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Expert: The energy system needs 250 million euros monthly support

14 April 2022

The President of the DiXi Group talked about possible sources for financing the support of the Ukrainian energy system

Due to the destruction of Ukrainian infrastructure by Russian Federation during the war and the reduction of payments in the market, the domestic infrastructure needs support of about 250 million euros per month. It was told during the discussion "Support for the Ukrainian economy during the war and plans for its recovery - a view from Ukraine" by the president of the analytical centre DiXi Group Olena Pavlenko.

“Regarding the short-term assistance, the Ukrainian energy sector needs liquidity. The volume of payments on the market decreased by approximately 60%. Now Ukraine's electricity market needs about 250 million EUR of support every month”, - said expert.

There are three sources for raising money: the support of international financial institutions against the background of projected impoverishment of consumers after the war, revenues from electricity exports to EU countries, the direction of "frozen" Russian assets.

Also, in the short term, Ukraine needs assistance with technical components, fuel, materials that allow Ukrainian energy companies to quickly repair the energy system from physical damage. 

“For these purposes, the Energy Community Secretariat has set up the Ukraine Energy Support Fund to which all interested donors can make donations. The fund is already working, a few days ago the first tranche was sent by the Danish government. If anyone in the audience wants to provide emergency financial support, I can contact the Energy Community Secretariat”, - commented Pavlenko.

But there are also plans for long-term perspective.

“In the long run, Ukraine plans to do more than just restore the energy sector to its pre-war state. Moreover, some assets would be impossible to rebuild – new ones should emerge from scratch. Both the Ukrainian government and experts support a strategy of "green" recovery, with the goals of decarbonization and reducing energy consumption”, - emphasized expert.

Therefore, Ukraine needs a Marshall Plan in the energy sector for future programs.

“How these programs can be designed? First, Ukraine must be perceived by the European Union as part of the internal European community. This means having access to EU internal funds, being exempted from CBAM (or having comprehensive mitigation period), participation in the EU-wide initiatives and programs focused of the European Green Deal (such as LIFE). Secondly, Ukraine should be able to implement debt swaps for decarbonization and green economy programs, following the example of other countries – like Jamaica, Belize, Seychelles. This tool would be definitely only supplementing, yet important one for environmental and climate actions. Special funds could be established either in Ukraine or abroad, and the main demand to them should be minimal bureaucracy and maximum transparency. Third, Western countries can develop their own programs to support national investors to invest in Ukraine's green recovery”, - concluded Pavlenko.

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