14 Mar 2019
EUR 102.26 million
Financial institutions and SMEs
Cooperation between NIB and the Nordic Environment Finance Corporation (NEFCO) in improving energy efficiency at Ukrainian universities is forging a new working model for the two sister organisations. “We support each other in areas where it would otherwise be more difficult to achieve positive results without this cooperation”, says Magnus Rystedt, NEFCO’s Managing Director, in an interview with NIB Newsletter.
NIB and NEFCO’s alliance with the focus on environmental improvements in the neighbouring areas dates back to 1990, when NEFCO was established. Back then, NEFCO was focusing on environmental investments and small and medium-sized projects in the Baltic region.
Since then the cooperation has been expanding into new domains—new sectors and regions. Late last year, NIB and NEFCO marked the opening of a wastewater treatment plant in Petrozavodsk, Russia (a project both organisations had been working on since 2012) and embarked on financing an energy efficiency programme in Ukraine.
“Both projects will have a lasting, positive impact on the environment in the neighbouring areas of our member countries”, says Mr Rystedt.
NIB’s EUR 30 million loan to NEFCO was signed in December 2017. This financing is being onlent by NEFCO to the Ukrainian Ministry of Finance, partially guaranteed by the Swedish International Development Cooperation Agency. The ministry, in turn, is distributing funds to universities in Kharkiv, Kiev, Lviv, Poltava, Chernihiv, Sumy and Vinnytsia to renovate and improve the energy efficiency of their buildings. The improvements are expected to extend the lives of the university buildings and reduce energy costs.
“This is an example of how the Nordic NEFCO and the Nordic–Baltic NIB can complement each other in important and prioritised projects. It shows the strengths of both institutions: NIB’s ability to provide long-term capital, and NEFCO’s expertise in Ukraine”, Mr Rystedt continues.
“The way NIB and NEFCO are cooperating in financing the energy efficiency programme for Ukrainian universities is a very practical model: NIB funds our owners’ guarantees. Cooperation with NIB is very important for NEFCO. We support each other in areas where it would otherwise be more difficult to achieve positive results without this cooperation. This gives a rationale for the entire Nordic Finance Group.”
Mr Rystedt is looking forward to more of this cooperation. He believes the Nordic countries, “keen on international cooperation as a value, with priorities in the environment and development”, can make a big difference in Ukraine, elsewhere in Eastern Europe and beyond.
Currently, NEFCO has 150 ongoing projects in Ukraine, mostly in municipalities.
“The projects we are involved in in Ukraine and other countries are empowering local authorities and helping people embrace responsibility for the future of their communities. This is a milestone on the way to a stronger civil society. And it is a very important reason for us and our owners to engage in cooperation with our project countries.”
“We are working for long-term effects. NEFCO is often involved in the very early stages of environmental projects. In the longer term, we hope that the efforts being made now will boost the economy and trade. The real improvements these projects may bring are to be seen in some ten or more years, as we now see in the Baltics, where NEFCO was among the early movers in the 1990s”, says Mr Rystedt.