Since its launch in 2012, the DemoUkrainaDH programme has financed a total of 13 demonstration projects. Projects have been fully implemented in 10 cities: Berdychiv, Chernivtsi, Ivano-Frankivsk, Kamyanets-Podilskyi, Myrhorod, Oleksandria, Poltava, Ternopil, Vinnytsia and Zhytomyr. Projects in further three cities, Mykolaiv, Poltava and Uman, will be implemented during 2022. The final implementation activities are to be carried out in 2022; the programme is now closing for new activities and no new agreements will be made as of December 2021.

The DemoUkrainaDH programme was established by Nefco in cooperation with the Ministry of Regional Development, Construction and Communal Services of Ukraine with financial support from Sweden and the Eastern Europe Energy Efficiency and Environment Partnership (E5P) fund. The main objective of the programme is to demonstrate modern and energy-efficient district heating technology to improve energy efficiency and reduce CO2 emissions. Demonstrating best practices in technical design, procurement and implementation of small-scale repeatable district heating projects has been a priority for the programme.

The implemented projects have saved some 30% to 50% in yearly gas and electricity consumption. These savings reflect what can be achieved with clear intentions, strong partners, visionary support and a desire to make a difference on the ground. As a result of the investments, district heating companies have prevented thousands of tonnes of CO2 emissions by reducing gas usage. Another important benefit of the programme is that residents can now enjoy better indoor conditions and hot water supply.

“The need for investment in the modernisation of Ukrainian district heating systems is enormous. Many interesting and successful projects have been implemented within the programme. The projects show that significant improvements can be achieved with relatively limited efforts. But we can also see that the conditions for implementing improvement projects have become more challenging. Several projects have had to be cancelled during the final years of the programme, mainly for financial reasons, but also due to lack of support from municipalities. Frequent replacement of management in the district heating companies and municipalities has also added to the challenges.” commented Ronny Nilsson, Senior Adviser and Programme Manager for DemoUkrainaDH at Nefco.

The programme covered a number of measures, including installing individual heating substations, rehabilitating boiler plants, replacing pumps and boilers, water treatment, automation upgrades and other energy-efficiency improvements.

Since the establishment of the DemoUkrainaDH programme, approx. EUR 9.5 million has been invested in supported projects, of which approx. EUR 4.5 million has been loan financing from  Nefco, EUR 3.5  million provided as a grant contribution from Sweden and EUR 1.5  million provided as local contributions from cities (i.e. publicly owned DH companies). The financial payback of the projects is generally less than 8 years, although there are significant differences between individual projects, and for several projects the payback was only 2 years. This shows that the projects have been profitable for the DH companies.

About 40 procurement processes were carried out within the framework of the DemoUkrainaDH programme. Ukrainian companies were the most successful in the tender processes, and this success has increased the level of local experience and institutional capacity in the development and modernisation of Ukrainian district heating systems.

The DemoUkrainaDH programme aimed to collaborate closely with all parties involved during project implementation, such as district heating companies, suppliers, industry associations, etc. For example, several seminars were arranged over the course of the programme to increase cooperation in the field. During these seminars, research and experience sharing took place, providing training and discussions of lessons learned to tackle past and future challenges; these lessons are already being incorporated into future programme planning.

Building on the achievements of the DemoUkrainaDH programme, a new funding programme for the modernisation of district heating systems in Ukraine was launched in 2018. The Sweden-Ukraine District Heating (SUDH) programme recently signed its first project in Mariupol.

Read more about the new SUDH project in Mariupol

For further information, please contact:
Ronny Nilsson, Senior Adviser, District Heating and Programme Manager for DemoUkrainaDH
Ronny.nilsson@nefco.int, +358 10 618 06 42