EBRD prepares to finance some bioenergy projects in Ukraine under program with cost nearing $55 mln

KYIV. May 31 (Interfax-Ukraine) – The European Bank for Reconstruction and Development (EBRD) is working on a number of projects under the Sustainable Bioenergy Value Chain Innovation Programme with the cost of about $55 million, program manager Kyrylo Tomliak has said.

"Particular bioenergy projects are now in the bank at the stage of developing feasibility studies aimed at proceeding with their financing and implementation in the future. These projects relate to the generation of electricity and heat from biomass and biogas, associated with the use of agricultural waste," Tomliak told Interfax-Ukraine at a conference held by the State Agency on Energy Efficiency and Energy Saving of Ukraine devoted to the development of bioenergy.

According to him, the EBRD programme to support bioenergy with a lending volume of about $55 million was opened at the end of 2019 and is designed for four years.

"There is interest in it, there are many applications. The challenge is to find a project that is interesting enough from all sides," he said.

Tomliak said that within the framework of the EBRD programme, the bank is ready to finance projects worth EUR 3 million. To finance cheaper projects, the bank can attract partners. The bank is also ready to cover up to 90% of the feasibility study.

He added that the bank can provide grant financing, but for the projects that already have borrowed. At the same time, the grant can be up to 20% of the project cost, but not more than $0.5 million.

"The average cost of potential projects is $5 million," he said.

At the same time, Tomliak said that the funding for the programme is not project funding, that is, it provides for collateral. He said that this somewhat constrains interest in it.

Nevertheless, in the face of rising gas prices, interest in the development of bioenergy is also growing.

Assessing the prospects for issuing loans for the cultivation of energy crops, the program manager said that there is not yet a sufficiently large investment object in the portfolio of potential projects for financing.

"This industry is not yet at the stage of development when we can talk about large projects," he said.

At the same time, Tomliak said that the bank would consider projects for the construction of heat supply facilities using biomass.

At the same time, he called the development of the biomethane market promising.

"As a program manager who is engaged in the development of bioenergy, I believe in biomethane, I believe that it is a promising thing. Moreover, the infrastructure for its use is already in place, we need to learn how to properly produce it in a sustainable way and manage it. It will depend on the parliament, government how it develops," Tomliak said, expressing his opinion.

At the same time, he said that the first projects would provide for the export of biomethane to Europe, although there is a prospect of its use in transport and for the production of heat and electricity.

"For our part, we initiated a special study to more clearly define the Ukrainian potential of biomethane and deal with barriers, as well as calculate the budget. We are in the process, we will calculate carefully and share our best practices," Tomliak said.

According to him, it is necessary to adopt appropriate legislation, removing technical and regulatory barriers to the development of the biomethane market.

"It is necessary that the notion "biomethane" appears in Ukrainian legislation. And that in parallel, an economy appears behind it. It, as a rule, appears when additional support mechanisms appear or the price of conventional energy sources grows," Tomliak said, adding that the potential of biomethane is significant, "everything should work effectively to implement it in the near future."