May 2018 This document was produced for review by the United States Agency for International Development

USAID(USAID). Municipal It was Energy prepared Reform by Project the USAID (MERP) Municipal Energy Reform Project in Ukraine. Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 1

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MUNICIPAL ENERGY

REFORM PROJECT (MERP)

REPORT FOR ACTIVTIES ENDED ON MARCH 31, 2018 AND HAND-OVER ACTION PLAN (HAP)

CLEAN ENERGY IDIQ: AID-OAA-I-13-00015

Contract: AID-121-TO-13-00006

August 2018

DISCLAIMER The authors’ views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government.

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Table of Contents

ACRONYMS ······················································································································ VII EXECUTIVE SUMMARY AND OUTLINE OF MERP ROLE AND DEVELOPMENTAL IMPACT ·············· 1 ACTIVITY 1. IMPROVE CLEAN ENERGY REGULATORY AND LEGISLATIVE ENABLING ENVIRONMENT ······································································································ 18 Task 1.1. Developing an Enabling Legislative and Policy Environment ...... 18 Task 1.2. Assistance to National Energy and Communal Services Regulatory Commission (NEURC) ...... 24 Task 1.3. Supporting Improvement of Social Safety Net for Vulnerable Population ...... 30 Task 1.4. Supporting Energy Efficiency Standards ...... 33 Task 1.5. Public Information and Awareness ...... 34 Activity 1 – Overall Results ...... 49 ACTIVITY 2. PROMOTE INVESTMENT IN CLEAN ENERGY TECHNOLOGIES AND APPLICATIONS ······································································································· 50 Task 2.2. Assisting Municipalities with Planning, Preparing and Financing Clean Energy Projects ...... 50 Task 2.3. Introduction of Energy Management Systems ...... 68 Task 2.4. Development Credit Authority Loan Guarantee ...... 73 Task 2.5. Support Mechanisms That Mobilize Private Sector Investment ...... 74 Activity 2 – Overall Results ...... 79 ACTIVITY 3. CAPACITY BUILDING AND DISSEMINATION ························································ 80 Task 3.1. Preparing a Local Nongovernmental Organization for a Direct Award from USAID ...... 80 Cross Cutting: Transparency and Disclosure in the Municipal Energy Sector ...... 85 Activity 3 – Overall Results ...... 87 ACTIVITY 4. ENHANCE CAPACITY OF THE GOVERNMENT OF UKRAINE IN LOW EMISSION DEVELOPMENT STRATEGIES ·················································································· 88 Activity 4 – Overall Results ...... 90 5. DONOR COORDINATION ································································································· 91 6. GOOD PRACTICES AND LESSONS LEARNED ···································································· 94 ANNEXES ······················································································································· 100 Annex 1. MERP Accomplishments under Task 1.1. Developing an Enabling Legislative and Policy Environment ...... 101 Annex 2. MERP Accomplishments under Task 1.2. Assistance to National Energy and Communal Services Regulatory Commission ...... 108

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan iii Annex 3. MERP Accomplishments under Task 1.3. Supporting Improvement of Social Safety Net for Vulnerable Populations ...... 115 Annex 4. MERP Partner cities and localities...... 118 Annex 5. List of contacts for MERP partner cities ...... 120 Annex 6. Subcontractors, grantees and consultants involved in implementation of MERP activities ...... 125 Annex 7. Handover of MERP activities to donors and IFIs ...... 137 Annex 8. Information on loans issued under DCA agreement with Bank Lviv ...... 141 Annex 9. MERP Accomplishments under Activity 4. Enhance Capacity of the Government of Ukraine in Low Emission Development Strategies ...... 143 Annex 10. List of deliverables and most important documents produced by MERP ...... 145 Annex 11. MERP Partner Cities Profiles ...... 159

iv USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan List of Tables

Table 1. SEAPs Status for Partner Cities...... 59 Table 2. Сlean Energy Investment Strategies and Projects Catalogues ...... 61 Table 3. Project Proposal Preparation and Implementation Support by Sector ...... 63 Table 4. New Project Proposal Preparation and Funding Mobilization from IFIs and Private Sector (by project year) ...... 64 Table 5. Energy Audits of Public and Residential Buildings in Odesa Oblast and Eastern Ukraine ...... 64 Table 6. Residential Sector Demo Projects ...... 65 Table 7. Demonstration Projects in Public Buildings ...... 67 Table 8. Funding Mobilization by Project Year ...... 68 Table 9. Summary Information on Energy Management System Implementation in Partner Cities ...... 71 Table 10. Development Credit Authorities Operations by Project Year ...... 74 Table 11. Energy Efficiency “Warm Loans” Program Disbursements 2015–2017 ...... 78 Table 12. NGO Capacity-building Subawards ...... 82 Table 1-1 Accomplishments for Task 1.1 ...... 101 Table 2-1. Accomplishments for Task 1.2 ...... 108 Table 3-1. Accomplishments under Task 1.3 ...... 115 Table 4-1. Accomplishments under Activity 4 ...... 143 Table 11-1. MERP Partner City Profile (Bahmut) ...... 161 Table 11-2. MERP Partner City Profile (Balta) ...... 162 Table 11-3. MERP Partner City Profile (Bilhorod-Dnistrovskyi) ...... 163 Table 11-4. MERP Partner City Profile (Bolhrad) ...... 165 Table 11-5. MERP Partner City Profile (Chernihiv) ...... 166 Table 11-6. MERP Partner City Profile (Chornomorsk) ...... 167 Table 11-7. MERP Partner City Profile (Dnipro) ...... 168 Table 11-8. MERP Partner City Profile (Dobropillya) ...... 171 Table 11-9. MERP Partner City Profile (Ivano-Frankivsk) ...... 172 Table 11-10. MERP Partner City Profile (Izmail) ...... 175 Table 11-11. MERP Partner City Profile (Kamianets-Podilsky)...... 176 Table 11-12. MERP Partner City Profile (Kharkiv) ...... 177 Table 11-13. MERP Partner City Profile (Kherson) ...... 178 Table 11-14. MERP Partner City Profile (Khmelnytskyi) ...... 180

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan v Table 11-15. MERP Partner City Profile (Kramatorsk) ...... 182 Table 11-16. MERP Partner City Profile (Kremenchuk) ...... 184 Table 11-17. MERP Partner City Profile (Kropyvnytskyi) ...... 185 Table 11-18. MERP Partner City Profile (Kryvyi Rih) ...... 186 Table 11-19. MERP Partner City Profile (Kyiv) ...... 188 Table 11-20. MERP Partner City Profile (Lutsk) ...... 190 Table 11-21. MERP Partner City Profile (Lviv) ...... 191 Table 11-22. MERP Partner City Profile (Luhansk Oblast) ...... 194 Table 11-23. MERP Partner City Profile (Mariupol) ...... 195 Table 11-24. MERP Partner City Profile (Myrnohrad) ...... 197 Table 11-25. MERP Partner City Profile (Odesa) ...... 198 Table 11-26. MERP Partner City Profile (Odesa Oblast) ...... 200 Table 11-27. MERP Partner City Profile (Pavlohrad) ...... 201 Table 11-28. MERP Partner City Profile (Pokrovsk) ...... 203 Table 11-29. MERP Partner City Profile (Reni) ...... 204 Table 11-30. MERP Partner City Profile (Rivne) ...... 205 Table 11-31. MERP Partner City Profile (Rubizhne) ...... 206 Table 11-32. MERP Partner City Profile (Severodonetsk) ...... 207 Table 11-33. MERP Partner City Profile (Sloviansk) ...... 208 Table 11-34. MERP Partner City Profile (Sumy) ...... 209 Table 11-35. MERP Partner City Profile (Teplodar) ...... 211 Table 11-36. MERP Partner City Profile (Ternopil) ...... 211 Table 11-37. MERP Partner City Profile (Vinnytsia) ...... 214 Table 11-38. MERP Partner City Profile (Yuzhne) ...... 216 Table 11-39. MERP Partner City Profile (Zaporizhzhia) ...... 217

vi USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Acronyms

ADCS Automated dispatch and control systems AEEU Association of Energy Engineers of Ukraine ARVI Aggregated Recovery Value Indicator AUC Association of Ukrainian Cities BEE Business Environment for Energy CBMC Community-based Marketing Campaign CBP Capacity-building plan CCS Center for Climate Strategies CEAC Clean Energy Advisory Center CEM Certified Energy Manager CE RC Clean Energy Resource Center CE CACs Clean Energy Condominium Advisory Center CEBDS Clean Energy Development by Introducing Bioenergy Solutions in the Heating Sector CFR U.S. Code of Federal Regulations CHPP Combined heat and power plant CIESIN Center for International Earth Science Information Network CMU Cabinet of Ministers of Ukraine

CO2 Carbon dioxide CoM Covenant of Mayors COP Chief of Party CPB Capacity Building Plan CPFF Cost-plus-fixed-fee CSO Civil society organization CTF Clean Technology Fund DCA Development Credit Authority DCOP Deputy Chief of Party DH District heating E5P Eastern Europe Energy Efficiency and Environmental Partnership EA Energy audit

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan vii EBRD European Bank for Reconstruction and Development EC-LEDS Enhanced Capacity for Low Emission Development Strategies EECU Association of Energy Efficient Cities of Ukraine EEF Energy Efficiency Fund EFOM Energy Flow Optimization Model EIA Environmental impact assessment EIB European Investment Bank EM Energy management EnPC Energy performance contract ENU Eastern Ukrainian National University ERC Environmental review checklist ESCO Energy service company EU European Union EU DEL European Union Delegation to Ukraine EU MS EU Member States EUR Euro (currency) FER Fuel and energy resources Gcal/h gigacalorie per hour GCC Global climate change GDA Global Development Alliance GDP Gross domestic product GEF Global Environmental Facility GHG Greenhouse gas(es) GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit GOU Government of Ukraine HAP Hand-over Action Plan HE Heat energy HOA Homeowners association HOA/CE RC Homeowners association clean energy resource center HORECA Hotel, Restaurant, Cafe/Catering IEA International Energy Agency

viii USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan IEE Initial environmental examination IEEC Institute for Environment and Energy Conservation IEF Institute for Economics and Forecasting IFC International Finance Corporation IFI International financial institution IHS Individual heating substation INDC Intended Nationally Determined Contributions IPCC Intergovernmental Panel on Climate Change IRG International Resources Group KfW Kreditanstalt für Wiederaufbau KPI Key performance indicator kWh Kilowatt hour(s) LEDS Low Emission Development Strategies M2 Square meters M3 Cubic meters MARKAL MARKet and Allocation Model MDI Municipal Development Institute M&E Monitoring and evaluation MEIS Municipal Energy Information System MEP Municipal Energy Plan MERP Municipal Energy Reform Project MHR Municipal Heating Reform (Project) MinEcology Ministry of Ecology and Natural Resources MinEconomy Ministry of Economy MinEnergy Ministry of Energy MinJustice Ministry of Justice MinRegion Ministry of Regional Development, Construction, Housing and Communal Services MinSocPolicy Ministry of Social Policy MMP Mitigation measures plan MRV Monitoring, reporting, and verification MTO MERP Task Order

