The Ukraine Energy Support Fund will pool international support to restore and rebuild energy infrastructure damaged by Russia’s invasion.
The Energy Community Secretariat, Ministry of Energy of Ukraine, and the USAID Energy Security Project signed a memorandum of understanding, appointing the USAID Energy Security Project as an independent procurement agency for the Ukraine Energy Support Fund. The Ukraine Energy Support Fund will act as a transparent and speedy vehicle to mobilize international support to help rebuild Ukraine’s critical infrastructure. As the lead procurement agent, the USAID Energy Security Project will secure critical equipment to meet the immediate needs of Ukraine’s energy sector, including rebuilding infrastructure damaged as a result of Russia’s invasion.
Russia’s unprovoked and unjustified invasion of Ukraine has caused catastrophic damage to Ukraine’s energy infrastructure, with suppliers struggling to provide electricity, heat, and hot water to homes, businesses, hospitals, and schools. Ukrainian energy utilities face growing demands to repair and restore transmission and distribution networks, including power substations, damaged by Russia’s aggression. To meet this growing demand, the Energy Community Secretariat established the Ukraine Energy Support Fund at the direction of the Ministry of Energy of Ukraine to consolidate and coordinate contributions from donors, investors, and the private sector to repair and rebuild Ukraine’s energy sector.
Under the terms of the joint MOU the USAID Energy Security Project, will provide efficient and transparent procurement services for the Ukraine Energy Support Fund, establishing a supply chain of critical equipment to meet the immediate needs of Ukraine’s energy utilities, suppliers, and technicians.
“Donors to the Ukraine Energy Support Fund require a transparent mechanism to procure key infrastructure, goods and services urgently needed by Ukrainian energy companies. With this Memorandum of Understanding, the Energy Community Secretariat, which acts as the fiduciary of the Fund, takes a concrete step to help rebuild Ukraine’s energy sector as fast as possible in collaboration with the Ministry of Energy of Ukraine and USAID’s Energy Security Project,” said Artur Lorkowski, Director of Energy Community Secretariat.
Ensuring a transparent, efficient, and market-driven energy sector has been a longterm goal of USAID in Ukraine. Since 2018, the USAID Energy Security Project has worked with the Government of Ukraine to strengthen the energy security and promote greater energy independence, increase transparency in the energy sector, and facilitate the physical and commercial integration of Ukraine’s energy systems into those of the European Union. Since the start of Russia’s full-scale war against Ukraine, USAID has worked closely with the Government of Ukraine and energy sector companies to ensure operation continuity of Ukraine’s electricity, gas and heating networks.
“This year, Ukraine will be facing the most challenging heating season in decades. Invading russian troops are destroying critical energy infrastructure, leaving hundreds of thousands of Ukrainian families without electricity. Energy workers, exhibiting outstanding fortitude and bravery, sometimes at risk to their lives, bring electricity back into Ukrainian households. However, to ensure a stable heating season in the conditions of war, it is necessary to carry out repair works as quickly as possible. Our joint efforts with the Energy Community Secretariat and the USAID Energy Security Project related to the transparent disbursement of the Ukraine Energy Support Fund will contribute to the prompt supply of quality equipment to restore the damaged critical infrastructure. The support of our partners will be one of the key factors in delivering a sustainable heating season amid russian military aggression, with our energy facilities under shelling, massive destruction of grids and energy equipment,” said Deputy Minister of Energy of Ukraine Yaroslav Demchenkov.
Through close collaboration with the USAID Energy Security Project, Ukraine’s national electricity company, Ukrenergo, successfully disconnected from the Russian grid in the hours before the beginning of the invasion, and on March 16, 2022, Ukraine and Moldova successfully completed emergency synchronization with the European electric power system (ENTSO-E). USAID continues to support Ukraine as it seeks longer-term energy security and moves towards market-oriented energy policies to achieve full integration with Europe.
“For decades, USAID has helped Ukraine build a stronger, more secure, and more independent energy sector. This is a cornerstone of its long-term development,” said USAID/Ukraine Mission Director James Hope. “Ukraine’s energy sector is resilient. It has continued functioning despite large-scale infrastructure damage caused by Russia’s brutal war. Through the Ukraine Energy Support Fund, we will help Ukraine quickly procure the state-of-the-art equipment it needs to repair and rebuild key infrastructure. This will help keep electricity and gas flowing while advancing integration with its European neighbors,” said James Hope, USAID Mission Director in Ukraine.
Due to Russia’s extensive bombing of Ukraine’s infrastructure, many of the country’s power plants, transmission lines, substations, and other energy assets need to be either replaced or restored. The Ukrainian people are in need of electricity, gas, hot water and heat, and these critical needs must be met through a fast and efficient procurement mechanism. The USAID Energy Security Project Team is honored and ready to take on this new task of ensuring the Ukraine Energy Support Fund can deliver needed emergency equipment, as well as critical infrastructure materials for the mid and long term.