The USAID Energy Security Project (USAID ESP) will help ten Ukrainian cities develop new district heating (DH) schemes and investment plans to modernize their heating networks. This will be achieved under the program helping municipal stakeholders implement reforms aimed at technical optimization, higher economic efficiency, and the environmental safety of heat supply systems. This program is being implemented by ESP jointly with the Ministry of Territories and Communities Development of Ukraine (MinRegion). The program includes a pilot phase that will involve ten cities and their communal DH companies and then disseminate experience gained across other cities in Ukraine.
The first four cities selected for the pilot phase are Kropyvnytskyi, Slavutych, Mariupol, and Zaporizhzhia. The cities were selected based on the following criteria:
- Cities’ preparedness to provide municipal guarantees for projects aimed at reforming the DH sector,
- Local municipal DH companies’ preparedness to act as the driving force for future reforms,
- International institutions’ preparedness to fund the reforms,
- Energy management systems already in place, and
- DH constituting a significant share of the city’s general heat supply system.
The next six partner cities are Dnipro, Lutsk, Severodonetsk, Kherson, Khmelnytskyi and Poltava which were all competitively selected in March 2021.
The program was launched following the signing of the Memorandum on Cooperation by USAID ESP and the first four partner cities in March-April 2021. Since then, Kropyvnytskyi, Slavutych, Mariupol, and Zaporizhzhia have made the first practical steps on the path to modernize their networks based on the newly adopted Methodology for Development of Heat Supply Schemes of Residential Settlements of Ukraine approved by MinRegion in October 2021.
Throughout the pilot phase, USAID ESP will support the development of a heat supply scheme and a long-term heat supply strategy and will help identify priority investment projects to improve the heat supply systems in each of the partner cities. In order to support these priority investment projects, USAID ESP will help the cities develop the project concepts and budgets, assess any potential investment effects, and identify all potential funding sources.
As USAID ESP Deputy Chief of Party Sergii Gorbachov noted: “This cooperation with the pilot cities will create a basis to disseminate the experience of setting technically and energy efficient, financially sustainable, and environmentally safe municipal heat supply systems across the whole of Ukraine. This cooperation is of the highest importance for these cities—it will enable long-term heat supply planning in the context of general urban development and the modification of current heat sources where necessary. It will help the cities project the technological development of their heat supply complexes, plan additional energy efficiency interventions, and manage the demand for heat. In all, with support from USAID ESP, this program will help the cities reduce specific energy consumption and technological losses along the whole heat supply chain, mitigate any adverse environmental effects, and end up with a more reliable, safer, and better quality heat supply system. Obviously, the local residents will be the first winners. They will have qualitatively better heat supply services at an acceptable cost.”