Experts from DiXi Group, together with project partners, have analysed how municipalities can prepare energy projects that meet the expectations of banks, donors, and private investors before financing decisions are made. The analysis was carried out within the framework of the ANEW-LIFE project, “Addressing the Needs of Clean Energy Transition Willingness of Ukrainian Cities Leveraging Innovative Financing Examples and Measures”.
The experience gained through cooperation with the pilot municipalities of Zhytomyr, Kalush, and Nizhyn demonstrates that the approach to attracting investment has changed significantly over recent years. Whereas previously a promising project idea or a list of required equipment could often be sufficient, investors today primarily assess a municipality’s ability to strategically plan its energy transition and ensure high-quality project implementation.
In practice, every potential investor or financial institution seeks answers to three fundamental questions:
- Why does the community need this project?
- Is it technically and economically sound?
- Will the investment deliver the expected results?
These criteria now underpin the assessment of most municipal energy projects, regardless of the financing source.
“Today, investments are directed not simply to municipalities, but to well-prepared projects. This is why strategic vision, sound technical calculations, a robust financial model, and comprehensive risk assessment have become just as important as identifying potential funding sources,” said Victoria Kovalenko, Sustainability General Manager at DiXi Group.
This is precisely the approach that DiXi Group applies while supporting the energy projects of the pilot municipalities under the ANEW-LIFE project.
Strategy Comes Before Individual Project Ideas
One of the first aspects investors evaluate is whether a project is aligned with a municipality’s strategic planning documents.
Following the adoption of the Law of Ukraine “On Energy Efficiency” and the introduction of the methodology for developing Municipal Energy Plans (MEPs), Ukrainian municipalities have gained a structured framework for long-term energy planning. Today, Municipal Energy Plans should serve as the starting point for preparing investment-ready energy projects.
For investors and financial institutions, this demonstrates that a municipality has a clear development strategy, understands its priorities, and can justify the need for investment.
Data, Analytics, and a Financial Model
Reliable baseline data and robust analytical work are equally important components of project preparation.
Energy audits, energy consumption analysis, infrastructure condition assessments, and technical and economic feasibility studies help determine potential energy savings, cost reductions, emissions reductions, and expected payback periods.
A comprehensive financial model plays a particularly important role. It enables investors to understand the overall project cost, potential financing sources, expenditure structure, associated risks, and the financial commitments of all parties involved.
From Pilot Municipalities to Practical Solutions
Within the ANEW-LIFE project, the municipalities of Zhytomyr, Kalush, and Nizhyn have become practical testing grounds for developing approaches to preparing investment-ready municipal energy projects.
According to the project’s partners, all three municipalities demonstrate a strong level of institutional capacity to implement modern energy solutions. They have dedicated teams, continue strengthening their energy management systems, actively participate in international initiatives, and consistently advance their municipal energy planning processes.
“Our objective goes beyond preparing individual projects for the three pilot municipalities. We are developing practical approaches that will enable communities to adapt different financing mechanisms to their specific needs and subsequently replicate these solutions in other municipalities across Ukraine and the European Union,” Victoria Kovalenko emphasized.
What Drives a Successful Energy Transition?
According to DiXi Group experts, a successful green transition depends not only on access to financing or advanced technologies.
Key success factors include:
- strong political leadership and commitment from local authorities;
- professional teams supported by effective energy management systems;
- high-quality data and strategic planning;
- readiness to engage with investors, donors, and financial institutions;
- a pipeline of well-prepared projects supported by preliminary technical and financial assessments.
Together, these elements create the foundation for successful implementation of municipal energy projects and significantly improve opportunities for attracting investment to support local recovery and sustainable development.