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan ix MOU Memorandum of understanding MWh Megawatt hours MW Megawatts NECSRC National Energy and Communal Services Regulatory Commission NEEAP National Energy Efficiency Action Plan NEURC National Energy and Utility Regulatory Commission NEFCO Nordic Environment Finance Corporation NGO Nongovernmental organization NPV Net present value OCA Organizational Capacity Assessment Odesa TGO Odesa Heat Supply Company OPI Overall performance indicator OPORA All-Ukrainian Public Organization “Civic Network OPORA” PEST Political, economic, social, technological [analysis] PIU Project Implementation Unit PMR World Bank Initiative Partnership for Market Readiness PPP Public-private partnership PRAIP Program for Ranking and Analysis of Investment Projects PSA Public service advertisement/announcement Q Quarter RAB Regulatory asset base RC Resource Center RDF Refuse-derived fuel production REA Renewable Energy Agency REP Regional Energy Plan RFA Request for Application RFP Recordkeeping of fare payment RIMS Regulatory Information Management System RSEP Regional Sustainable Energy Plan RTC Regional Training Center SCBP Selection and Capacity Building Plan

x USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan SAEE State Agency on Energy Efficiency and Energy Saving of Ukraine SECAP Sustainable Energy and Climate Action Plan SEAP Sustainable Energy Action Plan SEW [European] Sustainable Energy Week SIDA Swedish International Development Cooperation Agency SME Small and medium enterprises SMM Social media marketing SOW Scope of work SSF Shareholder Special Fund [of the EBRD] SWOT Strengths, Weaknesses, Opportunities, Threats [analysis] TA Technical assistance TDP Thermal distribution points TIMES The Integrated MARKAL-EFOM System T&M Time and materials TNA Technology Needs Assessment TO Task Order TPA Third-party access UAH Ukrainian Hryvna (currency) UMIDP Ukrainian Municipal Infrastructure Development Program UNDP United Nations Development Programme UNFCCC United Nations Framework Convention for Climate Change UNIDO United Nations Industrial Development Organization USAID United States Agency for International Development USD United States dollar (currency) VR Verkhovna Rada, Supreme Council of Ukraine WB World Bank YCELP Yale Center for Environmental Law and Policy

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan xi

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xii USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Executive Summary and Outline of MERP Role and Developmental Impact

Summary of the Project Concept The United States Agency for International Development (USAID) Mission for Ukraine and Belarus implements the Municipal Energy Reform Project (MERP, or “the Project”) in Ukraine through its contractor RTI International, as described in the scope of work (SOW) and subsequent modifications. Background. Ukraine is heavily industrialized and is among the world’s most energy-intensive economies. Ukraine’s industry sector consumes more than one-fourth of the nation’s net energy. Residential and commercial customers account for about 25 percent of total net energy. Furthermore, Ukraine’s use of energy is four to eight times less efficient than other industrialized, emerging market economies such as Brazil, China, and Poland. This significant energy demand has historically made Ukraine a net energy importer, which has placed it at the mercy of neighbor states that benefit greatly from price shifts and the geopolitical implications. Ultimately, because Ukraine is a major energy importer, the country’s economic growth has lagged, as government resources have been drawn away from more productive uses and into government subsidies. Helping Ukraine improve its energy security and, therefore, its geopolitical independence has been a priority of the United States Government and this flagship Project, with expected benefits not just to Ukraine’s economy but also to the strength of its democracy. MERP’s Scope and Objectives. The purpose of MERP is to improve Ukraine’s energy security, making the country less subject to variability in supply and cost, and therefore better able to plan for efficient supply, distribution, and utilization of energy. With improved energy security will come a new geopolitical balance, wherein Ukraine’s demand for energy will be more easily met with local resources. The ultimate goal is to render Ukraine more independent from the geopolitical whims of neighboring states that, to date, have supplied Ukraine with energy. The keys to improving Ukraine’s energy security are to (1) reduce demand through a combination of energy efficiency initiatives, (2) improve the legal and regulatory environment to build a market more conducive to competitive energy supply, and (3) introduce renewable energy as an alternative to imported energy. MERP accompanied this approach with extensive public outreach campaigns intended to communicate the importance and the economic value of reducing energy consumption. MERP also invested significant time and effort into strengthening the capacity of the Government of Ukraine (GOU) so it can successfully manage the transition to a new legal and regulatory framework that applies market principles to energy sourcing, facilitates investment in renewable energy, and gradually gives individual consumers more control over their energy expenditures. As part of this transition, the Project focused on the social safety net to ensure that vulnerable consumer groups are not adversely impacted by a transition to higher tariffs. MERP assisted large Ukrainian towns and cities through increased production of clean energy and reduced consumption through successful application of efficiency measures. The Project

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 1 has been instrumental in steering Ukraine toward reduced consumption of energy produced through conventional, thermal generation, while cutting greenhouse gas (GHG) emissions and reducing expenditure on imported energy. To achieve its purpose, the Project implemented activities in four main areas: 1. Activity 1 - Improve the Clean Energy Regulatory and Legislative Enabling Environment 2. Activity 2 - Promote Investment in Clean Energy Technologies and Applications 3. Activity 3 - Capacity Building and Dissemination 4. Activity 4 - Enhance the Capacity of the GOU in Low Emission Development Strategies (LEDS) MERP has supported GOU’s efforts to reform the municipal energy sector by addressing the challenges identified in the GOU Program of Economic Reforms for 2020, with an emphasis on clean energy and improved energy efficiency measures, through market-based price signals and by improving the competitiveness and reliability of municipal services. Through this process and Project’s support, Ukraine’s energy policies are shifting away from imported energy and toward domestic resources. Ukraine is strengthening its energy market legal and regulatory framework to meet European Union (EU) standards. Ukraine is likewise moving to adopt and fully implement the Energy Community Treaty and Global Climate Change (GCC) Convention provisions. Joining the GCC community is expected to provide Ukraine with a competitive, transparent, and predictable market framework that will attract investment and continue advancing further technical and economic improvements in Ukraine’s energy sector. MERP’s Stakeholders and Regional Coverage. Fundamental to the success of MERP has been a devolution of authority down to the municipal level, encouraging better local-level stakeholder engagement, planning, and decision making. Since its inception, MERP has provided extensive support to multiple stakeholders at the national level of the government of Ukraine to strengthen its ability to manage the reforms to be carried out at the municipal level. The Project has collaborated closely with all major GOU players at the national level: Verkhovna Rada (VR) of Ukraine, the Cabinet of Ministers of Ukraine, the Ministry of Regional Development, Construction, Housing and Communal Services (MinRegion), the Ministry of Social Policy (MinSocPolicy), the Ministry of Ecology and Natural Resources (MinEcology), the State Agency on Energy Efficiency and Energy Saving of Ukraine (SAEE), and the National Energy and Communal Services Regulatory Commission (NEURC). Through partnerships, MERP has also cooperated with 36 municipalities covering 44 percent of the urban population of Ukraine. These include the largest cities (such as Kyiv, Kharkiv, Lviv), and cities in Eastern Ukraine (Kramatorsk, Mariupol, Severodonetsk, and others). Work carried out at the national and municipal levels was complemented by a multifaceted consumer information campaign, which benefitted from the active involvement of nongovernmental organizations (NGOs). The consumer information campaigns employed creative strategies to incentivize change, coaxing Ukrainians to change their understanding of and approach to energy efficiency and alternative energy usage in their residences, while simultaneously demonstrating the importance of responsible energy decision making as part of homeownership.

2 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan The Project spanned all geographic regions of Ukraine. Its primary objectives, performance, and achievements under each project objective are summarized below.

Activity 1: Improve Clean Energy Regulatory and Legislative Enabling Environment MERP helped improve tariff regulations and created an enabling policy environment to ensure the financial sustainability of public and private investments into municipal energy efficiency and other clean energy applications. These improvements were intended to stimulate more investment in the energy sector through a market-based approach, encourage utilities to implement demand-side management principles, and motivate both suppliers and consumers of energy to invest in equipment that makes consumption of energy more efficient. This activity focused on legal and regulatory reforms expected to improve efficiency of energy consumption, eliminate costly subsidies, and increase awareness of energy efficiency mechanisms and programs, while ensuring that a social safety net remained in place to protect the neediest energy consumers. Due to the complexity of Activity 1, which included aspects of legal reform, support to NEURC, design and implementation of the social safety net, development of energy efficiency standards, and public information campaigns, it was organized into and implemented as five complementary tasks. The summary of key legislative documents drafted with MERP's assistance and key achievements under these tasks are described below.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 3

Task 1.1. Developing an Enabling Legislative and Policy Environment Under this task, the Project supported the GOU in developing and implementing extensive legal and regulatory reforms of the municipal energy sector to incentivize greater energy efficiency. Much of this effort required national-level policy and regulatory work. Establishment of the Energy Efficiency Framework. At the national level, MERP developed, advocated for, and facilitated adoption of the major strategic legislative documents responsible for establishment of the energy efficiency framework in Ukraine. These included the National Energy Strategy, the Energy Efficiency Action Plan, and a number of other legal acts that facilitated the establishment and operation of the Energy Efficiency Fund in Ukraine. As a result, on April 18, 2018, Ukraine signed an agreement with EU on receiving approximately USD 60 million of irrevocable financing to start the work of the Energy Efficiency Fund and approximately 60 million will be allocated from the State budget in 2018. MERP supported establishment of national energy efficiency goals and a national strategy for energy efficiency in Ukraine, with the aim of reducing energy consumption by 9 percent by 2020 and by 50 percent by 2030. The national strategy and goals led to introduction of new market and financial mechanisms that support energy efficiency measures. MERP assisted with the development of a package of legal measures that established the incentives framework and supported its adoption. One set of laws concerned the ESCO package, which provided for EPCs. Simultaneously, the Project assisted with the development of legal and financial mechanisms that permitted state and municipal institutions to offer financial support for energy efficiency measures. One example of these measures is the state-level “warm loans” program.

4 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Several other municipal programs were designed and implemented to finance energy efficiency projects: with MERP’s support, six new laws were adopted, and two more were developed. Support of Homeowners Associations. MERP supported introduction of laws and regulatory acts that allowed homeowners associations (HOAs) to operate legally as collective consumers, empowering them to work together as collective consumers of utility services. HOAs, acting as organized groups of consumers, now play an increasingly important role in advancing responsible energy The impact of MERP in developing consumption and advocating for improved and more financing mechanisms for energy efficient service delivery in the residential energy sector. efficiency Across Ukraine, 12,254 HOAs were created, including Over the Project’s lifetime, 274,662 4,198 in MERP partner cities. loans, including 1,248 loans to Support of Renewable Energy Legislation. Improving the HOAs, amounting to over USD 195 security of Ukraine’s energy sector has required reducing million have been disbursed to Ukrainian utilities’ reliance on foreign energy sources and support implementation of energy increasing the availability of locally managed, renewable efficiency projects and measures energy sources. The Project supported the development throughout Ukraine. and adoption of several important laws and action plans necessary to advance this initiative, including the Renewable Energy Action plan,1 the Law on Heat Supply Stimulating Renewable Energy Usage, and the Law on Electricity Generation from Alternative Energy Sources. As a result, since 2015, more than EUR 400 million have been invested in 408 MW of new capacity to generate electricity from renewable energy/alternative energy sources. The heat supply share from renewable energy sources increased to 6.2 percent, representing 2.4 times the growth that occurred in 2012.The Project further supported implementation of the Renewable Energy Action Plan by contributing to draft laws on liquid biofuels2 and on organizing the solid biofuels market.3 Sector Governance and Transparency Legislation. MERP supported development and approval of the major laws to improve sector governance and transparency. The Law on the National Energy and Utilities Regulatory Commission has improved governance of the energy sector by establishing an independent regulator, and the Law on Information Disclosure for the Utility Sectors intended to increase transparency of utilities’ tariffs in the context of frequent increases. Task 1.2. Assistance to the National Energy and Communal Services Regulatory Commission (NEURC) Under this task, MERP strengthened NEURC’s ability to develop regulations that incentivize and enable licensed municipal energy entities to improve. The Project offered technical support, training, and capacity building to NEURC officials in important areas necessary to promote use of cost-reflective tariff-setting methodologies in accordance with best practices, improve regulation, establish a benchmarking process, improve reporting, establish a quality monitoring system, and strengthen regulatory

