Malyn on Track with Ukraine’s First Energy Efficiency PPP

Malyn city officials are on track for launching Ukraine’s first energy efficiency Public Private Partnership, expected to save nearly 250,000 cubic meters of gas, cut energy costs by approximately 10 percent, and reduce carbon emissions by over 11,000 tons. More than 1,600 students and teachers will benefit from more reliable and efficient heating.                  

Malyn, a city of 27,000 in Zhytomyr Region, submitted a PPP feasibility study and appraisal to the National PPP Unit within the Ministry of Economic Development and Trade earlier this week, demonstrating how private sector participation in the energy sector can make cities more resilient to budget constraints while making Ukraine more energy independent. The tender is expected to take place later this year.

The project envisions using a renewable biofuel, straw pellets, in place of natural gas. USAID’s Public Private Partnership Development Project structured the transaction, brokered negotiations between government and the private sector, and drafted the PPP contract and tender documents. The project, if successful, will also demonstrate both the feasibility of using biofuel and engaging the private sector in solving Ukraine’s pressing energy challenges.

Example of straw pellet boiler in Poland:

Ukraine, an agricultural powerhouse, has an abundant supply of the raw material, a by-product of grain crops. Today, much of this is wasted. By converting the straw into concentrated pellets and burning them as fuel, Ukraine can reduce its dependence on gas imports. An additional bonus is that they do not contribute to greenhouse gas emissions, as carbon released from burning equals the carbon absorbed by crops as they grow. Fossil fuels, however, release carbon that was captured millions of years ago.

With budgets under pressure across the country, Ukraine needs to explore alternative fuel sources. Taking advantage of this renewable biofuel could make Ukrainian cities more resilient and energy independent, and save them cash in the process. A successful biomas PPP in Malyn could show the way forward.