The EBRD is promoting investments in innovative technology and best practices associated with the use of agricultural waste in Ukraine by providing sustainable energy financing in line with its strategy for the country.
A senior long-term loan of up to EUR 15 million will be provided to I&U Group, a vertically integrated agricultural holding engaged in crop farming and sugar production in Ukraine. The funds will be used to finance the development, construction and operation of a 6 MW biogas plant located in Kirovohrad region of central Ukraine, the EBRD said.
The financing package will consist of a EUR 13 million loan from the EBRD and a EUR 2 million concessional loan from the Clean Technology Fund (CTF) designed to support renewable energy and technology aimed at reducing carbon intensity. This will be the first project supported under the Ukraine Agribusiness Waste Residues Window, funded by the CTF.
This will be the first facility in Ukraine to use an innovative biogas production technology, which will reduce energy consumption. The remaining residues of the biogas process will be used as bio-fertilisers, partially replacing the use of chemical fertilisers. The project will result in a total reduction of 24,000 tonnes of CO2emissions annually.
The project will benefit from a US$534,800 incentive grant from the EBRD's Finance and Technology Transfer Centre for Climate Change (FINTECC) programme, funded by the Green Environment Facility and designed to transfer technology in the area of climate change mitigation and adaptation, as well as a EUR 22,150 grant from the European Union's Neighbourhood Investment Facility. A significant part of the legal due diligence cost will be covered by grant funding from the Japan-EBRD Cooperation Fund (JECF).
The EBRD is the largest international financial investor in Ukraine. To date, the Bank has made a cumulative commitment of almost EUR 12.1 billion across some 400 projects since the start of its operations in the country in 1993.