1 The Renewable Energy Action Plan established the ambitious goal of 11 percent renewable energy sources in final energy consumption by 2020. 2 Under consideration by VR. 3 Under consideration by SAEE.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 5 capacity. Work under this task introduced and supported implementation of an incentive-based tariff regulatory framework, reduced cross-subsidies, improved regulatory accounting separation mechanisms that ensured proper attribution of costs and revenues from different licensed activities, and improved staff capacity in key regulatory areas. MERP staff worked closely with NEURC personnel but also engaged consistently with representatives from the State Property Fund of Ukraine on asset valuation issues, and with MinRegion on district heating (DH) investments. The Project significantly improved NEURC’s ability to successfully monitor and regulate the energy sector, MERP’s Contribution to Transparent which will have lasting value to the Ukrainian economy, Tariffs as improved regulatory clarity is essential for private investors. MERP assistance to NEURC facilitated cost- MERP assistance to NEURC to based tariffs for municipal energy licensees; provided a introduce regulatory practices that provide for unbiased tariffs, and framework for asset-valuation methodologies in improved reporting and monitoring coordination with the State Property Fund; developed a resulted in adoption of regulatory clear and simple benchmarking methodology to be used accounting separation mechanisms for in assessing utility performance; and instituted a quality licensees under both “cost plus” and monitoring and improvement system to permit NEURC to incentive-based [RAB] regulatory monitor sector performance. As part of this work, a models, thus enabling all parties to track “Consumer Willingness to Pay for Higher Quality of results of each activity and eliminate Service” survey was undertaken, revealing significant cross-subsidies. customer dissatisfaction with the current quality of service. MERP assistance to NEURC to build its capacity to regulate included multiple engagements, totaling 34 training events that engaged 1,472 professionals. Task 1.3. Supporting Improvement of Social Safety Net for Vulnerable Population This task focused on ensuring that other changes to the energy sector— those that are likely to result in rising tariffs—had no ill effects on vulnerable populations including the elderly. MERP supported MinSocPolicy to develop regulations that would soften the impact of changes to communal and housing services’ energy tariffs. The work focused on improving the accessibility of social assistance programs; this meant making changes to the terms and conditions of subsidy policies to ensure that the social safety net remained available and easily accessed by those who needed it most. MERP also conducted an extensive capacity-building campaign for employees of MinSocPolicy who administer or manage the subsidy programs, to ensure effective delivery of this service. Finally, MERP helped the GOU strategize methods to encourage beneficiaries of the social safety net to shift from social assistance to energy efficiency measures over the long term. The project interventions took a long-term view of the energy sector, and prioritized interventions intended to make the social service sector more transparent, more efficient, and more sustainable in the long term. This work required extensive cooperation with the World Bank (WB). The system of social assistance was significantly improved, and over 5 million households received subsidies during the first heating season after the price increase, allowing them to retain access to social services despite the change in price. MERP also assisted the GOU in

6 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan development and adoption of the founding regulations for rationalized social norms.4 It is estimated that the social assistance program is working well, delivering services to over half the households in Ukraine. Task 1.4. Supporting Energy Efficiency Standards As a signatory of the European Community, Ukraine committed to harmonizing its energy legislation, regulations, norms and standards with those of the EU Energy Directives and Energy Standards. This task focused on advancing that process of harmonization, facilitating further cooperation with the EU. MERP prepared a gap analysis to compare Ukrainian norms and practices with EU requirements stipulated by ISO 50001, proceeded with the approval process of current Ukrainian norms and practices, while developing a new standard harmonized with EN 17246-1 and EN-16247-2 (energy auditing). The Project also conducted analysis of implementation of an action plan for change of building codes in accordance with EU norms to produce an action list of priority standards in need of improvement. Five standards were identified for improvement: heating systems; thermal performance of windows, doors and shutters; thermal performance of curtain walling; building components and building elements; and thermal performance of buildings. Work under this task resulted in support to the approval process for the national standard on Energy Management (based on ISO 50001). Another five key energy management standards (DSTU ISO 50006:2016), approved by GOU, were supported by MERP through consultations. The Project developed and supported an approval process for the National Standard on Energy Audit of Buildings (according to ISO 50002). MERP also developed and supported an approval process for the National Standard (DBN V.2.6-14) on Roof Design. Finally, MERP began helping MinRegion to develop national standards on energy marking in support of implementation of EU Directive 2010/30/EU. As a result, the national standard, Rules for Energy Labelling of Translucent Building Envelope Structures, was finalized and approved. Task 1.5. Public Information and Awareness This task managed a national public information and awareness campaign that communicated many important messages about the energy reforms, energy efficiency, and the changes in tariffs (among other things) to the general Ukrainian public. The outreach campaign was an extension of the communication campaign undertaken under USAID’s Municipal Heating Reform (MHR) project from 2010 to 2013 and was informed by an important WB needs assessment study carried out in 2014,

4 In 2014 alone, the state budget savings resulting from reduced social norms (natural gas consumption) was estimated at USD 500 million. This work was the result of joint efforts of the previous USAID Project (MHR), WB, and MERP.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 7 which assessed needs and anticipated behavior by target groups resulting from changes to energy policy, social reform, and changes in tariff policy. To manage this activity, the MERP communication team designed a Public Outreach Concept and Action Plan (“Communication Plan”) targeting communication objectives, messaging, audiences, events, materials, methods, and instruments of outreach, collaboration, opportunities that can be leveraged, and coordination measures. The plan also documented targets and means of verification that outreach communication was being delivered successfully. The key results of the Project’s communication campaign are summarized below.

The communication covered all the reforms being undertaken by the GOU with support from MERP, including energy efficiency, energy savings/conservation, home owner associations, changes to tariffs, and social protection mechanisms. Outreach materials varied from website publications to support for public events like “energy days” in partner cities, and from community-based campaigns to a national hotline to a dedicated TV program, Tviy Dim, broadcast on national and regional TV channels. MERP also employed a series of outdoor ads, video public service announcements (PSAs), and internet media. Targeted promotion of energy efficiency in the residential sector concentrated on establishing and equipping 18 HOA/Clean Energy Resource Centers (CE RCs) in cooperation with local partners. The centers provided free consultations on legal, financial, administrative, and technical issues related to establishing and managing HOAs, implementing energy efficiency measures, obtaining finances for energy efficiency projects, and other topics. As a result, over

8 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 4,000 condominiums were created in USAID's partner municipalities, representing about 35 percent of all condominiums created in Ukraine during that period. The media campaigns were varied, engaging, and extremely effective, and delivered impressive results: one of Ukraine’s most comprehensive libraries on energy reform was assembled and made available by physical copy in key cities and digitally via download for everyone else; public service announcements promoting “warm loans” and other social safety net programs were disseminated over television, and video products were disseminated more widely through social media campaigns. USAID and MERP established a partnership with UA: PERSHYI National TV channel to broadcast the Your Home program addressing energy-efficient home improvements. MERP conducted over 350 public outreach activities at the national and municipal level, including conferences, roundtables, workshops, press briefings, study tours, Sustainable Energy Days, and more. MERP also educated 615 journalists on the importance of providing press coverage about energy reform, housing, and communal services in a fair, clear, and professional manner to ensure high-quality coverage that allows Ukrainians to draw correct conclusions and make informed decisions about the importance of energy efficiency. The Project developed and conducted a series of interactive trainings for 714 representatives of MERP Population Survey regional and national mass media outlets to build The survey conducted in September 2017 the capacity of media to promote reforms. Press showed that: tours to successfully implement energy  87% of the adult population of Ukraine efficiency/alternative energy measures and projects supports energy efficiency/clean energy complemented the trainings. measures;  55% implemented one or several energy The MERP survey (see box) demonstrated that efficiency or energy-saving measures in energy and social sector reforms are best their households or multiapartment accompanied by powerful, multifaceted information buildings; and campaigns, and that although Ukrainians are  20% recognized MERP materials or generally willing to invest in energy efficiency programs. measures, they do so more willingly when they are The survey covered 110 cities and villages in all oblasts of Ukraine, including 24 MERP given better information about the issues and about partner cities. social safety nets in place to protect them. Activity 2. Promote Investment in Clean Energy Technologies and Applications Activity 2 sought to overcome the barriers faced by municipalities in developing and implementing clean energy activities and to help municipalities leverage available financing by promoting investment in clean energy technologies and applications. This activity was designed to institutionalize the sustainable energy planning process in selected municipalities, support development of sustainable energy action plans (SEAPs), help integrate SEAPs where a municipality already has a Municipal Energy Plan (MEP) in place and promote financing of energy efficiency improvements in partner cities through provision of training, guidance and practical assistance. MERP helped communities produce bankable projects including feasibility assessments, preparation of technical and financial project information and documentation and helped support institutional arrangements to incentivize long-term and sustainable sources of

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 9 financing such as private sector engagement and performance contracts by ESCOs. MERP also supported use of Development Credit Authority loan guarantees. Lastly, Activity 2 prepared sustainable energy public awareness plans and supported the creation of public resource centers facilitating information exchange among HOAs. Like Activity 1, this was a complex activity, organized around multiple tasks. Task 2.2: Assisting Municipalities with Planning, Preparing and Financing Clean Energy Projects Under this task, MERP engaged planners from select municipalities to support their development of SEAPs, supported regional energy planning in Odesa Oblast, supported implementation of SEAP monitoring plans, and produced a number of tools for capacity building including multiple implementation manuals designed to help municipal officials carry out the process of building energy strategy, engaging the public, and develop new projects. Several important trainings were carried out on the basis of these manuals. MERP also actively supported preparation of project proposals, including business plans and feasibility studies. The Project conducted demonstration projects in residential and public buildings such as heat pumps and solar collectors, prepared clean energy investment strategies, and built project pipelines of viable energy projects to support 20 partner cities. The MERP team also prepared regional assessments and delivered energy audits (EAs) of residential buildings. The work resulted in multiple EAs of municipal energy systems, public5 and residential buildings, and the development of SEAPs for 25 partner localities. The overall investment planned under the SEAPs is about USD 1.8 billion. Twenty-three of twenty-five investment plans were approved by the city councils, and the plans identified cities’ development priorities and commitments related to GHG emissions reduction and energy efficiency/clean energy investment. During CY2015-2017, the cities invested USD 153 million under SEAPs.6 MERP conducted EAs, plans, and the development of catalogues in close cooperation with the partner municipalities and utility companies, thus allowing for local partners to receive hands-on experience in these areas and build municipal capacity to develop and implement clean energy projects. In addition, the Project developed a number of manuals and methodological materials, conducted training sessions for partner localities in identification and preparation of clean energy projects, natural gas substitution with biomass in the heating sector, and energy efficiency/clean energy projects financing and implementation. The Project supported the cities in preparing detailed project proposals and applying for and obtaining finance from international financing institutions (IFIs), donor organizations, and the public and private sectors. MERP efforts resulted in 61 projects valued at USD 479 million and 16 projects valued at USD 120 million accepted for funding.7 In addition, MERP prepared 13 demonstration projects in public and residential buildings valued at over USD 8 million. Based on requests from the cities, MERP also supported implementation of five projects funded by WB, Nordic Environment Finance Corporation (NEFCO) and European Bank for Reconstruction and Development (EBRD) valued at USD 74 million. The implementation

5 Over 1,000 buildings in partner localities and regions. 6 Does not include the City of Kyiv, as its SEAP was officially approved in May 2018. 7 The data are as of March 31, 2018.

