Kyiv, Ukraine, October 28, 2019 – OTP Leasing, a member of Ukrainian Union of Lessors, receives a funding package of $ 50 million from IFC, a unit of the World Bank Group into sustainable energy, especially for small and medium-sized enterprises.
Ukraine is one of the most energy-intensive economies in the world, partly explained by its large industrial base with largely outdated and inefficient production technologies. Improving efficiency on the supply side in the energy sector, increasing the share of renewable energy and improving end-user energy efficiency is extremely important to sustain Ukraine’s economic growth.
Long-term financing – currently limited in Ukraine, especially for small and medium-sized enterprises – will enable businesses to buy energy-efficient equipment and upgrade their facilities through modern technology while contributing to reducing the carbon footprint. The first investment to mitigate the effects of climate change provided by IFC to Ukraine’s leasing sector consists of the equivalent of US $ 20 million from its own IFC account, US $ 20 million from Climate Investment Funds and a syndicated loan equivalent to US $ 10 million.
“Historically, the lack of long-term financing has limited the ability of businesses, especially small and medium-sized businesses, to finance the acquisition of modern technology and equipment,” said Andrey Pavlushin, CEO of OTP Leasing. “Our collaboration with IFC aims to change that and encourage the private sector to invest in sustainable technologies.”
Today, the Ukrainian leasing market is not fully realizing its business support potential, especially for small and medium-sized enterprises. At the same time, sustainable energy financing and leasing form the perfect combination, since leasing products for businesses are specifically targeted at different types of energy efficient equipment and technology.
“Investing in climate change mitigation and sustainable growth is one of IFC’s priorities in Ukraine,” said Georgina Baker, IFC Regional Vice President, Europe and Latin America. – The first IFC green leasing project in Ukraine aims to stimulate growth of the country’s leasing sector, especially among small agricultural players and entrepreneurs. It will also help attract other investors, which will ultimately strengthen the climate finance market in Ukraine, improve access to finance and create jobs. ”
The IFC is also currently implementing an advisory project aimed at developing new areas of green finance in Ukraine. The Green Financing Program in Ukraine is helping to increase investment in energy efficiency and renewable energy. Over the last four years, the project has helped provide green loans equivalent to $ 800 million.
Climate investment funds
Climate investment funds are unique financial instruments designed to initiate transformational change and the transition to low-carbon and climate-resilient countries through increased funding from multilateral development banks, including IFCs. The FCI funding for this project was provided through the Clean Technology Fund. The Clean Technology Fund provides incentives for developing countries to implement low-carbon technologies with significant potential for the long-term avoidance of greenhouse gas emissions. More information: www.climateinvestmentfunds.org .
More information about OTP Leasing: www.otpleasing.com.ua
IFC
IFC, a subsidiary of the World Bank Group, is the largest global development institution focused on supporting the private sector in emerging markets. We work with more than 2000 private companies worldwide, leveraging our capital, expertise, and influence to create markets and opportunities where we need them most. In the fiscal year 2019, we provided over $ 19 billion in long-term funding to developing countries, enhancing the ability of the private sector to overcome poverty and improve overall well-being. For more information, see www.ifc.org