Olena Pavlenko: Ukraine needs a Marshall Plan for future programs in the energy sector
Due to the destruction of Ukrainian infrastructure by the Russian Federation during the war and the reduction of payments in the market, the domestic infrastructure needs support. It was told during the discussion “Bolstering Ukraine’s Wartime Economy and Planning for Recovery: The Ukrainian Perspective” by the president of the analytical center DiXi Group Olena Pavlenko.
This event of Open Society Foundations presents Ukrainian perspectives on the impacts of the war and recommendations to the international community on how best to support Ukraine through this horrific conflict, and onwards to reconstruction and eventual recovery.
“Regarding the short-term assistance, the Ukrainian energy sector needs liquidity. The volume of payments on the market decreased by approximately 60%. Now Ukraine’s electricity market needs about 250 million EUR of support every month”, Pavlenko said.
There are three sources for raising money: the support of international financial institutions against the background of projected impoverishment of consumers after the war, revenues from electricity exports to EU countries, and the direction of “frozen” Russian assets.
Also, in the short term, Ukraine needs assistance with technical components, fuel, and materials that allow Ukrainian energy companies to quickly repair the energy system from physical damage.
“For these purposes, the Energy Community Secretariat has set up the Ukraine Energy Support Fund to which all interested donors can make donations. The fund is already working, a few days ago the first tranche was sent by the Danish government. If anyone in the audience wants to provide emergency financial support, I can contact the Energy Community Secretariat”, Pavlenko commented .
But there are also plans for a long-term perspective.
“In the long run, Ukraine plans to do more than just restore the energy sector to its pre-war state. Moreover, some assets would be impossible to rebuild – new ones should emerge from scratch. Both the Ukrainian government and experts support a strategy of “green” recovery, with the goals of decarbonization and reducing energy consumption”, emphasized the expert.
Therefore, Ukraine needs a Marshall Plan in the energy sector for future programs.
“How these programs can be designed? First, Ukraine must be perceived by the European Union as part of the internal European community. This means having access to EU internal funds, being exempted from CBAM (or having a comprehensive mitigation period), participating in the EU-wide initiatives and programs focused on the European Green Deal (such as LIFE). Secondly, Ukraine should be able to implement debt swaps for decarbonization and green economy programs, following the example of other countries – like Jamaica, Belize, and Seychelles. This tool would be definitely only supplementing, yet important one for environmental and climate actions. Special funds could be established either in Ukraine or abroad, and the main demand for them should be minimal bureaucracy and maximum transparency. Third, Western countries can develop their own programs to support national investors to invest in Ukraine’s green recovery”, concluded Pavlenko.
The representative of DiXi Group think tank took part in the discussion within the project ”Support to the decarbonization of Ukraine’s economy through the development of new financing models through the use of debt”.