The Director of the PPP Agency took part in the matchmaking online event “Developing Modern Energy system in Ukraine: microgrid, alternative, green and renewable energy”
On February 28, with the support of the European Commission, the European Network of Enterprises (Enterprise Europe Network), the Ministry of Energy of Ukraine, the Ministry of Foreign Affairs of Ukraine, an matchmaking online event “Developing Modern Energy system in Ukraine: microgrid, alternative, green and renewable energy” was organized as part of the Electric energy matchmaking Forum for Ukraine support.
After russia’s unprovoked and unjustified invasion, Ukraine’s critical energy infrastructure suffered significant damage.
The information event was held with the aim of finding partners to support Ukraine in the restoration/reconstruction of the energy system in the most modern way, using all possible EU initiatives and programs, as well as with the aim of expanding cooperation between the EU and Ukrainian small and medium-sized enterprises (SMEs) in the energy sector.
The welcoming words and presentation of Mr. Farid Safarov, Deputy Minister of Energy of Ukraine, were dedicated to the functioning of the new digital platform “AidEnergy”. The platform was created with the support of the European Bank for Reconstruction and Development (EBRD) in partnership with other donors and international financial institutions (IFIs).
The “AidEnergy” platform allows the Ministry of Energy of Ukraine to create a centralized list of energy sector needs for all key energy companies and identify the donors and recipients, thus ensuring transparent and orderly communication. That is, “AidEnergy” is a “single window” (online environment) for receiving, agreeing and distributing humanitarian aid among affected energy companies. In addition to immediate emergency needs, collaboration with partners/donors will also include support to help identify future needs and procure equipment in advance to meet anticipated future needs.
To date, it has already been received through the “AidEnergy” platform
- more than 5.3 thousand tons of aid from 30 countries
- ~ 15,000 inquiries from over 140 companies
- cargo flow increased by 240% since October
Mr. Till Steinkamp, representing the Directorate-General for European Civil Protection and Humanitarian Aid Operations, spoke about the EU’s support to Ukraine in the energy sector and the work of the Emergency Response Coordination Center (ERCC).
In total, more than 85,000 tons of in-kind aid, including energy equipment, food, fuel, medical supplies, housing items, vehicles, and medical evacuation, have already been delivered to Ukraine through the Union Civil Protection Mechanism (UCPM).
In particular, in the energy sector, 1,730 electricity generators and more than 5 million units of energy equipment (including transformers, circuit breakers, electrical wiring and other technical equipment necessary for the repair and functioning of the energy infrastructure) have been sent or are being sent to Ukraine through UCPM.
If private sector companies wish to donate energy items, they can contact the EU-Energy Community Secretariat (ECS), which will help prepare a specific list of proposals and submit it through UCPM. Donors can contact UkraineEmergencySupport@energy-community.org
Mrs. Marie-Therese Richter-Kuhnert spoke about the Energy Community Secretariat, located in Vienna, Austria. The Energy Community is an international organization of which Ukraine, and the EU are members. The Secretariat acts as a fiduciary of the Ukraine Energy Support Fund, as well as an intermediary between donors and the Ukrainian authorities.
The Ukraine Energy Support Fund was established by the Ministry of Energy of Ukraine in agreement with the European Commission to counteract the impact of the russian attacks targeting critical energy infrastructure. The Fund enables governments, international financial institutions and international organizations, as well as corporate donors to provide financial support to the efforts of Ukraine’s energy sector to eliminate these losses and continue functioning. Contributions to the Fund are used to finance the most urgent needs of Ukrainian energy companies, such as equipment, spare parts and other technical items, as well as fuel and services needed to repair infrastructure and support energy and heat supply in Ukraine.
Mr. Ashley Hunziker, Director of Procurement at the USAID Energy Security Project, presented project measures to support Ukraine’s energy system.
USAID’s Energy Security Project works to improve Ukraine’s energy security by improving the energy policy, legal and regulatory environment, and increasing energy supply to achieve large-scale sustainable economic development to support Ukrainian democracy. The project purchases goods with USAID funds to assist the Ministry of Energy of Ukraine and other beneficiaries around Ukraine.
Mrs. Martine Diss from the European Commission spoke about the Single Market Program (SMP) and new opportunities for Ukrainian small and medium-sized enterprises (SMEs).
The Single Market Program is the EU funding programme to help the single market reach its full potential and ensure Europe’s recovery from the COVID-19 pandemic. Due to legal certainty, access to markets and financial services, investment opportunities and access to financing, the single market is also a launching pad for Ukrainian small and medium-sized enterprises (SMEs).