10 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan support covered capacity building and development of in-depth assessments and technical specifications to allow for procurement and funds disbursement. MERP developed the first-ever in Ukraine Regional Energy Plan (REP) for Odesa Oblast, which will serve as a template and roadmap for improving energy efficiency at the oblast level. Implementing the REP will make it possible for the region not only to save nearly UAH 2.6 billion (~USD 100 million) by 2022, but also reduce its consumption of energy resources (natural gas by more than 22 percent and electricity by 36 percent), lower CO2 emissions, and diversify energy generation with renewable energy resources. The REP investment program includes energy efficiency projects in various sectors of the regional economy, which will require UAH 29.5 billion (~USD 1.1 billion) to implement by 2022. The project leveraged USAID clean energy funding8 at the ratio of 1:20 or about USD 330 million, through March 31, 2018. Task 2.3. Introduction of Energy Management Systems Under this task, MERP experts prepared and presented the comprehensive Energy Management Manual in accordance with ISO 50001, and conducted introductory trainings for the partner cities. In coordination with other donors, MERP assisted the GOU in reviewing and approving documents and standards for the implementation of energy management systems. The Project developed a methodology for monitoring, guidelines for EM, limits for energy consumption, and use of funds received from savings. As a result, SAEE officially issued a report9 containing inter alia recommendations to local authorities on the implementation of the energy management system in public buildings via its website.10 At the national level, MERP supported establishment of an internationally recognized energy management certification program and certification board in Ukraine on the basis of the professional Association of Energy Engineers of Ukraine (AEEU).11 To build municipal capacity in energy management, the Project assisted over 30 partner cities and utilities with improving energy management systems, formulating organization charts, and conducting training and capacity-building activities. MERP also supported development of comprehensive energy management documentation, conducted capacity building and training for over 170 persons, and performed internal audit of energy management to ensure compliance with ISO 50001 and to prepare for certification. As a result, Sumy is the first large city in Ukraine to receive ISO 50001 certification. Task 2.4. Development Credit Authority Loan Guarantee On October 24, 2013, a Guarantee Agreement was signed between USAID and the private stockholding company joint-stock commercial Bank Lviv, to increase Lviv’s ability to invest in energy efficiency projects and improve its customer base investing in energy efficiency. MERP supported USAID’s Development Credit Authority (DCA) by helping conduct assessments of DCA potential, building capacity of the DCA agreement holder, and supporting the bank with an

8 Excludes funding under the “warm loans” program supported by MERP. 9 The report and recommendations developed by MERP in cooperation with SAEE. http://saee.gov.ua/uk/news/1923, http://saee.gov.ua/sites/default/files/ENERGY_MANAGEMENT_14_08_2017.docx 10 The implementation of energy management will enable 5 to 8 percent energy saving due to energy-efficient consumer behavior, and up to 20 percent reduction of power consumption due to the establishment of energy- efficient operation of facilities without additional investment. 11 http://www.aee-ua.org/

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 11 assessment of selected energy efficiency or clean energy projects. Bank Lviv has since received 48 applications and issued 22 energy efficiency loans for an approximate total value of USD 3 million. The DCA utilization is about 37 percent and the bank is satisfied with the current usage of DCA guarantee. Task 2.5. Support Mechanisms that Mobilize Private Sector Investment MERP supported promotion and implementation of ESCO mechanisms under this task. MERP conducted EAs and assessed prefeasibility of potential energy efficiency projects in the public buildings sector. This included project proposals based on EBRD lending mechanisms and criteria for five cities. The estimated total value of proposed energy efficiency measure projects is over USD 50 million. Based on the precedent of the Kremenchuk project prepared with MERP support,12 EBRD established a EUR 115 million Ukraine Public Sector Energy Efficiency Framework that lends to Ukrainian municipal energy management companies to finance energy-saving improvements in public buildings and street lighting infrastructure. MERP conducted analysis of public-private partnership (PPP) potential for partner localities and prepared several project proposals to bring in private funding. Due to support by MERP, landfill gas utilization projects with private partners started in Ivano-Frankivsk, Khmelnytskyi, and Kamyanets-Podilsky have advanced and attracted private sector financing of approximately USD 1–1.2 million. For the City of Teplodar (Odesa Region), MERP developed the project concept and prefeasibility study for the construction of a biomass-fired boiler house, and supported the city with a private investor search. Activity 3. Capacity Building and Dissemination The objective of Activity 3 was to ensure replication and sustainability of the Project accomplishments. Capacity building of Ukrainian institutions ensured that they were able to implement energy efficiency activities and receive direct assistance from USAID, while helping continue to disseminate information about the Project’s accomplishments. Task 3.1. Preparing a Local Nongovernmental Organization (NGO) for a Direct Award from USAID This task was limited to the first 2 years of the Project. MERP conducted an overview of local NGOs conducting activities in the areas relevant to the reform agenda. Through a competitive process of Requests for Applications (RFAs), the Project selected four NGOs and provided them with comprehensive capacity building and small grants for project implementation. All four projects by NGOs were successfully implemented. The projects by NGOs clearly covered the thematic areas in which MERP assisted the GOU: Independent Certification System for Energy Management Specialists, Local Government Capacity Building for Efficient Energy Management, Natural Gas Substitution with Biomass in Heat Energy Production, and Institutional Capacity of Ukrainian Cities in the Development and Implementation of Sustainable Energy Policies. Local NGO “Renewable Energy Agency” was prepared in-depth for direct award from USAID. Cross Cutting: Transparency and Disclosure in the Municipal Energy Sector. Through legal and regulatory changes, public information and advocacy campaigns, and capacity building, MERP promoted improved transparency and disclosure of information in the municipal

12 See Section on Task 2.2.

12 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan energy sector. As a result of Project efforts, informal anticorruption coalitions were established in multiple cities with leading anticorruption and journalism organizations advocating for transparency in the energy sector; in addition, trainings were conducted for local anticorruption and journalist groups and training-of-trainers sessions for 30 local trainers. Forty-eight regional workshops/seminars were held, attended by over 752 activists from villages, towns, cities, and regions. MERP experts developed informational materials and distributed information about potential corruption and/or abuse on the ZHYTLO13 page and moderated the open group (page) in Facebook called ANTILAPA.14 Activity 4. Enhance Capacity of the Government of Ukraine in Low Emission Development Strategies Objective of Activity 4 supported Ukraine’s efforts to pursue long-term, transformative development and accelerate sustainable, climate-resilient economic growth while slowing the growth of GHG emissions. The Activity comprised the three tasks summarized below. Task 4.1. Strengthening Institutional Capacity in Planning LEDS–Resource Efficiency Development Strategies Under this task, MERP assisted the GOU in developing and adopting major strategic documents establishing climate policy framework in Ukraine and reporting the results to international counterparts. These documents included the State Climate Policy Concept until 2030 and a related Action Plan, and the National Low Emission Development Strategy until 2050. The Project provided major assistance to the GOU for participating at the Marrakech Climate Conference, and helped the GOU prepare the Sixth and Seventh National Communications on Climate Change and submit them to the United Nations Framework Convention for Climate Change (UNFCCC). The Project also helped develop Ukraine’s Intended Nationally Determined Contributions (INDC) and submit them to UNFCCC. With support of the Project, the VR of Ukraine ratified the Paris Agreement as early as July 2017. With the assistance of the Project, a System of Monitoring, Reporting, and Verification of GHG Emissions in Ukraine was developed and established. The effort included development of a Toolkit and a Glossary on monitoring, reporting, and verification (MRV) of GHG emissions, development of a National GHG Inventory Enhancement Plan, as well as development of training curriculum and conducting training for several sectors. The Project worked on capacity building of the GOU in the area of LEDS, including a training course for high-level GOU officials, ministries, and agencies on LEDS, as well as a LEDS Study Tour to the United States for 13 state officials, conducted in 2017. Task 4.2 Implementing LEDS through Support in Developing and Introducing Clean Energy Technologies and Energy Services This task included development of Sustainability Criteria for Biofuels and Bio-liquids Production, and development of a Methodology to Calculate GHG Emission Reductions during Production and Use of Biofuels and Bio-liquids. The Project also developed and published a Technology

13 https://zhytlo.in.ua 14 The page collects information on corruption cases and corruption risks in the energy, housing, and communal services sector.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 13 Needs Assessment (TNA) Report for the Municipal Sectors, explaining how municipal energy entities may utilize the latest technical solutions to meet climate goals. Task 4.3. Developing a Uniform Database on LEDS and Exchanging Experiences and Best Practices with Other Countries Participating in Enhanced Capacity for Low Emission Development Strategies (EC-LEDS) This task included inter alia development of the UA-LEDS database to assist Ukraine on selecting and applying low emissions technologies and tools to meet its LEDS obligations. The database is operational, publicly available and accessible, and contains up-to-date information. Donor Coordination While assisting the GOU to improve the clean energy regulatory and legislative enabling environment and to promote investment in clean energy technologies and applications, while enhancing capacity of the GOU in LEDS, MERP collaborated with other donors active in the area.15 MERP coordinated and collaborated, on different tasks and at different periods, with the following donors16:  EBRD,  European Investment Bank (EIB),  EU Delegation to Ukraine (EU DEL),  Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ),  International Finance Corporation (IFC),  NEFCO,  United Nations Development Programme (UNDP),  United Nations Industrial Development Organization (UNIDO), and  WB. The Project coordinated with other projects financed by donors, such as Transition from Cost- plus Tariffs to Incentive-based Pricing–District Heating Sector Project (by the Swedish International Development Cooperation Agency [SIDA] and the WB), Capacity Building for Low Carbon Growth Project (by UNDP), Regional project ClimaEast (by EU), Integrating Rio Conventions Provisions into Ukraine’s National Policy Framework Project (by UNDP and Global Environmental Facility [GEF]), and Removing Barriers to Increase Investment in Energy Efficiency in Public Buildings Project (by UNDP and GEF).

Good Practices Good practices, which were applied in the course of Project implementation, were identified in the MERP Evaluation Report 2018, and some of them are provided in text boxes herein. Working at the national level, on legislative and regulatory framework development and advocacy, MERP was noted for successful engagement of diverse high-quality local and

15 Details on coordination per each activity are provided in section 5. 16 Provided in alphabetical order.

14 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan international experts, a focused approach to legal/technical advice, and daily interaction with decision makers at GOU institutions. Working at the municipal level on facilitating investment into clean energy technologies, MERP was noted for a systematic cross-sectional approach and integrated actions in analyzing the status quo; prioritizing energy efficiency measures and developing investment pipelines for efficiency in facilitating access to financing sources; having strategic municipal decisions on SEAPs in place, for building up knowledge of municipalities on how donors work to access financing for projects; and for specialized assistance and individual attention from experts for capacity-building efforts.

“The MERP model of combining the effort of party staff, attracting international experts where needed and, particularly, providing high-quality local consultants has proven to be successful. MERP offered various forms of cooperation, including providing an overview of best international practice, providing technical and/or legal advice upon request, and participating in routine drafting and revisions of law/regulation. [...]. The key success factors were the focus on technical and/or legal advice, working on a daily basis with government and parliamentary staff, and the selection of respected local technical experts and lawyers.” – MERP Evaluation Report 2018

“Specifically, MERP systematically worked with municipalities through a series of steps–from initial audits, to developing SEAPs, conducting Prefeasibility Studies, preparing investment pipelines, and introducing municipalities to investors.” “MERP’s emphasis on integrated, cross-sectional analysis of communal services sectors provided the tools to analyze and prioritize energy efficiency measures and, finally, to implement improvements addressing cost-recovery for municipal budgets or outside funding” “Many IFIs considered MERP-assisted SEAPs evidence of municipal capacity to carry out sector modernization work and to be considered for loans.” “MERP helped stakeholders at various levels (…) to understand the workings of donor- and private-sector financial institutions, and to some extent, the workings of the private sector energy market. “Key informants considered the individual attention from MERP consultants, and the specialized technical assistance during the process as critical to successful outcomes” –MERP Evaluation Report 2018

Lessons Learned The Project, based on experiences over the period of implementation, identified the following key lessons learned in working with diverse stakeholders at various levels on reforming and promoting energy efficiency in municipal energy sectors.  Donor coordination is critical during the initial phase of an initiative, and coordination on a broad scale at later stages of implementation enables the initiative to stay focused on efforts and resource allocation.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 15  Broad inclusion of multiple national stakeholders promotes national ownership of the suggested initiative, although presence of a “national champion” for legislative initiatives is essential to ensuring that legislation is adopted.  National-level monitoring and control over strategic document implementation are essential for timely and efficient achievement of the sector’s strategic goals  Methodological support, and capacity building to implement adopted legislation are required for executive branches of the government.  Capacity building locally needs to be supported with capacity building internationally, for the assisted institution.  Engaging knowledgeable, creative partnerships with stakeholders coming from diverse areas of the sector enables reaching a truly wide audience with targeted information and utilizing the benefits of cost sharing.  Conducting EAs is prerequisite to quality energy planning, which, in turn, is critical in identifying city infrastructure projects that need to be developed.  Adoption of SEAPs and development of investment catalogues and project proposals allowed the cities to access financing sources, although city management priorities play a decisive role in the implementation process.  Capacity building and specialized technical expertise (hands-on consulting) are critical to generating sustainable and long-term energy efficiency improvements in municipalities.  Step-by-step introduction of energy efficiency measures, progressing from smaller projects to larger projects, is an effective way for municipalities to gain the knowledge and experience needed to implement energy efficiency projects. Conclusions Improved Regulatory and Legislative Environment. With assistance of the Project, Ukraine has significantly improved its regulatory and legislative environment for energy efficiency and renewable energy. The state adopted strategic decisions on an Energy Strategy, Renewable Energy Action Plan, and an Energy Efficiency Action Plan. The framework laws have been adopted as well: law on independent regulator, package on ESCOs, package on HOAs, package on communal service sector, and several laws incentivizing renewable energy, to mention just a few. The existing model of the regulatory framework has been improved and several new regulatory instruments have been introduced. A social support system for vulnerable consumers of communal services was thoroughly revised to achieve wider accessibility and responsiveness. Changed Consumer Attitudes. MERP’s information campaign resulted in significantly improved attitudes of consumers to renewable energy, energy efficiency, organizing into and acting through HOAs, utilizing funds available for energy efficiency measures, tariff reform, and changes in the social protection system. Creative partnerships with the GOU, national and municipal institutions, NGOs, and private organizations have been used and have enabled the Project to reach a broad residential/consumer audience with important messages related to energy consumption and conservation.

