Where to get funds for energy-efficient investments of SMEs
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The availability of own power sources and economical use of energy is the key to the smooth operation of domestic enterprises, especially in the conditions of Russian armed aggression aimed, among other things, at the destruction of Ukraine’s energy system.
Last winter, diesel generators became a quick answer to the problem with the business’s power supply.
However, rational long-term solutions should be comprehensive: in addition to installing means of uninterrupted power supply, also – transition to renewable energy sources, modernization of industrial equipment and insulation of enterprise premises.
It is this approach that, on the one hand, will ensure the stable functioning of the business, and on the other hand, minimize the harmful impact on the environment and significantly save resources.
Funds for the implementation of such projects by small and medium-sized businesses of Ukraine are already available thanks to the new program “Add energy to your business”, under which entrepreneurs will be financed with EUR 7 million to make energy-efficient investments.
Such investments will help reduce energy consumption and CO2 emissions, increase the competitiveness of enterprises and protect the environment, which is the main goal of the program.
Investment support for Ukrainian enterprises will come under the Project “Refinancing of energy-efficient investments of small and medium-sized enterprises of Ukraine through the financial sector” at the expense of a loan from the German Government, provided through the German Development Bank KfW, and with the support of the EU within the framework of the #EU4Business initiative.
“I am glad that the German federal government can support Ukrainian entrepreneurs in implementing energy-efficient measures exactly when it is most needed. Small and medium-sized enterprises form the basis of the economy, just like in Germany.
After all, during the war, they provide jobs, pay taxes and ensure the functional capacity of the state,” she noted Ambassador Extraordinary and Plenipotentiary of Germany to Ukraine Anka Feldhusen during the presentation of the “Add energy to your business” program.
The program in test mode started at the end of last year, so it already has its first success stories. “Melnychuk Family Dentistry” from Ivano-Frankivsk shared their experience:
“When the missile attacks on the energy infrastructure began, we had a problem with electricity supply.
Since the dental business cannot exist without electricity, this issue had to be solved somehow. And at that moment, we learned about the existence of the “Add energy to your business” program.
We submitted an application, received financing as one of the first in Ukraine and were able to purchase a diesel generator. This program saved our business,” he said owner of the clinic, Arsen Melnychuk.
Micro, small and medium-sized enterprises can receive financing within the framework of the program:
- are residents of Ukraine
- have been operating for more than 1 year;
- have a positive credit history;
- together with their owners or participants are not under the sanctions of Ukraine, the EU, the UN Security Council and Germany.
The investment project in the field of energy efficiency, for which credit funds are being raised, should ultimately ensure a minimum reduction of CO2 emissions by 20%.
The maximum amount of credit that can be granted for one enterprise is EUR 500,000 in hryvnia equivalent. The interest rate is equal to 16% per annum.
However, it can be compensated thanks to the combination of the energy efficiency program with the state program “5-7-9% Available Loans”, within which entrepreneurs are allocated financing for 5 years in the national currency at an interest rate of 5, 7 or 9%.
And the most important thing: funds will be provided to partner banks and entrepreneurs in hryvnias. This became possible thanks to EU financial assistance within the framework of the EU4Business initiative aimed at compensating FRP losses from currency fluctuations.
“I am very glad that our international partners are already looking at Ukraine from the point of view of recovery and reconstruction. And we, for our part, already have concrete reconstruction projects.
It is very important that within the framework of the program, entrepreneurs are protected from the risks of currency fluctuations, because funds are issued in hryvnias. Another important aspect is that the program, in addition to the loan itself, provides technical assistance.
Therefore, with the participation of specialists, the business will choose various components of the project in order to get the best result,” he said Yuriy Draganchuk, Deputy Minister of Finance of Ukraine for European Integration.
To participate in the program, an SME must take a few simple steps:
- Contact the partner bank regarding obtaining a loan and provide the necessary package of documents
- Pass a credit assessment and an assessment of CO2 emission reduction of your program, based on which the bank will make a decision on issuing funds
- Enter into a loan agreement with a partner bank and receive funds
- Implement your energy efficient project
- Benefit from reduced energy consumption.
Which banks are partners of the program?
The funds are distributed between two financial institutions: Ukrgasbank received 4 million euros, Bank Lviv – 3 million euros. Both banks have established environmental and social responsibility procedures, so they offer excellent expertise in quality lending to small and medium-sized businesses.
“Within the Fund, we administer a large number of financial instruments that can help businesses.
So we expect that businesses will be able to get both investment support under the “Add Energy to Your Business” program and access to other programs to compensate for the interest rate or the body of the loan.
This synergy will make lending truly accessible for business,” he emphasized Andriy Gapon, executive director of the Entrepreneurship Development Fund.
You can learn more about energy efficiency and possible investment projects within the program from the recording Broadcast of the presentation of the “Add energy to your business” program.
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