Key points on sustainable finance in the post-war Ukraine from Sergiy Maslichenko’s presentation at Sustainable Finance Forum.

Ukraine is at war and we face huge challenge to rebuild Ukraine’s economy. Business as usual approaches do not work. Several important issues to consider:

1)    Source of funding
–       By far the largest share of funding will come from public sources – donors support programmes, grants, state guarantees, state aid etc
–       Private investors during the war or straight after (1-2 years) will not provide meaningful capital without some form of de-risking
–       So, it is important to use effectively public funds in order to leverage much larger but more risk-averse private capital through various blending instruments – guarantees, co-financing with IFIs, co-investments, concessional financing etc

2)    Role of private sector in rebuilding Ukraine
–       Ukraine has no much experience in terms of efficient use of public funds, several large infra projects via PPPs were implemented only recently. This capacity has to be enhanced urgently with the help of donor community
–       Private sector can and should play a larger role in rebuilding Ukraine as it is more efficient, result-driven and more diverse in terms of propositions

3)    Investments have to be sustainable in the long-term, not just targeting short-term goals to address emergency. Longer term considerations like sustainability, energy independence, climate impact and climate resilience have to be incorporated in the decision making to avoid stranded assets problem

4)    A special key program such as “Build Back Greener” should be developed with the help of international donors and private sector players and become an anchor for future assistance. Good coordination and leadership among donors/IFIs is a key

5)    Key priority areas to focus financing to make it sustainable:
– Decarbonise the grid with renewables and storages (including bioenergy)
– Decentralise energy supply based on RE and storage
– Green cities and infrastructure – buildings (new constructions and energy retrofitting, solar roof PVs, heat pumps, boilers replacement), urban transport based on EVs, waste management facilities
– Scale up climate-smart agriculture
– Provide additional targeted support for all other low-carbon activities