16 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Adaptive Project Implementation. Due to political instability, war in Eastern Ukraine, a sharp economic downturn, and national currency curtailment, the first 2 years of the Project were marked with stagnation and the reluctance of municipalities to focus on clean energy planning, financing, and project implementation. After the political situation stabilized, the Project managed to meet the original goals, through adaptive implementation, working at both the municipal level and implementing all planned interventions in clean energy planning and development. With assistance of MERP, many EAs were conducted and multiple investment catalogues prepared for cities, energy management systems established in cities, and one city was awarded with ISO 50001 certification. Municipal Energy Planning. With Project assistance, strategic energy planning at the municipal level was firmly established: The 25 developed SEAPs for cities in terms of overall investment represents about USD 1.8 billion; the first-ever REP developed projects that totaled another approximately USD 1.1 billion of investment on energy efficiency projects in the regional economy of Odesa by 2022. Successful Project Financing. MERP’s efforts resulted in 61 projects valued at USD 479 million and 16 projects valued at MERP leveraged USAID clean USD 120 million accepted for funding; 13 more demonstration energy funding at the ratio of projects were prepared, valued at over USD 8 million; and 1:20 or about USD 330 million, implementation of 5 WB, NEFCO, and EBRD funded projects through March 31, 2018. valued at USD 74 million was supported. In addition, 22 energy efficiency loans for an approximate total value of USD 3 million were issued by Bank Lviv under the DCA mechanism. EBRD established a EUR 115 million Ukraine Public Sector Energy Efficiency Framework, based on the Kremenchuk project precedent, prepared with MERP support. High Demand for MERP’s Technical Assistance. Due to limited resources for the number of municipal requests for support, the Project was not able to assist with all requests. However, the demand for MERP services indicated that municipalities recognized the value that the Project created while providing assistance. With assistance of the Project, Ukraine has not only adopted the major strategic documents establishing climate policy framework (State Climate Policy Concept until 2030, Action Plan on the Concept, National Low Emission Development Strategy until 2050), but also actively engaged in the UNFCCC process. The Project significantly contributed to capacity building of GOU in LEDS, which paves the way for further accomplishments for Ukraine in LEDS.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 17 Activity 1. Improve Clean Energy Regulatory and Legislative Enabling Environment

Objectives of Activity 1. Per project documentation,17 Activity 1 aims to improving tariff regulation and create an enabling policy environment to ensure the financial sustainability of public and private investments into municipal energy efficiency and other clean energy applications. The underlying principle of this approach is that these improvements will trigger market mechanisms to stimulate more investment in the energy sector, as well as encourage utilities to implement demand-side management, while motivating both suppliers and consumers to invest in end-use energy efficiency. Objectives of Activity 1: . improve regulatory and legislative environments necessary for reforming municipal energy efficiency in order to attract financing and investment for clean energy improvements; . improve tariff setting methodologies (such as the RAB methodology) to ensure they are incentive-based, cost-reflective, provide a return on investment, and incorporate social safety net policy factors into the tariff structure; . provide capacity-building assistance for the Commission, its regional regulatory offices, other relevant GOU stakeholders, and utility companies; . coordinate with other donors and IFIs assisting the Commission; and . provide assistance to the GOU and partner municipalities in developing and implementing public education and information activities to support energy sector reforms, promote clean energy, and provide informational support to low-income customers.

Task 1.1. Developing an Enabling Legislative and Policy Environment Approach The primary purpose of the USAID MERP is to enhance Ukraine’s energy security. Increased end-use energy efficiency combined with the increased production of clean energy in large towns and cities will reduce the consumption of conventionally produced energy in Ukraine while cutting GHG emissions, energy expenditures, and imports. To achieve the objectives, an Enabling Clean Energy Regulatory and Legislative Environment is needed as the foundation for expected actions by sector entities, consumers and other stakeholders. MERP supported the GOU in developing clean energy policies, legislation, and regulations. The political agenda of reforms under scope of work of the Project, requests of Project beneficiaries, as well as annual working plans of the Project determined the focus of assistance provided during the period of performance. The EU Energy Community requirements and best international practices provided the basis for technical advice and assistance provided by the Project. The Project assisted and/or supported development and/or adoption of 20 laws of Ukraine, 27 resolutions by Cabinet of Ministers, 5 orders by Ministries in the area of municipal energy reform aiming to increase energy independence and share of clean energy in Ukraine. The results of

17 USAID, Task Order #AID-121-TO-13-00006. Section C – Description/Specifications/Statement of Work.

18 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan the Project’s assistance to the GOU in Task 1.1 enabled establishment of a principal framework for reforming the municipal energy sector and emerging new markets, to enable consumers and employ local resources to a greater extent. The approach followed by MERP was to assist and support legislative efforts of the GOU in the following areas:  Increasing energy efficiency. MERP assisted the GOU to reform municipal energy sector to achieve greater energy efficiency aimed to promote and stimulate more investment in the sector, which would increase the sector’s energy efficiency, reduce energy waste at all levels of the sector, and reduce primary consumption of energy resources by the municipal energy sector. Reduced consumption of primary resources ultimately serves the mission of creating energy independence for Ukraine.  Empowering consumers. MERP assisted the GOU to reform municipal energy to enable consumers of services supplied by municipal energy utilities to improve energy savings and comfort in their homes. MERP’s assistance aimed to incentivize consumers to engage proactively in energy saving and improving living comfort. Empowerment of consumers was regarded as the energy efficiency-increasing mechanism applied by residents to their property. Reduced consumption of energy services by consumers would result in reduced primary consumption of energy resources, again serving the mission of creating energy independence for Ukraine.  Increasing the sustainability of the energy sectors. MERP assisted the GOU to reform municipal energy sectors to increase sustainability aimed to improve economic condition of sector participants. The aim was to help sectors gradually reduce their financial dependence on budget allocations and increase reliance on their financial flows from business activities and credit institutions. Improved economic condition of sector entities would provide better opportunities for investment needed.  Increasing the share of renewables in the country’s energy system. MERP assisted the GOU to reform municipal energy sectors to increase the share of renewable energy in the structure of resources by municipal energy utilities. This task aimed to establish a framework for incentivizing investment into infrastructure capacities using (local) renewable energy sources, thus enabling a switch from fossil fuels. Conversion of resources is regarded as multipurpose measure, inter alia, to utilize local renewable potential, ensure employment opportunities, and make positive impacts on trading balance. Decreasing dependence on imported fuels directly serves the mission of creating energy independence for Ukraine.  Improving the governance of the sectors. MERP assisted the GOU to reform governance of municipal energy sectors. This effort was aimed at public administration institutions, to provide them with sufficient capacities and set of functions and responsibilities to govern the sector toward its development. Key Actors and Counterparts MERP cooperated with a wide range of counterparts while providing assistance for Developing an Enabling Legislative and Policy Environment. The Project’s counterparts included: MinRegion of Ukraine; Committee on Fuel and Energy Complex, Nuclear Policy and Nuclear Safety of Verkhovna Rada of Ukraine; Committee on Construction, Urban Development,

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 19 Housing and Communal Services of Verkhovna Rada of Ukraine; State Agency of Energy Efficiency and Energy Saving of Ukraine (SAEE); and Ministry of Energy of Ukraine (MinEnergy). Experts and Consultants The names of the experts and subcontractors who assisted the Project in Task 1.1 are listed in Annex 6. Deliverables and Accomplishments MERP assistance to the GOU to reform municipal energy sectors toward greater energy efficiency included support with formulating key items of legislation at all phases of development, advocacy, and adoption of the major strategic legislative documents to establish the energy efficiency framework in Ukraine. Specifically, MERP assistance for energy efficiency included adoption of five Laws of Ukraine, four Resolutions by Cabinet of Ministers, and two draft Orders by MinRegion. Under the strategic efforts for energy efficiency, national goals have been established for Ukraine to achieve 9 percent reduction in energy consumption by 2020 and 50 percent reduction in energy consumed by the Ukrainian economy by 2030. The legal package on ESCOs was adopted to open the market for energy service contracts, and this enabled implementation of energy efficiency goals on practical level. It was estimated that unlocking the potential of energy performance contracts would facilitate (1) creation and development of a new market with an expected volume of UAH 200 billion (~$10 billion) and creation of new jobs; (2) potential energy savings through energy efficiency projects in buildings of up to 0.8 billion cubic meters of natural gas and other energy resources, or UAH 6.5 billion (~$300 million) of annual budget expenditure; and (3) extension of the economic life of buildings by 15-25 years at increased comfort levels. The market for ESCOs in Ukraine emerged, and the number of contracts is under significant growth: in 2016, 20 ESCO contracts have been concluded for UAH 18 million; in 2017, 27 ESCO contracts have been concluded for UAH 28 million; and 347 ESCO contract tender procedures were initiated at the beginning of 2018. With the assistance of the Project, the legal framework adopted for ESCO activities has created an entirely new market in Ukraine, which leads to the ultimate goal—reduced energy consumption. MERP assistance to the GOU to reform municipal energy sectors toward enabling consumers included support with formulating several key items of legislation at all phases of development, advocacy, and adoption of the major strategic documents to reform the existing framework for municipal entities operations in Ukraine. Specifically, MERP assistance to establish and strengthen consumer’s role in municipal energy sectors’ functioning included six Laws of Ukraine, adopted by VR, a number of Resolutions by Cabinet of Ministers (five adopted, two more developed), and three Orders by MinRegion. The reform efforts to enable and empower consumers of utilities was targeted to turn the consumer into the decision maker. Providing legal basis to establish HOAs, ensuring HOAs operations as a nonprofit subject, detailing the terms of acting for the HOA to secure legitimate interests of HOA members, as well as incentivizing activities of HOAs, have been essential to create responsible homeownership and to change consumers’ behavior regarding energy efficiency. During 2015-2018, 12,254 HOAs were established all over Ukraine; 4,198 HOAs

