Energy Efficiency Transformation in Ukrainian Cities

The World Bank assisted Ukraine in improving its energy efficiency (EE). Many Ukrainian cities are signatories of Covenant of Mayors, thus have made clear and strong commitment to increase EE and reduce carbon emissions by 20%. Given the cross-sectoral nature of energy to improve efficiencies in demand and supply, municipal governments needed to evaluate options holistically, across sectors, and within the urban planning framework. More importantly, cities needed to mobilize resources, institute delivery mechanisms, and develop capacity to implement transformational strategies and priority actions.

The Energy Efficiency Transformation in Cities TA – supported by the Cities Energy Efficiency Transformation Initiative (CEETI) of the Energy Sector Management Assistance Program (ESMAP) – assisted three selected Ukrainian cities in building local capacity for developing and implementing transformational EE investments in municipal services, infrastructure, and buildings.

The main objectives of this projects were to:

• Assist selected cities to efficiently plan and implement EE investment programs in municipal sectors
• Help selected cities identify and develop bankable municipal EE projects and facilitating their financing
• Facilitate development of financial mechanisms for replicating and scaling up piloted municipal EE investment transactions
• Disseminate best practices and lessons learned with cities throughout Ukraine
• Assist the City of Ternopil in establishing financing mechanisms for EE in its buildings and facilities:
  • Definition of how an EE fund and a municipal (or public) ESCO would operate at the municipal level
  • Identification, review and documentation of the major legislative, regulatory, institutional, economic and financial opportunities, issues, challenges and barriers that Ternopil may face in establishing an EE fund and establishing/operating a municipal ESCO
  • Assessment of options regarding how the EE fund and the municipal ESCO can function together
  • Assessment of the costs, benefits, advantages and limitations of each option
  • Development of a “business model(s)” to define the best operating procedures for one or both financing mechanisms
  • Development of a recommended strategy for Ternopil and documenting the rationale thereof
  • Preparing a business plan for the recommended strategy

Type of Services provided:

• Energy efficiency assessment of the municipal sectors in three selected cities, including collecting, cleaning, aggregating, and normalizing data, using the TRACE tool, ensuring that relevant existing urban plans and initiatives are reviewed, and drawing conclusions regarding energy efficiency strategies
• Stakeholder consultation during the assessment
• Prepared City Energy Efficiency Assessment Reports
• Developed Municipal Energy Efficiency Programs
• Worked with designated city government counterpart of each partner city to develop a City Energy Efficiency Transformation Program, including clean energy efficiency targets, investment priorities and a pipeline of bankable projects, implementation arrangements, and key initiatives to strengthen local capacity
• Prepared pre-feasibility studies for three projects selected form the investment pipelines of the three partner cities by UkrEximBank and the World Bank.
• Supported training, knowledge dissemination, and institutional capacity building in partner cities, including presenting results of the TRACE assessment and conducted training class for other cities on TRACE assessment

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