"District Heating of Ukraine" Program

Joint Program of Ukrgasbank and EIB: Modernization and Restoration of District Heating
Ukrgasbank, together with the European Investment Bank (EIB), is launching the "District Heating of Ukraine" program to support Ukrainian communities. The program is aimed at supporting local self-government bodies and municipal enterprises. The program is guaranteed by the Ukraine Facility, European Union's financial assistance instrument for Ukraine. Our goal is the modernization and restoration of district heating infrastructure, increasing its energy efficiency, and ensuring the energy security of communities. The program involves not only financing but also expert support from international partners (UNDP and GOPA).
Key Financing Conditions
We offer affordable long-term financing for the implementation of energy-efficient projects, taking into account the financial advantage from the European Investment Bank and the European Commission.
Form of financing	Loan or Leasing
Loan amount	From EUR 40,000 to EUR 25 million
Financing term	Up to 20 years
Currency	Hryvnia (UAH) or Euro (EUR)
Indicative interest rate	In UAH: 1st year – 15.92%, thereafter floating rate (based on UIRD 3M + 2.76%) In EUR: 1st year – 4.83%, thereafter floating rate (based on EURIBOR 6M + 2.73%)
Who Can Participate	The program is oriented towards the public sector: Local self-government bodies (municipalities, village communities); Municipal enterprises (utility companies); Central government bodies of Ukraine and local state administrations.
Eligible Purposes for Funding	Financing is provided for projects involving the modernization and restoration of infrastructure.
Main directions	CHPs (Combined Heat and Power), cogeneration, and decentralized generation; Heating networks, heat pumps; Energy efficiency projects (exclusively in the district heating sector or for public buildings); Comprehensive building renovation (provided it is combined with energy efficiency measures); Enhancing physical security and cybersecurity of energy infrastructure; Project preparation and design documentation (can be financed if the project itself is funded under this program).
Grant Component	In addition to credit financing, the attraction of EU grant funds is envisaged. Priority: The program targets primary support for regions close to the frontline and de-occupied territories; Status: Launch of the grant component is expected in the first quarter of 2026.
Procurement Procedure	Procurement rules depend on the project cost: Projects up to EUR 5 million: The national procedure via the PROZORRO system applies; Projects over EUR 5 million: The international procedure according to EIB rules applies.
Restrictions	Funds cannot be used to finance: Extraction/processing of fossil fuels (coal, oil, gas); burning of mazut, peat; Gambling business, tobacco, alcohol, weapons; Activities that harm the environment or are carried out in protected areas; Financial speculation and refinancing of debts; Purchase of land and agricultural land (unless technically necessary for the investment); Payment of taxes (including VAT), duties, and other fees.
Program Partners	European Investment Bank (EIB); UNDP – provision of technical assistance during project preparation; GOPA AFC GmbH – consulting support for document verification.

Joint Program of Ukrgasbank and EIB: Modernization and Restoration of District Heating

Ukrgasbank, together with the European Investment Bank (EIB), is launching the "District Heating of Ukraine" program to support Ukrainian communities. The program is aimed at supporting local self-government bodies and municipal enterprises. The program is guaranteed by the Ukraine Facility, European Union's financial assistance instrument for Ukraine.

Our goal is the modernization and restoration of district heating infrastructure, increasing its energy efficiency, and ensuring the energy security of communities. The program involves not only financing but also expert support from international partners (UNDP and GOPA).

Key Financing Conditions

We offer affordable long-term financing for the implementation of energy-efficient projects, taking into account the financial advantage from the European Investment Bank and the European Commission.

Form of financing

Loan or Leasing

Loan amount

From EUR 40,000 to EUR 25 million

Financing term

Up to 20 years

Currency

Hryvnia (UAH) or Euro (EUR)

Indicative interest rate

In UAH: 1st year – 15.92%, thereafter floating rate (based on UIRD 3M + 2.76%)
In EUR: 1st year – 4.83%, thereafter floating rate (based on EURIBOR 6M + 2.73%)

Who Can Participate

The program is oriented towards the public sector:

Local self-government bodies (municipalities, village communities);
Municipal enterprises (utility companies);
Central government bodies of Ukraine and local state administrations.

Eligible Purposes for Funding

Financing is provided for projects involving the modernization and restoration of infrastructure.

Main directions

CHPs (Combined Heat and Power), cogeneration, and decentralized generation;
Heating networks, heat pumps;
Energy efficiency projects (exclusively in the district heating sector or for public buildings);
Comprehensive building renovation (provided it is combined with energy efficiency measures);
Enhancing physical security and cybersecurity of energy infrastructure;
Project preparation and design documentation (can be financed if the project itself is funded under this program).

Grant Component

In addition to credit financing, the attraction of EU grant funds is envisaged.

Priority: The program targets primary support for regions close to the frontline and de-occupied territories;
Status: Launch of the grant component is expected in the first quarter of 2026.

Procurement Procedure

Procurement rules depend on the project cost:

Projects up to EUR 5 million: The national procedure via the PROZORRO system applies;
Projects over EUR 5 million: The international procedure according to EIB rules applies.

Restrictions

Funds cannot be used to finance:

Extraction/processing of fossil fuels (coal, oil, gas); burning of mazut, peat;
Gambling business, tobacco, alcohol, weapons;
Activities that harm the environment or are carried out in protected areas;
Financial speculation and refinancing of debts;
Purchase of land and agricultural land (unless technically necessary for the investment);
Payment of taxes (including VAT), duties, and other fees.

Program Partners

European Investment Bank (EIB);
UNDP – provision of technical assistance during project preparation;
GOPA AFC GmbH – consulting support for document verification.

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