Capacity Building and Assessment of ESCO Projects – Ukragasbank

Ukrgasbank (UGB) is a state-owned bank in Ukraine and the fifth largest bank in the country. Ukraine’s development agenda has prioritized improving access to finance for energy service companies (ESCOs) since 2015. UGB identified a resurgence in the demand for ESCO financing paired with ongoing preparatory efforts by the government to promote ESCO projects. 

To improve its capacity in providing ESCO financing and to stay ahead of the national curve, UGB identified the need to further strengthen staff skills in the assessment and underwriting of ESCO projects and approached the Green for Growth Fund (GGF) Technical Assistance Facility (TAF) to support it in this endeavour.

Econoler was selected to support UGB in increasing its capacity in assessing ESCO projects. 

Under this mandate, Econoler performed the following activities:

• Initial assessment: Econoler developed a needs assessment establishing the existing level of knowledge of UGB teams about energy efficiency (EE) and ESCOs, conducted an ESCO market analysis and a regulatory and policy review related to EE and ESCO projects, assessed how regulations impact the market, and identified any gaps or areas that require improvement; 

• Case study review: A review was conducted on the contractual terms and conditions of two ESCO projects, which encompassed: Technical due diligence on the feasibility of the different technologies and energy-saving measures included in the projects; a review of the proposed arrangements between the ESCO and the industrial facility owner (host); and a review of the proposed financial scheme;

• Development and delivery of tailored online workshops: Econoler developed the workshop materials based on the results of the initial needs assessment, the case study review, and Econoler’s experience. Econoler conducted a series of workshops in September 2024 for relevant staff and introduced tools such as RETScreen to technically assess EE projects;

• Follow-up Q&A session: Econoler organized a follow-up session during which trained bank staff asked questions, sought clarification on complex topics encountered after the workshops, and discussed other challenges related to ESCO project assessment and underwriting;

• Final report and recommendations: In addition to a summary of the mandate, a final report provided best practices on various topics including financial analysis, monitoring, and the shared-savings model. 

Thanks to Econoler support, UGB enhanced its internal capacities in assessing ESCO projects based on financial, risk, and technical aspects.