Energy Service Companies

At the heart of innovative financing models for efficiency

Energy service companies (ESCOs) deliver energy efficiency projects that are financed based on energy savings. Given the need to rapidly and significantly increase financing for energy efficiency, interest in ESCO business models is growing.


Ukraine


The following information is derived primarily from the OECD's 2019 Enhancing Competitiveness in Ukraine through a Sustainable Framework for Energy Service Companies (ESCO) report.


Insights

Ukraine is one of the most energy intensive countries in Europe due to an ageing building stock and energy-intensive local industries. Therefore, Ukraine has potential to achieve greater energy security through gains in energy efficiency. Energy security will be achieved by creating a business environment that combines financing dedicated to energy efficiency projects with technical expertise and standardised contracts required to complete efficiency improvement projects.

Recent trends show that Ukraine is taking steps to increase its energy security. In 2007 there were three active ESCOs in Ukraine, as of 2018 there were 15 active ESCOs. The proliferation of ESCOs within the country is a reflection of the success of several key policies.

Financial barriers, such as high interest rates, low energy prices, and lack of access to long term loans, remain primary issues for Ukrainian ESCO market growth.

The 2019 OECD report identified several additional key barriers:

The OECD report recommends the following actions to improve the policy framework for ESCOs in Ukraine

Supply - Access to finance:
Demand - Incentives for investment:
Demand/supply matching - Coordination:
Awareness - Promotion: