Near Lake Syvash on the border of Crimea, a 250-Megawatt wind farm is being erected. When the project is fully implemented, 64 wind turbines will deliver energy corresponding to the consumption of 100,000 households. During the construction phase the project has created approx. 300 jobs, and in future it will employ 50 people.
Reduction in CO2 emissions is expected to be 7.6 million tons CO2e in the project’s lifetime.
Co-financing from the Neighbourhood Energy Investment Facility
The total project cost of Syvash Windfarm is DKK 2.8bn, of which IFU has contributed DKK 112m in loan financing. DKK 25m from the Neighbourhood Energy Investment Facility for Ukraine and Georgia, financed by the Neighbourhood Programme under the Ministry of Foreign Affairs is included in IFU’s investment. The objective of the facility is to support the energy efficiency strategies of the two countries.
Positive development impact
Syvash Windfarm is being established in an area currently used as farmland. The project will create jobs for young people in particular, who would otherwise leave the area due to lack of job opportunities. Furthermore, the project will improve the local infrastructure and develop competences within in state-of-the-art green technology. The project is being headed by a Danish project director with great experience from Vestas, among others.
During the due diligence process, the potential impact on people and the environment has been evaluated, including effects on bird migration, work environment and possible hazards to the nearby local community in the form of dust and noise as well as access to grazing areas. The necessary precautions have been taken to mitigate these effects and to ensure that the project complies with international standards.
First and foremost, IFU makes an important financial contribution to the project.
“The participation of IFU and other development finance institutions is crucial, as it is virtually impossible to obtain loan financing from commercial banks for this type of project in Ukraine.”
Victoire Potel, Project Finance Director at one of the majority shareholders, Total EREN.
Important support to the Ukrainian energy sector
Ukraine is highly dependent on fossil fuel, which is challenging to the poorest country in Europe, geopolitically as will as financially. Renewable energy only makes up 2 per cent of the country’s energy mix. IFU’s investments in wind and solar projects are therefore an important contribution to the green transition of Ukraine and the country’s ambitious strategy that renewable energy sources must make up 25 per cent of the total energy supply in 2025.
Including the Syvash investment, IFU’s portfolio of renewable energy projects in Ukraine at the end of 2019 is expected to be at 500 Megawatt, supported by the funds made available through the Neighbourhood Programme.