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Nordic Environment Finance Corporation (NEFCO) suspends funding for new renewable energy projects in Ukraine due to non-compliance with government agreements. The corresponding letter from NEFCO was published by the European-Ukrainian Energy Agency.

NEFCO points out that one of the reasons for stopping funding is the Cabinet's plans to introduce an additional excise tax on electricity produced from renewable energy sources. EUEA received an official letter from NEFCO in which the international financial organization expressed its disappointment with energy policy of Ukraine regarding the issues:

  • retrospective reduction of the “green” tariff for already approved projects;
  • non-fulfillment of payment obligations by the Guaranteed Buyer to clean energy producers;
  • introduction of excise tax on electricity from REI.

For the above reasons, NEFCO has decided to stop investing in new projects in the renewable energy sector in Ukraine until a stable and predictable investment environment is established and the Government of Ukraine adheres to its commitments.

NEFCO will continue to develop and fund municipal projects in sectors such as energy efficiency, district heating and wastewater treatment.
It is noted that special attention is paid to small and medium-sized municipal projects. The report states that the financing of municipal sector projects in the Eastern European region is one of the three main areas of NEFCO's strategy for the next five years.