Comment regarding Nefco’s investments in Ukraine

There are currently public discussions ongoing in Ukraine about the renewable energy sector, green tariffs and proposed new taxes. In relation to that, Nefco has been asked for comments by the European-Ukrainian Energy Agency in June 2021. The  topic was also on the agenda during a meeting with journalists in Kyiv in December 2020, see press release from 2 December 2020.

There have been some misinterpretations related to Nefco in recent articles about the same subject and therefore we wish to clarify the matter.

Nefco has already in 2020 decided to stop investing in new projects in the renewable energy sector in Ukraine due to the green tariff situation, which hasn’t been solved yet. Nefco is disappointed that the Ukrainian government is cutting the green tariffs retroactively for projects already approved. This has a negative effect on attracting new investments and on Ukraine’s transition to clean energy and energy independence. A predictable and sustainable framework is needed.

In addition, Nefco believes that introducing an excise tax on renewable energy is a step in the wrong direction. In fact, clean energy should be subsidised, whereas fossil energy should be subject to a CO2 tax. The reason for not investing in new renewable energy projects is however based on the green tariff agreements not being fulfilled.

Nefco will however continue to develop and finance municipal projects in sectors such as energy efficiency, district heating and wastewater treatment to support the sustainable development in Ukraine. Special focus is on small-and medium-sized municipal projects and projects with demonstrational effects to respond to technological developments and priorities by Ukraine and Nefco’s owners, the Nordic governments. Financing municipal sector projects in the Eastern European region is one of the three focus areas in Nefco’s strategy for the next five years. Read more about our strategy.

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