20 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan established in MERP partner cities represent 34.25 percent of all HOAs created during the period. Ensuring the proper functioning of a social subsidies system related to HOAs has been crucial to ensure that consumers participating in HOAs have the same access to social subsidies as those who are not in HOAs. The principle of equal access to a social subsidies system for HOA participants was implemented to maintain the credibility of HOAs. The state- and municipal-level financial mechanisms proposed for HOAs to support energy efficiency measures were expected to stand as a cornerstone of the process, and the expectations were justified. The Project assisted the GOU with development, adoption (by Cabinet of Ministers), and further extension of the “warm loans” program to finance HOAs and individual residential consumers, reimbursing 40 percent of energy efficiency project costs. Since its inception in 2015 through 2017, more than 5 million energy efficiency projects were financed at the residential level, with total disbursement value of USD 195 million. The Project worked on a large-scale campaign to inform Ukrainians of the possibilities and benefits of the “warm loans” program, which helped with quick uptake of the program by consumers (detailed information may be found under Task 1.5). The right of the consumer to access information about utilities companies and their services was expanded and ensured by a specific law initiative, assisted by the Project. The law increased transparency over establishment and application of utilities tariffs in the context of increasing tariffs for electricity, heat energy, natural gas, and services for centralized water supply and sewage disposal. MERP assistance to the GOU to reform municipal energy sectors toward increased economic sustainability included support in formulating several key items of legislation at all phases of development, advocacy, and adoption of the major strategic documents that intend to increase economic sustainability of municipal energy utilities in Ukraine. Specifically, MERP assistance to reform the economic state of municipal entities included three Laws of Ukraine, two adopted by VR and one draft law, a number of Resolutions by Cabinet of Ministers (three adopted and eight developed under the most recent law). Under the primary legislation part, the assistance of the Project resulted in adoption of a law on debt settlement, aiming to unlock the burdensome cross-indebtedness of municipal utilities, national gas supplier, state budget, and municipal budgets. The crisis of UAH 15.2 billion indebtedness against municipal utilities and UAH 4.5 billion by municipal utilities was adopted to be settled during a 60-month period, to avoid blockage of accounts and ultimately to avoid bankruptcy of essential service providers. The Project intensively supported amendments of the Cabinet of Ministers resolution governing the distribution of funds received by the municipal energy entity’s account. Under the effort to strengthen economic sustainability of the sector entities, the Project provided assistance in assessing the impact of the current system governing the distribution of funds, and supported the amendments, which established that the funds dedicated to investment programs of the municipal utilities shall be secured from transferring them to cover other needs, including payments to the gas supplier. This amendment has helped broaden opportunities for municipal utilities to implement planned investment projects.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 21 Partial monetization at the level of municipal utilities, adopted by the Cabinet of Ministers, was yet another step improving economic state of municipal utilities and supported by the Project in multiple ways. The Concept of State Policy in the area of Heat Supply provided long-term strategic directions in DH sector development, thereby contributed to improving the investment environment in the sector. The strategic directions included technological upgrades, increase in the share of renewable energy sources used in the sector, incentive-based tariff implementation, improving supplier efficiency as well as consumer-end efficiency, and others. Having the strategic goals of the sector outlined in a document from the highest authority, the utilities and their owners can plan their actions accordingly, and the state may consider developing relevant measures supporting implementation of the strategic goals. The Law on Housing and Communal Services, heavily assisted by the Project, introduced an entirely new setting for the entire sector. The law is under implementation currently, and the expectation is to have a better functioning sector. MERP assistance to the GOU to reform municipal energy sectors toward increased share of renewable resources in the country’s energy structure included support in formulating several key items of legislation at all phases of development, advocacy, and adoption of the major framework documents that intend to increase the share of renewable resources in the structure of fuels consumed by utilities in Ukraine. Specifically, MERP assistance to reform municipal energy sectors toward increased share of renewable resources included five Laws of Ukraine (two adopted by VR, one under consideration currently, and two draft laws), and five Resolutions by the Cabinet of Ministers. The set of strategic documents has established renewable goals in the energy sector in general (11 percent renewable energy sources in final energy consumption by 2020 and 25 percent by 2035) as well as in DH in particular (40 percent renewable energy sources by 2035). The strategic commitments contribute to providing legal certainty to potential investors, which further needs to be confirmed by other legal decisions. A law on ensuring competitive conditions of electricity generation from alternative energy sources is fixed until 2030. The law balances previously excessive stimulation of the production of electricity from solar energy and lack of stimulation of bioenergy and geothermal energy, abolishing some burdensome requirements for project developers. As the result, since 2015, more than EUR 400 million have been invested in 408 megawatt (MW) of new capacities to generate power under the stimulating tariff. As another example on confirming commitment toward greater renewable energy sources share, the Law on Heat Supply shall be provided. The law ensures stimulating tariff for thermal energy produced using alternative energy sources at the level of 90 percent of thermal energy price over natural gas in relevant regions. In conjunction with other administrative burdens removed, the law provides significantly improved terms for establishing biomass and other alternative generation capacities. The law was implemented before the heating season started, and some new capacities have been installed as the result of the law (for example, a 10.5 MW boiler was installed in Slavutych). In total numbers, the progress in DH in Ukraine is significant, and 6.2 percent of renewable energy using thermal energy was generated in 2016 (representing 2.4 times the growth of that in 2012).

22 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan The Project worked on further steps in establishing sustainable sectors with significant renewable energy share, and the work is to be continued. Namely, the draft law on liquid biofuels is under consideration by VR, and the draft law on organizing solid biofuels market is under consideration by SAEE. The development of draft law on third-party access (TPA) to existing DH infrastructure revealed certain technical framework issues that need to be solved before going into active stage of TPA model implementation, and the Project continues to progress in this area. MERP assistance to the GOU to reform/improve governance of municipal energy sectors included support to develop, advocate for, and adopt the Regulation of SAEE and the Law on the National Commission for State Regulation in Field of Energy and Communal Services. Both documents provide institutional mandate for two key organizations at executive level in the domain. With the adoption of the aforementioned law, the development of which was extensively supported by the Project, work has progressed in the crucial area of Ukrainian commitments to EU related to transposition of the European energy framework into national law. As a part of improving governance of municipal sector efforts, the Project assisted with capacity building for MinRegion Project Implementation Unit (PIU). MERP conducted a series of trainings focused on legal aspects of establishment and activities of PIUs for projects of economic and social development supported by IFIs, and on regulation and practice of procedure of evaluation of beneficiary’s financial state and determination of security types and payback periods for loans provided by IFIs. The details on accomplishments by thematic lines and the most important documents are provided in Annex 1 and Annex 10, respectively. Evaluation Recommendations The following recommendations were provided in the MERP Final Performance Evaluation (February 2018). 1. “Further donor support is needed to develop secondary legislation for recently passed laws on energy efficiency, commercial metering, and housing and communal services. Delays in passing secondary legislation—as well as the risk of developing bylaws contradicting provisions in the law—can undermine progress in legislation, and should be avoided.” 2. “A communication campaign explaining changes in municipal legislation is also needed. The new legislation affects municipalities. Municipalities should be informed and trained on how to implement the new legislation. MERP advocacy and information campaign models are perceived as having been successful in the past, and are expected to be applied in the future.” 3. “MERP should put additional effort into communicating its vision for financial unbundling, and explain how it differs from physical/legal unbundling within the proposed concept of a competitive heat market. Financial/accounting unbundling is important in the context of incentive-based tariffs to improve cost accounting transparency, and eliminate cross- subsidies between activities of production, transport, and supply of heat. At present, at least three donors have a different perception of MERP’s objectives with regard to unbundling. MERP has maintained that this perception does not accurately reflect its work. Its staff should, therefore, be encouraged to clarify the matter.”

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 23 Sustainability and Project Legacy Enforcement The Project conducted a series of meetings with donors active in the area. Anticipated further assistance by donors is provided in Annex 7. Task 1.2. Assistance to National Energy and Communal Services Regulatory Commission (NEURC) Approach The primary purpose of USAID MERP is to enhance Ukraine’s energy security. Increased end- use energy efficiency combined with the increased production of clean energy in large towns and cities will reduce the consumption of conventionally produced energy in Ukraine while cutting GHG emissions, energy expenditures, and imports. To achieve the objectives, an Enabling Clean Energy Regulatory and Legislative Environment is needed as the foundation for expected actions by sector entities, consumers, and other stakeholders. MERP supported the National Energy and Communal Services Regulatory Commission (NECSRC) in developing regulations that would incentivize and enable licensed municipal energy entities to improve their energy efficiency parameters sustainably. Best international practices provided the basis for technical advice and assistance by the Project to NEURC. The Project assisted development and adoption of 27 resolutions by NEURC, implementing reform of regulation and tariff setting for services provided by municipal utilities. The Project focused efforts on two municipal energy activities: (i) thermal energy transport activity through main and local networks in DH systems, and (ii) centralized drinking water supply and sewage treatment activity. The approach followed by MERP was to assist and support legislative efforts of the GOU through the following actions: • Improving current (“cost-plus”) regulation of tariffs for municipal energy services. MERP assistance to NEURC at improvement of current (“cost-plus”) regulatory framework was aimed to reduce the difference between actual costs incurred and cost covered by the existing tariff setting methodology. The main mechanisms introduced are: the possibility of applying projected fuel prices, the compensation mechanism for gas price differences and the mandatory annual revision of tariffs in the area of centralized water supply and sewage; inclusion in the tariffs of expenses for covering losses, improvement of conditions of adjustment of tariffs and requirements for the formation of two-tier tariffs, the possibility of taking overhead costs into tariff, subject to implementation of investment programs in the field of heat supply. MERP provided assistance in reviewing the full package of regulatory documents, covering a wide range of services by municipal utilities. • Improving investment to infrastructure regulation. MERP assistance to NEURC to improve investment to infrastructure regulation aimed to develop a predictable and credible regulatory environment to finance investment projects under a “cost-plus” regulatory model in district heating and water and wastewater sectors; and to finance investment projects under an incentive-based (RAB) regulatory model in water and wastewater sectors. Development of legal ways to include investment costs properly into regulated tariffs was a main focus of MERP assistance. A predictable and credible regulatory environment is crucial to ensure long-term investment flow into a regulated sector and its upgrade.

24 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan • Developing incentive-based (RAB) tariff regulatory framework. MERP assistance to NEURC regarding an incentive-based (RAB) tariff regulatory framework was aimed to design a framework that would create adequate financial flows meeting investment needs, simultaneously creating pressure on the licensee to engage in rapidly improving its efficiency and cost-saving parameters in order to stay profitable. The long-term approach to tariff setting provides regulatory certainty, and gradual transition mode to the new tariff- making model enables licensees to adapt to the new economic conditions of operation. In the long-term perspective, a financially sustainable sector under continuous regulatory pressure for efficiency increases is expected to use fewer energy resources, thus serving the mission of furthering the energy independence of Ukraine, but also to provide services to consumers at better value-for-money ratio. • Supporting development of an asset revaluation regulatory approach, related to introduction of an incentive-based (RAB) tariff regulatory framework. MERP assistance to NEURC in development of an asset revaluation regulatory approach was aimed to enable implementation of the developed incentive-based (RAB) tariff regulatory framework. As the Law of Ukraine on Natural Monopolies states, the incentive-based regulation shall be applied after a revaluation of asset is conducted for regulated entities. The focus of MERP efforts was to contribute to methodological developments under mandate of State Property Fund, to suggest alternative regulatory approaches to revaluation issue, and to assist with preparatory works for licensees. The work over revaluation of asset issue was a mandatory component for incentive-based (RAB) regulatory model to be completed. • Developing a benchmarking system. MERP assistance to NEURC in development of a benchmarking system was aimed at establishing simple and clear tools to create regulatory pressure over licensees to improve their efficiency. The benchmarking result was to be included in the new tariff system. The benchmarking models were developed for each sector—DH sector and water and wastewater sector. The model is based on annually collected data, stable clustering of entities, set of key performance indicators (KPIs), and the final overall performance indicator (OPI). The test for primary data arrays for the water and wastewater sector and DH sector were formed and pilot benchmarking evaluation was conducted. With consistent use of the model, NEURC is able to achieve continuous improvements in overall efficiency of entities and overall cost parameters for their operations. • Developing quality monitoring and improvement system. MERP assistance to NEURC in development of a quality monitoring and improvement system for services provided by municipal energy utilities was aimed at establishing a simple and clear tool to create regulatory pressure over licensees to improve their service quality parameters. The service quality monitoring and improvement models were developed for each sector—DH sector and water and wastewater sector. The service quality monitoring result was to be included in the new tariff system. The model is based on service quality parameters, annual reporting, and assessment. With consistent use of the model, NEURC is able to achieve continuous improvements in overall service quality ensured by licensed entities. • Establishing a regulatory accounting separation mechanism. MERP assistance to NEURC in developing and establishing a regulatory accounting separation mechanism was intended to ensure proper attribution of costs and revenues to different types of activities by

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 25 those licensees, which are vertically integrated. The accounting separation was regarded as a powerful tool to ensure ending up with intra-entity cross-subsidization and resulting discrimination of some services against others. Proper implementation of accounting separation is to ensure no non-intentional tariff distortions and that established tariffs are meeting the recognized costs of licensed activities. The accounting separation is regarded as basis for tariff making under both models, cost-plus and incentive-based. • Improving the regulatory reporting system. MERP assistance to NEURC was aimed at establishing an improved regulatory reporting system for a regulatory reporting framework under which licensed entities provide regular statistical information to NEURC. The regulatory reporting framework needed to be aligned with information and data needs that were set by regulatory methodologies and procedures, approved by NEURC. In addition, MERP assisted NEURC at the initial phase of developing a regulatory IT-based information system, which aimed to reduce administrative burden associated with regulatory reporting by entities as well as reduce burden to NEURC associated with regulatory data collection and analysis. • Improving the regulatory transparency of tariff setting. MERP assistance to NEURC to reform tariff setting for municipal energy services to improve transparency aimed to increase credibility of the regulatory framework and improve the investment environment. Greater transparency of the regulatory process is associated with better predictability of regulatory actions and, in turn, predictability is a key element of an attractive investment environment. An improved investment environment through increased transparency would drive more investment in initiatives that reduce energy inefficiencies of the municipal systems. Reducing energy inefficiency ultimately serves the mission of promoting the energy independence of Ukraine. • Building regulatory capacity. MERP assistance to NEURC toward capacity building was aimed to enable the staff of NEURC to efficiently use the regulations and recommendations developed. The capacity-building effort was three directional—first, an initial basic capacity- building training series was conducted after two regulatory institutions were merged; second, targeted capacity building on regulatory thematic questions underwent development, consideration, or adoption; third, capacity building for NEURC was combined with capacity building of a dedicated staff of licensees on the same topics, so the licensees were able to implement the regulations properly and efficiently. Key Actors and Counterparts MERP cooperated closely with NEURC at management and technical levels. MERP also had some cooperation of the State Property Fund of Ukraine, as regulation on Asset Valuation Methodology is subject to adoption by this institution. MERP cooperation with MinRegion under the regulatory task focused on harmonization of the regulatory approach by NEURC and MinRegion, toward the DH investments made with IFI credits. Experts and Consultants The list of experts and consultants who assisted the Project in its work with NEURC includes those listed in Annex 6.