Mr. Taras Boychuk, head of the Project Office for the Development of Public-Private Partnerships in Infrastructure “SPILNO” at the Ministry of Communities, Territories and Infrastructure Development of Ukraine, spoke in detail about the national recovery mechanisms of Ukraine and the role of the Ministry and the State Agency for Restoration and Infrastructure Development of Ukraine, which will be responsible for implementation of country recovery projects.
Mr. Taras Boychuk focused the audience’s attention on the processes of consolidating sources of financing and funding restoration and development of infrastructure projects and the organization of effective financial management by attracting budget funds, international funds, donors, insurance funds, using various elements of investment support (in particular, grants, soft loans, state guarantees, international guarantees, political risk insurance, contingent liability insurance, preferential provision of land plots, etc.).
Prioritization and grouping of projects may apply
- Rehabilitation of critical infrastructure
- Rehabilitation of secondary infrastructure
- Rehabilitation of housing stock
- Rehabilitation of social infrastructure
- Rehabilitation/construction of energy infrastructure
- Relocation of industrial facilities
For each project, the most effective mechanism for its implementation will be chosen, in particular:
- procurement – Build
- procurement – Design and Build
- procurement with financing (according to the “Design-Build-Finance” (DBF) model),
- PPP projects with an availability fee (according to the “Design-Build-Finance-Operate-Maintain” (DBFOM) model)
- concession projects (according to the “Design-Build-Finance-Operate-Maintain” (DBFOM) model with payments from users (consumers))
- private projects
Mr. Niko Gachechyladze, director of the PPP Agency, presented the role of public-private partnership in the restoration of Ukraine’s energy sector to representatives of the governments of European countries, representatives of the private sector (potential private partners), as well as representatives of potential initiators of PPP projects from the public sector in the field of production, distribution, supply, storage, and accumulation of electric energy.
Opportunities to attract significant funding to restore Ukraine’s energy sector in the medium term are limited, so attracting private capital can be a good alternative.
Attracting private financing under the terms of a PPP/concession allows transferring responsibility for the facility to a private investor and freeing up resources for other tasks, allows to implement several projects at once paying for the infrastructure gradually after its commissioning.
Recent changes to budget legislation have opened up a new mechanism for attracting funds for infrastructure development, which enables state partners to make long-term commitments under PPP contracts. This is an important step for implementing socially significant projects, which are most often implemented according to the PPP model based on the availability of infrastructure (Availability based PPP model) with availability payments.
The procedure of preparation and implementation of the project takes some time but provides high-quality infrastructure or services for 5-50 years. At the same time, Bill No. 7508 currently proposes a simplified and shortened procedure for restoration projects. The shortened procedure does not provide for the development of a full-fledged feasibility study of PPP implementation; the project assessment is carried out according to simplified requirements and based on the results of a market interest study and consultations with potential investors. The selection of a private partner takes place at a tender based on predetermined criteria and participant requirements. During the implementation of the project, the private partner is responsible for the construction and maintenance of quality infrastructure and returns it at the end of the contract.
PPP opportunities in the restoration of Ukraine’s energy sector include projects aimed at the development, modernization and development of the country’s energy system in the medium term, i.e. not projects of rapid response to emergencies. For example, projects involving private financing on PPP base in the energy sector may include:
- electricity generation and storage systems, combining generating capacities with technologies that facilitate the integration of generated electricity into the grid (storage, highly maneuverable capacities)
- distribution/supply of electricity
- production of electricity and heat from biomethane/biogas
- hydrogen power plants.
Mrs. Olga Shubina, coordinator of the EEN Ukraine consortium, presented the Enterprise Europe Network (EEN) and the EU-Ukraine Solidarity Lanes Business Matchmaking Platform.
Enterprise Europe Network (EEN) is the world’s largest support network for small and medium-sized enterprises with international ambitions, which has many years of experience in the business environments of 60 countries. EEN allows enterprises to implement investments and develop at the international level by adopting the experience and practices of partners, receiving expert advice for market growth, and supporting business innovations, their distribution and popularization in the international arena.
Launched by the European Commission and managed by the Enterprise Europe Network, the EU-Ukraine Solidarity Lanes Business Matchmaking Platform aims to quickly bring together EU and Ukrainian businesses so that they can find pragmatic export solutions.
During the second session of the event, representatives of companies from the energy sector shared their experience and best practices in the following areas:
- microgrid energy system
- alternative energy
- renewable energy
- green technologies
- heat supply networks.
The ONLINE video recording of the event is available on the EEN Ukraine YouTube channel: