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Experience and Prospects of Financing Renewable Energy Projects in Ukraine

Author

Listed:
  • Galyna Trypolska

    (Department of Sectoral Forecasts and Market Conditions, SO Institute for Economics and Forecasting, UNAS, Ukraine,)

  • Oleksiy Riabchyn

    (Energy and EU Green Deal Advisor to Deputy-Prime Minister for European and Euro-Atlantic Integration of Ukraine, Cabinet of Ministers of Ukraine, Ukraine.)

Abstract

The study examined the experience of financing renewable energy projects in Ukraine. Renewable energy is one of the tools to enhance decarbonization and meet the obligations taken within the Association Agreement between Ukraine and the EU, and under the Paris Agreement. Ukraine has factors impeding the investments, resulting in a high cost of capital. Overall, there are five main options of financing theoretically available: lending, primarily with the aid of international financial institutions; funding of renewable energy projects by municipalities; voluntary associations of citizens; securities; irrevocable financial assistance. The future instruments include securities and a recently announced mechanism to finance renewable energy projects in the frame of the Green Deal. The most expansive spread option for funding renewable energy projects was lending with the help of international financial institutions. Due to the bilateral electricity market transition of Ukraine in 2019, Ukraine failed to found a model for sustainable financing of electricity from renewables, resulted in the accumulation of significant debt with the feed-in tariff payment. This fact hinders the planned and potential future investments until a sustainable model of financing is found.

Suggested Citation

  • Galyna Trypolska & Oleksiy Riabchyn, 2022. "Experience and Prospects of Financing Renewable Energy Projects in Ukraine," International Journal of Energy Economics and Policy, Econjournals, vol. 12(1), pages 134-143.
    • Handle: RePEc:eco:journ2:2022-01-17
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    References listed on IDEAS

    as
    1. Sokolova, Tetiana & Sushchenko, Oleksandr & Schwarze, Reimund, 2019. "Roadmap for a Green Financial Policy in Ukraine under the EU Association Agreement," UFZ Discussion Papers 6/2019, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).
    2. World Bank, 2020. "Doing Business 2020," World Bank Publications - Books, The World Bank Group, number 32436, December.
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    Cited by:

    1. Man Zhou & Uliana Pysmenna & Oleksandra Kubatko & Volodymyr Voloshchuk & Iryna Sotnyk & Galyna Trypolska, 2023. "Support for Household Prosumers in the Early Stages of Power Market Decentralization in Ukraine," Energies, MDPI, vol. 16(17), pages 1-15, September.
    2. Viktor Koval & Piotr Olczak & Mira Hakova & Mykhailo Bilyi & Dmitry Kretov & Olga Laktionova, 2023. "Analysis of Financial Outsourcing Management in Regional Environmental Systems," Sustainability, MDPI, vol. 15(15), pages 1-24, August.

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    More about this item

    Keywords

    Renewable Energy; Financing; Ukraine;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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