26 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Deliverables and Accomplishments MERP assistance to NEURC in improving current (“cost-plus”) regulation of tariffs for municipal energy licensees included support with all phases of development, advocacy, and adoption of seven NEURC resolutions. The resolutions covered tariff calculation model and tariff-setting procedures for DH services and water and wastewater services. The improved “cost-plus” regulatory framework provided grounds for inclusion in tariffs certain legitimate costs that were out of regulatory sight previously. With these improvements on tariff calculation, the grounds for reducing losses of municipal utilities were established. MERP assistance to NEURC to improve investment to infrastructure regulation included development, advocacy of legal acts, and capacity building to make investment regulation more credible and more oriented to the long term. The primary target was to achieve inclusion of IFIs credits for infrastructure projects in tariffs, in cases when it was not included because the credit had not been approved with NEURC. The work performed in explaining and finding legal ways to regulate the area (three draft resolutions developed for Cabinet of Ministers and NEURC) is expected to lay groundwork for effective regulating decisions in the near future. The Project started working with long-term regulatory approach to investment planning in the water and wastewater area, and the results of the work presented may be used by NEURC in developing and adopting relevant regulation for any municipal utility so as to install economic efficiency-based regulatory decisions to investment activities of regulated entities. MERP assistance to NEURC in development incentive-based (RAB) tariff regulatory framework for licensees included support with several key items of legislation at all phases of development, advocacy, and adoption of eight NEURC resolutions, establishing full regulatory framework within NEURC mandate for incentive-based (RAB) tariff calculation and setting. The two regulatory packages target thermal energy transport service in DH sector and water and wastewater services. The tariff models include regulatory rules over regulatory asset base, capital expenses, and managing operating expenses under the rule of benchmarking for efficiency; they also include an initial component for service quality performance. The model is based on two phases of implementation—the first regulatory period is projected for 3 years and the second regulatory period is projected for 5 years. Pilot calculation of tariffs was performed under incentive-based (RAB) model, and it revealed that significant tariff dynamics may be expected under the new model, including impact of elimination of cross-subsidies between activities of vertically integrated entities. For example, for water and wastewater there may be expectations of total tariff growth at significant percentage; however, after eliminating cross-subsidies and establishing RAB tariff for transport, the size of the tariff for thermal energy generation may not request significant changes. The pilot calculation was performed under presumptions over projected value of revaluated asset base, and precise pilot calculations are possible after the relevant regulatory act is passed. MERP assistance to NEURC in development of an asset revaluation regulatory approach, related to introduction of an incentive-based (RAB) tariff regulatory framework, included inter alia development of suggestions for asset revaluation methodology subject to approval by the State Property Fund and development of an alternative approach to establish RAB value to switch to incentive regulation. The multi-stakeholder process over revaluation of DH and water and wastewater asset included methodological discussions, pilot revaluation conducted by utilities, and public consultation over the revaluation methodology announced by State Property

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 27 Fund in March 2018. The full-fledged implementation of incentive-based (RAB) tariff regulation under the current Law of Monopolies is possible after the revaluation methodology is adopted, unless an initiative to amend the law takes place. The revaluation of asset is expected to result in additional cash flows for regulated utilities, which is vital to their economic status; however, this needs to be balanced against consumers’ ability to pay their bills. As a mandatory prerequisite before granting the cash flows mentioned, the regulatory rule over usage of these funds must be clearly established and effectively controlled. MERP assistance to NEURC in development of a benchmarking system was aimed at establishing a simple and clear tool to create regulatory pressure over licensees to improve their efficiency. The assistance to NEURC in development of the benchmarking system for utilities in DH and utilities in water and wastewater included analysis of international best practice, capacity building for NEURC staff, assistance in choosing methods of benchmarking, methods of clusterization, suggested selection of KPIs to be benchmarked in Ukraine, and recommendations on using the benchmarking results and on publishing the benchmarking activity to ensure transparency and credibility of this regulatory action. The first data arrays for DH and water/wastewater were formed and supplied to NEURC, and the first benchmarking results for clusterized utilities in both sectors were attained and provided to NEURC. Based on the work conducted and the system developed, NEURC will be able to routinely (every year) perform the benchmarking and establish efficiency targets for regulated utilities. This regulatory activity shall ultimately lead to growing efficiency of individual regulated utilities as well as the sector as a whole; moreover, under the model of incentive-based (RAB) tariff regulation, the efficiency improvements on a voluntary (incentives) basis are expected to be achieved ahead of regulatory obligations, and if results are properly reported, this effort will serve as a powerful tool in mimicking competitive results in uncompetitive segments of regulated activities. MERP assistance to NEURC in development of a quality monitoring and improvement system for services provided by municipal energy utilities aimed to establish such a regulatory instrument, which would enable regulatory institutions to impact certain selected service quality features and keep the licensed utilities accountable for better quality provision. Moreover, the monitoring and improvement system was designed to be a continuous activity, with periodic reporting and assessment of provided quality results. The assistance under development of the service quality system included full methodological support to design the quality system, select quality indicators for the centralized water supply and sewage sector, and for the DH sector, to develop tools for automated monitoring of quality in both sectors. A special task conducted in 2017 was a Pilot Survey on Quality of Certain Types of Utility Services and Consumer Willingness to Pay for Better Quality Services. The survey coverage was all-Ukrainian, and households were asked if they would pay more for better quality of utilities’ services (electricity, gas, DH, water supply). The share of households willing to receive better quality for higher bills was insignificant, although most households admitted that the current quality of service is poor and needs improvement. This way, the survey revealed that quality improvements are important to consumers; however, quality changes are hardly “marketable” to consumers and therefore shall be an integral part of overall development of a utility. MERP assistance to NEURC for establishing a regulatory accounting separation mechanism for licensees included support to development, advocacy, and adoption of the two

28 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan NEURC resolutions adopted and two NEURC draft resolutions publicly consulted by the time of preparation this report. The Rules (Procedures) of Separated Accounting by Licensed Type of Activity in both sectors (DH, water/wastewater) and under both types of regulation (“cost-plus” and incentive-based [RAB]) enable vertically integrated entities effectively separate revenues and costs of each and every activity (business unit), and objectively demonstrate any discrepancies in costs and tariffs for a particular service/activity. For regulatory institutions, the accounting by licensed activities enables effective monitoring and control of spending by utility, and prevention of unfair cost switching from one (competitive) activity to another (monopoly) activity, as well as gaining objective information on suitability of the tariff regulation model applied (or potential needs for adjustments). Accounting separation or financial unbundling plays a key role for establishing and maintaining undistorted investment conditions into sector in all cases, and for establishing and developing competitive markets in certain potential segments. The adopted resolutions and the forthcoming ones are not yet implemented by entities, and for implementation of accounting separation further technical assistance may be needed. MERP assistance to NEURC to establish an improved regulatory reporting system included development and further procedural support to two resolutions adopted by NEURC on regulatory reporting, which enable implementation of the quality monitoring system and benchmarking, both discussed above (in both DH and water/wastewater). The two draft NEURC resolutions on regulatory reporting for utilities under incentive-based (RAB) tariff model were submitted to NEURC for further processing (in both DH and water/wastewater). The adapting regulatory reporting against new requests of the regulatory instruments under implementation is essential for the new instruments to work properly. Taking into account the ongoing usage of IT systems for routine functions, regulatory reporting as well should be moved into the e-environment for the benefit of regulating institution and regulates. The Project developed draft Terms of Reference of the Regulatory Information Management System (RIMS) and provided technical specifications for software and hardware to accommodate functionality of RIMS to assist NEURC to move into the e-environment with reporting. MERP assistance to NEURC to reform tariff setting for municipal energy services toward improved transparency included development of a package of recommendations on Improving Transparency of Regulatory Decisions on Tariff Setting and thematic capacity building seminars. Regulatory transparency is considered to be a meta-principle of the entire regulatory system. To a limited extent (tariff setting procedure), the Project assisted NEURC in improving its transparency practices. MERP assistance to NEURC to build regulatory capacity included development of a capacity- building program, series of basic training seminars, and targeted training over thematic questions under development. During the period of Project implementation, a total of 34 training events were organized and 1,472 people were trained. The details on accomplishments by thematic lines and the key documents are provided in Annex 2 and Annex 10, respectively. Evaluation Recommendations 4. “NEURC and MinRegion should be assisted in moving forward with changes to the economic structure of the utility sector through an economically-based approach to tariff

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 29 setting. In addition to technical calculations of tariffs under the new approach, there is a need for a wider public communication campaign explaining tariff setting and reasons for tariff revisions. Raising the credibility of the regulator and municipal authorities to improve service quality through better regulation is an important issue.” 5. “A comprehensive capacity-building program is needed for NEURC to increase its competence, accountability, and credibility. NEURC requires capacity building to: a. Change the mindset of staff vis-à-vis the role of NEURC in competitive markets, and its goals and principles as an independent regulator balancing the interests of society, consumers, and service providers; b. Equip staff with analytical tools to identify and analyze policy options, simulate market responses, analyze cost structure, and set benchmarks for service providers; c. Strengthen its public relations and communication capacity. NEURC should be able to clearly communicate its decisions and their rationale. The commission should identify its key speakers, and be regularly exposed to the media.” Sustainability and Project Legacy Enforcement The Project conducted a series of meetings with donors active in the area. For the time of those meetings, there were no donors active on the area. Task 1.3. Supporting Improvement of Social Safety Net for Vulnerable Population Approach The primary purpose of USAID MERP is to enhance Ukraine’s energy security. Increased end- use energy efficiency combined with the increased production of clean energy in large towns and cities will reduce the consumption of conventionally produced energy in Ukraine while cutting GHG emissions, energy expenditures, and imports. To achieve the objectives, an Enabling Clean Energy Regulatory and Legislative Environment is needed as the foundation for expected actions by sector entities, consumers, and other stakeholders. Reforming the municipal energy sector is inevitably related to tariff changes, which may present a financial burden on households. Mitigation of changes of tariff for communal and housing services was a key focus of MERP. The Project supported MinSocPolicy of Ukraine in developing regulations aiming to soften the impact on vulnerable populations of dynamics of communal and housing services’ tariffs. The Project assisted development and adoption of 14 resolutions by the Cabinet of Ministers, implementing reform of social support for consumers of housing and communal services. The approach followed by MERP was to assist and support improvement of social safety net for vulnerable population through the following actions and directives: • Improving social assistance accessibility for the population. MERP assistance to the GOU for improving social assistance accessibility was aimed at making changes to the terms and procedures of awarding subsidies, which will contribute to improving the effectiveness of the social security net for users of communal services.

