About prospective changes in the Fund’s programs at the meeting of the Advisory Council

On March 10, the participants of the meeting of the Advisory Council of the Energy Efficiency Fund discussed the state of implementation of the “ENERGODIM” and “VidnovyDIM” Programs, as well as proposals for changes to them. The main discussions were about finding ways to help HOAs in conditions of non-granting of loans by banks and the introduction of marginal specific costs of works for energy-efficient activities.

The director of the Energy Efficiency Fund — Yehor Fareniuk — talked about the institution’s achievements in 2022, current problems in its activities and prospects for its development. “During the past year, we responded to the requirements of the time as quickly as possible within the limits of our powers,” he noted. — Among the important initiatives is the launch of the “VidnovyDIM” Program for the restoration of buildings damaged as a result of hostilities and the attraction of EUR 25 millions from the European Union for its implementation. In addition, we introduced a number of simplifications to the “ENERGODIM ” Program, which enabled HOAs to implement projects in wartime conditions. As a result, during 2022, 162 projects have fully or partially completed construction works, 150 of them during martial law. Under this program, a record amount of grants was paid out — UAH 558 million.”

Among the problems that arise during the implementation of the “ENERGODIM” Program in wartime conditions is the failure of banks to provide loans to HOAs. The current model of the Fund’s work is focused on the sustainable development of the economy of Ukraine, the dynamic reduction of interest on bank loans and the financial capacity of co-owners of residential buildings. The Fund is currently developing possible ways to solve the issue — reducing the amount of the HOA’s own contribution: instead of 40% — 20% for Package A, instead of 20% — 10% for Package B, as well as the possibility of providing an advance in the amount of 30% for the performance of works. In addition, the Fund envisages the importance of settling the issue of the suspension for the period of martial law and for three months after it, the accrual of interest and commissions under credit agreements. Currently, the Fund is also initiating the creation of a state revolving fund for financial support of the participants of the “ENERGODIM” Program. But all these decisions must be collegial and can be implemented only with the consent and support of donors.

“In the conditions of a prolonged crisis, the model of work of the “ENERGODIM” Program needs a systematic reformatting,” commented Yehor Fareniuk. — “We propose to consider the possibility of extending the programs to new beneficiaries — managers of apartment buildings and management companies, which, in particular, will speed up the implementation of projects. In addition, it is necessary to develop and approve at the level of the ministry the marginal specific costs of works for the main energy efficiency activities, which will help the participants of the programs to save money. In the future, we are considering the possibility of expanding the “VidnovyDIM” Program — adding an energy-efficient component to it. For example, among the activities financed by the grant may be not only the restoration of the house, but also the installation of IHP, as well as boilers for the whole building – we are negotiating with donors about this.”

Another development of the Fund, which is planned to be implemented, is the launch of a new direction. Currently, the Fund has already developed the concept of the grant Program for stimulating the use of alternative energy sources. It is designed to increase Ukraine’s energy independence and reduce energy consumption. The Program will finance the purchase and installation of heat pumps (ground and air) and related equipment, solar panels, storage systems and inverters, solar collectors. A set of activities for the installation of this equipment can turn a house into a building with close to zero consumption.

The members of the Advisory Council made their proposals for the introduction of changes to the current implementation model of the Energy Efficiency Fund programs and outlined ways to achieve these goals. In particular, Yurii Husakov, an expert at the Center for the Development of Mykolaiv Housing Fund, emphasized: “As an alternative to lending to HOAs, which is currently inactive, you can consider lending through the existing banking products of enterprises, that is, contractors. This will make it possible to relieve tension from homeowners associations. So that contracting organizations do not have problems with profitability, it is advisable to introduce restrictions on the specific cost of works in foreign currency. This will protect business in economically unstable conditions.”

Sviatoslav Pavliuk, executive director of the Association “Energy-Efficient Cities of Ukraine”, noted that explanatory work on the importance of energy efficiency — both at the state level and at the level of public opinion — is one of the tasks of the Advisory Council. “Currently, there are two main problems that stand in the way of the implementation of the Fund’s programs,” he commented. — “The problem of non-crediting of HOAs can be solved, for example, by launching a separate credit program of state banks that will offer low interest rates. To eliminate the problem of the protracted period of implementation of projects according to the programs, it makes sense to amend the legislation that regulates the mechanism for implementing energy-efficient activities. In addition, it is important to extend the programs to management companies, because HOAs currently cover approximately 15% of the housing stock. The rest of the Ukrainians are left without an efficient instrument of state support.”

We would like to remind that the Advisory Council is an advisory body of the Fund, created to support energy-efficient initiatives in the multi-apartment housing sector. Its participants are free and independent from the influence of any persons while performing their duties, and are also guided by the norms of the current legislation of Ukraine and internal acts of the Fund.

On the web-site, you can familiarize yourself with Regulations on the Advisory Council of the Energy Efficiency Fund and Regulations of the Advisory Board of the State Institution “Energy Efficiency Fund”.