The total investment for the project will be €12.7 million. Danida Sustainable Infrastructure Finance (DSIF) investment grant is €4.45 million, the Northern Environmental Finance Corporation (NEFCO) loan – €6 million, and Kremenchuk′s own contribution is about €2.25 million.
In addition, the DSIF will contribute €350 thousand for technical assistance during project implementation. The grant funding will be paid directly to the contractor selected in accordance with NEFCO general procurement procedures.
According to the agreement, 2 boiler houses will be built in the Kremenchuk district of Rakivka, one of which will run on local biomass. That will reduce carbon dioxide emissions by 10.5 thousand tons. The project will provide heating to about 25,000 residents of the district, which is 10% of consumers of centralized city heating. Boiler houses should be put into operation already in the heating season of 2022-2023.
The city of Kremenchuk in cooperation with NEFCO already has experience in investment cooperation. The Nordic Environment Finance Corporation, established by five Nordic countries, has helped the city develop an investment project in energy-efficient street lighting.
The DSIF in Ukraine offers subsidised loans to infrastructure projects with the minimum contract amount of DKK 100 million (€13,5 million).
An intergovernmental Framework Agreement* on general conditions and procedures, institutional arrangements and financial terms for the implementation of the DSIF in Ukraine was signed in 2019. The legal basis for its implementation was created in November 2020. The Kremenchuk’s project became the first investment of this program in Ukraine. Potential projects in Lviv and Zaporizhia are currently being considered.
* Automatic Google-translation into English
Photo Credit: Kremenchuk City Council