Joint Project with the European Investment Bank: "Ukraine District Heating Ukreximbank" – Financing Available for Municipalities
On 9 April 2024, JSC "State Export-Import Bank of Ukraine" (Ukreximbank) and the European Investment Bank (EIB) signed a Finance Contract for EUR 100 million to support investment projects of municipalities and public utilities in the district heating sector. The project aims to restore, modernise, and improve the energy efficiency of centralised heat supply systems in communities throughout Ukraine.
Financing is now open for applications from eligible communities and public utilities across Ukraine.
Project objective:
The objective of the project is to finance the investment needs of Ukrainian municipalities and public utilities to ensure sustainable, safe, and environmentally responsible heat supply, reduce energy dependence and support the restoration of critical municipal infrastructure.
Who can apply:
The Project is open to the following types of borrowers:
- Municipalities
- Local public administrations
- Village (rural) communities
- Central governmental bodies of Ukraine, their local state administrations, and local self-government bodies
- State and communal enterprises (excluding private enterprises)
Municipalities and utilities can apply at any stage, including when a project is still in development. Project preparation support and advice can be funded as part of the Project.
Types of projects eligible for EIB financing:
- Heat pumps, heat storage systems and related networks, and heat production from renewable energy sources
- Reconstruction or expansion of existing heating networks or construction of new ones, provided this does not increase the use of fossil fuels or inorganic waste
- Small gas-fired combined heat and power plants (CHP) and high-efficiency heat only boilers, solar power plants (SPP), supplemented by batteries and other storage technologies
- Decentralised heat generation (up to 50 MW capacity and CO2 emissions of up to 250 grams/kWh)
- Improvement of physical and cyber security of energy infrastructure
- Energy efficiency measures in public buildings
- Heating and cooling systems based on electricity (heat pumps, chillers, peak/backup boilers), renewable or low-carbon fuels, and waste heat
- Combined heat and power generation (cogeneration)
- Building renovation projects achieving at least 30% energy savings
- Solar panel projects for municipal or ground-mounted solar power plants, if the levelized cost of electricity (LCOE) is below €107/MWh per year
Financial benefits:
- Long-term loans from the EIB (up to 20 years)
- Reduced interest rate and possibility of a grace period
- Potential combination with EU grant support under the Ukraine Facility
- Financing available in UAH, EUR, or USD
- Loan amounts ranging from €40,000 to €25 million
- Free technical assistance from UNDP
Eligibility criteria:
Advice on eligibility is available free of charge upon request. Projects must meet the following requirements:
- Be part of the eligible project types
- Be implemented only in territories controlled by the Government of Ukraine
- Be economically, environmentally, technically, and financially viable
- Use funds exclusively for project purposes
- Present no sanction risks – the Borrower, Final Beneficiaries, and contractors under procurement contracts are not associated with sanctioned persons and must not appear on sanction lists
- Comply with EIB and EU environmental and social standards*
- Have all required project documentation and permits in accordance with Ukrainian law for the implementation and operation of the project
- Have no negative information or claims that could affect project implementation
- Comply with EIB procurement procedures*
Main non-eligible project categories:
- Purchase, construction or renovation of real estate for sale or rent
- Projects of a political or religious nature
- Any activity related to coal (extraction, processing, transportation, or storage)
- Purchase of land or farmland
- Coverage of VAT, customs duties, or other taxes
Expected impact for communities
- 30% thermal energy savings from deep building refurbishment, with potential for even higher reductions
- Reduced energy losses and reduction in fuel and heat costs
- Stable heat supply even during energy crises
- Improved quality of services for consumers
- Reduced environmental impact
Financial advantage of EIB financing
The EIB is the financial institution of the European Union. Under this Project, Borrowers benefit from more favourable financing conditions, including a reduced interest rate - at least 25 basis points (0.25%) lower than the rate that would apply without EIB participation.
EU guarantees supporting the Project
Funding is provided in accordance with EU support under Regulation 2024/792 of the European Parliament and of the Council of 29 February 2024 (the Regulation on the Ukraine Facility), which establishes the Ukraine Facility, including the Ukraine Investment Framework (UIF). In particular, the Project is supported under Article 31(1) of the Regulation, which sets out the Guarantee for Ukraine.
In accordance with Articles 31(6) and 31(7) of the Regulation, on 20 March 2025 the EIB and the European Union, represented by the European Commission and acting under the UIF, entered into the Ukraine Guarantee Agreement (EIB Special Guarantee Agreement for Ukraine). Under this Agreement, the European Union provides the EIB with a comprehensive guarantee for eligible financial operations with sovereign and non-commercial sub-sovereign counterparties in Ukraine (EIB Special Guarantee for Ukraine).
Contact information
Additional information is available by email at DHProject@eximb.com
* EIB Guide to procurement - Guide to procurement for projects financed by the EIB
* EIB Statement of Environmental and Social Principles and Standards - European Investment Bank Environmental and Social Standards
