Loan Guarantee Fund by UNIDO and Ukrgasbank will continue its operation till the end of 2025

With endorsement of the Ukrainian stakeholders and GEF (Global Environmental Facility), the UNIDO-GEF UKR IEE Project together with Ukrgasbank have finalized contractual arrangements to extend operation of the Loan Guarantee Fund till the end of 2025.

The Loan Guarantee Fund (LGF) is a revolving financial instrument launched by the United Nations Industrial Development Organization (UNIDO) and Ukrgasbank to support capital availability for industrial enterprises for implementation of energy efficiency measures and the energy management systems.

The support, provided by UNIDO and GEF as the main donor with cross-guarantee by CITI Bank, is structured to securitize dedicated eligible loans and in such a way to allow companies to do energy efficiency projects. Since launched, LGF has been the first guarantee-based financial mechanism in Ukraine to improve financing conditions for industrial energy efficiency (IEE).

The LGF has not stopped its operation during the war and now has been extended with new additional benefits for the potential borrowers:

Extended operation of the Loan Guarantee Fund till 31/12/2025
Increase of the maximum per loan per beneficiary guarantee from eq$150,000 to eq$500,000
Additional eligibility to finance Energy Service Companies (ESCO) operating in the industrial sector.

By applying for a loan through the LGF, businesses can obtain loans at a reduced interest rate and with covered collateral. However, the main objective is to allow enterprises to benefit from energy and resource savings of up to 25% through the implementation of energy management systems (EnMS) and energyefficient measures. This will reduce operational expenditures for enterprises on permanent basis, will boost their market competitiveness, and improve energy and resources availability.

The technical office of Ukrgasbank gives priority to the analysis of such loans!

Who might be interested and eligible under LGF: energy-intensive industries like chemical, building materials production, and metallurgy; manufacturing enterprises; food production and processing industries, production and export-oriented companies, and ESCOs that work in industrial segment.

"This joint program of Ukrgasbank and UNIDO that fosters energy savings at industrial enterprises is very important, especially during the war, when businesses need to reduce the load in the energy sector of Ukraine. Furthermore, by reducing energy consumption such enterprises not only enhance Ukraine’s energy security, but also contribute to our green future," – stated Rodion Morozov, Acting Chairman of the Management Board of Ukrgasbank.

“UNIDO has been dedicated to facilitate to industrial energy and resource efficiency in Ukraine. Our Loan Guarantee Fund that has already proved to be a true revolving financial mechanism is a very needed instrument to help Ukrainian businesses to recover in better way and to be competitive and efficient. This is the core for the future Ukrainian economy that will help to shield Ukraine and make our country to prosper. With the continuous efforts of UNIDO, supported by GEF, other donors, and the National Stakeholders, we are determined to expand the size of such financial instruments as the Loan Guarantee Fund!” – stated Serhiy Porovskyy, Principal Expert on Energy Efficiency Financing and Policy, UNIDO.

For more information about the program, please refer to the following links:

14.11.2023

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