fund for Developing Countries
  • Institutional Investors – Pension Funds (KIF)
Financing instruments
  • Investment of equity or provision of loans/guarantees for projects involving Danish companies
  • Direct investment in the project company in Ukraine
Eligibility criteria - IFU/KIF
General eligibility criteria
  • All business areas
  • Reduction of greenhouse gases required
Eligibility criteria for companies
  • Private Danish companies which are willing to participate in Ukraine
  • The Danish Climate Investment Fund (KIF) supports small and medium enterprises to open up new countries and markets: directly or as a subcontractor for larger climate projects
Eligibility for projects
  • Economic efficiency
  • Project must have impact on development in the host country
Financing conditions - IFU/KIF
Fiancial products
  • IFU: share of investment up to 30%
  • Smaller projects up to 49%
Interest rate
  • Expectation: revenues from investment through shares within an investment period of 5 to 7 years
  • Loan terms depending on project / country conditions and risks
Investment volume
  • Minimum 500,000 DKK (67,000 €) up to 100 million DKK (ca.13.4 million €)
  • In addition, loans at market conditions
Further requirements
  • Danish companies must at least invest the same amount as IFU
Requirements - IFU/KIF
Information about project
  • Danish participant must be part of the SPV
  • Name, address, personal data of all project participants (sponsors)
Financial background information
  • Annual financial statements in accordance with the International Financial Reporting Standards (IFRS) of all companies directly involved in the project (last 3 years)
  • For Special Purpose Vehicles (SPV) => each shareholder
Technical documentation
  • Technical feasibility study: technical concept, to be procured equipment, total investment costs
Business plan
  • Cashflow analysis and liquidity planning incl. audit of reserve accounts => expected profits

NEFCO Cleaner Production Facility (NEFCO)
Initiators
  • Nordic Environmental Development Fund (NMF)
Investors
  • Nordic Environment Finance Corporation (NEFCO)
Financing instruments
  • Loans on favorable terms to private and public companies; Loan repayments directly linked to achieved savings of the invest
Eligibility criteria - NEFCO
General eligibility criteria
  • Modernization and renovation of existing production facilities and processes to generate positive environmental effects
Eligibility criteria for companies
  • Private or public companies
  • Borrower: open and fair procurement process for goods and services
Eligibility for projects
  • Maximum payback period of 4 years
  • Annual savings of approx. 25% of investment costs
Financing conditions - NEFCO
Financial products
  • Loans with a max. credit period of 5 years
Interest rate
  • Fixed rate: 6% / year (quarterly repayments)
Investment volume
  • Max. Loan amount 500,000 €; up to 90% of the total project costs can be financed
Further requirements
  • Securities of 125% of the loan (property, equipment, bank or municipal guarantees)
Requirements - NEFCO
Information about project
  • Name, address, personal data of all project participants => due diligence
Financial background information
  • Annual financial statements in accordance with the International Financial Reporting Standards (IFRS) of all companies directly involved in the project (last 3 years)
  • For Special Purpose Vehicles (SPV) => each shareholder
Technical documentation
  • Technical feasibility study: technical concept, to be procured equipment, total investment costs
Business plan
  • Cashflow analysis and liquidity planning incl. audit of reserve accounts => expected profits

For information concerning possible financing sources for projects regarding business development in the Russian Federation follow the link.