30 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan • Building capacity to implement the new social assistance system. MERP conducted an extensive capacity-building campaign for employees of MinSocPolicy, who are in charge of implementing the new social assistance system in municipalities. • Establishing rational guidelines on level of social assistance for consumers of housing and communal services. MERP assisted the GOU on establishing levels of social assistance for consumers of housing and communal services. This effort aimed to detect and set rational social norms of housing and utilities services consumed. In parallel, the effort aimed to lower natural gas costs for the population; reduce the costs of provision of privileges and subsidies to the population through reduced consumption norms; reduce the amount allocated from the national budget for compensating the difference in tariffs for natural gas for population; and eliminate the potential for shadow gas deals with quantities of gas that were paid for but not consumed by the population. • Developing a long-term program of social assistance that incentivizes residents to switch to energy efficiency measures and systems. MERP assistance to the GOU at developing a long-term program of social assistance aimed to make the entire system more transparent, more sustainable in the long-term, and less reliant on financial resources of the state budget. The recommended long-term program on social norms reduction and balancing intended to give consumers a long-term perspective on reducing waste when subsidized energy is used, and to incentivize property owners to invest. Key Actors and Counterparts MERP cooperated with MinSocPolicy of Ukraine as primary recipient of the assistance for vulnerable populations. Other national counterparts for this area included MinRegion, NEURC, and SAEE. Experts and Consultants The list of experts and consultants who assisted the Project in its work under this task is provided in Annex 6. Deliverables and Accomplishments MERP assistance to the GOU for improving social assistance accuracy and accessibility included support to eight resolutions by the Cabinet of Ministers at all phases of development, advocacy, and adoption. Under the task, in 2014 a new social assistance measure was introduced, aimed at mitigation of increased prices and tariffs by providing targeted compensation to low-income households for their extra expenditures related to increased payment for communal services. As the result, 5 million households received social assistance under the new system and were able to keep their bills paid for communal services. Further improvements of the system were related to simplification of administrative procedures to apply for and receive the subsidy: inclusion of some categories of consumers into the social assistance system based on family income level; inclusion of consumers previously not eligible for assistance because they had a specific type of bank account or specific type of metering equipment; and inclusion of a mechanism of partial monetization of subsidies.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 31 As a result, the social assistance system is functioning in Ukraine, currently serving more than half of Ukrainian households. The wide coverage is explained by the ratio of average household income against the average bill in housing and communal services. However, the accuracy of this social assistance mechanism needs to be improved further, and measures to reduce average consumption of energy services still need to be applied at larger scale in Ukraine. MERP assistance to the GOU for establishing rational volumes of social assistance for consumers of housing and communal services included support to six resolutions by the Cabinet of Ministers in development, advocacy, and adoption. The resolutions, adopted 2014 through 2017, first introduced social norms as the basis for establishing the volume of social assistance, and later amended the size of social norms and expanded the list of services to be included into the system. The corrections of sizes of social norms (e.g., reduction of social norm for natural gas per consumer) aimed at more objective reflection of real consumption of housing and communal services, thereby slowing down the growth of spending of state budget funds on social assistance. Further adjustment of social norms to real consumption patterns is still needed, subject to assessment of the discrepancy between objective consumption and effective social norms. The expansion of the list of services aimed to make the system of social assistance inclusive of consumers of essential housing services who previously were omitted from the resolutions. Over the years of the Project’s work in determining a rational volume of social assistance for consumers, an understandable and effective administrative system was established. The system includes essentially all housing and communal services, and dynamically reacts to changes needed, serving as a solid starting point for further targeted improvements. MERP assistance to the GOU for developing a long-term program of social assistance, incentivizing residents to switch to energy efficiency measures, included analytical work over the results of the current social assistance system in place and development of recommendations to further amendments of the system to stimulate energy users to consume energy rationally. The work included four analytical and conceptual reports. The concluding report suggested adoption of a long-term program for changing social norms for communal and housing consumers that would eliminate existing discrimination among consumers for the same service provided via different technical solutions, help establish realistic needs in terms of energy volumes, and, through information dissemination, would incentivize consumers to implement energy-saving measures at their homes at their earliest possibility. MERP assistance to the GOU for capacity building to implement the new social assistance system was highly technical and practical. The capacity-building program was organized around implementation of the GOU resolutions, establishing and later amending the procedures of social subsidies provision to residents of communal and housing services. The training series was conducted in regions for employees of regional offices of the Ministry. Some training was conducted in cooperation with WB. During the period of Project implementation, 34 training events were organized and over 3,000 employees of local offices of MinSocPolicy were trained. The details on accomplishments by thematic lines and the most important documents are provided in Annex 3 and Annex 10, respectively. Good Practices and Lessons Learned The following observations shall be provided as lessons learned:

32 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 1. Assistance in accomplishing reforms should be provided through all phases of planning and implementation to improve the chance for success. Multiple training series are needed for employees in regions where training is vital for successful transition to the new social subsidies system. The transition had a short timeframe for implementation, and the new system had to accommodate millions of households (more than 5 million recipients in the first year). 2. Verification of new mechanisms by comparing them against practices of other countries helps to avoid significant mistakes. While establishing regulation for support of consumption of non-metered services, it is recommended to verify the level/volume of support by comparing it with average consumption in neighboring countries or in countries that have metering in place. Namely, the initial package of social norms was designed with the wrong assumptions about consuming patterns and lack of reliable metering data; after verification of social norms against factual metered consumption available, it was found that consumption was less than subsidized amounts. 3. Consumers behave according to the stimulus provided. High social norms established and inadequate communication from officials to the public caused consumers to waste energy purposefully, because they feared that if they did not use the subsidized amount, social subsidies would be removed completely. 4. Stronger leadership of one donor in the social safety net for vulnerable populations may play a significant role in speeding up the entire reform. Evaluation Recommendations MERP activity in improving social safety net for vulnerable populations was not a primary subject of evaluation. Sustainability and Project Legacy Enforcement The details on potential continuation of MERP tasks by donors, IFIs, and other stakeholders are provided in Annex 7. Task 1.4. Supporting Energy Efficiency Standards Key Processes/Approach As a signatory of the Energy Community, Ukraine has committed to harmonize its energy legislations, regulations, norms, and standards with EU Energy Directives and Energy Standards. MERP prepared a gap analysis report to compare ISO 50001 requirements with Ukrainian norms/practices on energy management and EU requirements to the EA standard with current Ukrainian norms/practices. The conclusion was to proceed with support of the approval process for the existing Ukrainian standard based on ISO 50001 “Energy Management Systems” and to develop a new standard harmonized with EN 16247-1, EN 16247-2 (Energy Auditing). The standard should be complemented with more specific information/requirements applicable for Ukraine (considering the recent development of Ukrainian National Methodology of energy use in buildings, documentation of energy performance, and energy ratings). In addition, the Project conducted analysis of implementation of the Action Plan for Change of Building Codes in accordance with EU norms to identify a priority list of energy norms/standards

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 33 for improvement that require MERP support. As a result, five areas (standards) were identified as priority for development: heating systems; thermal performance of windows, doors and shutters; thermal performance of curtain walling; building components and building elements; and thermal performance of buildings. Based on the above analysis, the Project, through participation in working groups (SAEE) and by subcontracting consultants and specialized institutions, supported development and approval of several national standards. Key Actors and Counterparts MERP cooperated with MinRegion, SAEE, and local professional associations (AEE, AEA, and others) in the development and approval of energy efficiency standards. Experts and Consultants The names of the experts and consultants who assisted the Project in Task 1.4 are listed in Annex 6. Deliverables and Accomplishments MERP provided support to the approval process for the national standard on Energy Management (based on ISO 50001). Another five key energy management standards (DSTU ISO 50006:2016), approved by the GOU, were supported by the USAID Project through consultations. The Project developed and supported an approval process for the national standard on Energy Audit of Buildings (according to ISO 50002). MERP developed and supported an approval process for the national standard (DBN V.2.6-14) on Roof Design. MERP initiated support to MinRegion in developing national standards on energy marking aimed to support the implementation of EU Directive 2010/30/EU. As a result, the national standard, Rules for Energy Labelling of Translucent Building Envelope Structures, was finalized and approved. Sustainability and Project Legacy Enforcement The details on potential continuation of MERP tasks by donors, IFIs, and other stakeholders are provided in Annex 7. Task 1.5. Public Information and Awareness Key Processes/Approach The information campaign, conducted by the USAID Municipal Energy Reform Project (MERP) team during 2014-2017, was a logical extension of highly successful outreach activities, implemented within the USAID MHR Project in 2010-2013. Communication Plan MERP’s major goal in the outreach area was to develop an effective public information campaign and well-coordinated outreach efforts with other energy sector stakeholders working in Ukraine. For this purpose, the MERP Communication team had developed the Public Outreach Concept and Action Plan (Communication Plan). It was developed to support the

34 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan GOU and MERP partner cities in implementing public education and information activities to sustain energy sector reforms, promote clean energy, explain tariff changes, and provide information to low-income customers about availability of social safety net programs. The document identified many aspects needing attention: communication objectives, messaging, audiences, events, materials, methods and instruments of outreach, collaboration, leverage opportunities, and coordination. The document also established targets and means of verification as essential building blocks of public outreach activity. The key elements of the MERP Communication Plan were built upon the results of a needs assessment study carried out by MERP in the partner cities and by the WB Energy Sector Assistance Program in 2014. The studies provided results and defined needs from interviews with target groups to assess their behavior relating to issues such as energy, social reforms, and recent changes in tariff policy. The public opinion surveys demonstrated that energy and social sector reforms should be accompanied by a powerful, multifaceted information campaign. The Ukrainian population was willing to invest in energy efficiency measures and to control consumption. However, the population needed to better understand what energy efficiency measures should be implemented to help end users reduce their communal services bills and improve the environmental situation. Ukrainians also lacked information on new, simplified social protection measures, new eligibility criteria, and the application process. Coordination To provide comprehensive coordination and realization of the Information Campaign, MERP created a working group consisting of communications representatives from USAID, Cabinet of Ministers, MinRegion, MinSocPolicy, NEURC, SAEE, the All-Ukrainian Public Organization “Civic Network” OPORA, Municipal Development Institute (MDI), and international partners and stakeholders. The working group met on a quarterly basis to discuss the outreach implementation status and, if needed, adjustments to its strategy in accordance to changing priorities. Together, the working group defined objectives, identified needs for information materials, determined dissemination channels and timelines, developed key messages and slogans, and compiled plans for training activities. Informational Materials First, MERP built one of the most powerful libraries on energy reform in Ukraine. Materials such as brochures and posters, leaflets, and infographics have been continually created, updated, and supplemented by leading Ukrainian and international experts. Over 400,000 copies of these materials have been disseminated in MERP partner cities. The electronic versions were placed on MERP’s website to facilitate access for residents of all Ukrainian cities, villages, and settlements to this information. Very quickly, the website has become a powerful informational platform, where more than 160,000 visitors annually are finding exhaustive information on energy saving, alternative energy sources, development and establishment of HOAs, issues of tariff reform, and social protection of the population. Public Service Announcements and Outdoor Posters However, information alone was not enough. The Project needed to find a way to continually keep the attention of Ukrainians on the topics of energy efficiency and energy saving. To that end, each year the USAID Project team, supported by its partners, developed a new series of video PSAs and outdoor advertisements. Creative and engaging, these PSAs urged Ukrainians

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 35 to practice comprehensive and correct heat insulation of buildings, install heat meters and individual heat substations, take part in the state “warm loans” program, establish HOAs, and learn about the benefits of employing alternative sources of energy. All our video products were promoted through the Project pages in social networks, such as Facebook and YouTube. They were also placed and widely distributed through similar channels by our partners and stakeholders. To broadcast these videos via national and regional TV channels on a free-of-charge basis, the Project team applied to and received confirmation from the National Commission of TV and Radio of Ukraine to give these video PSAs the status of social advertisement (versus commercial ads). With this approach, broadcast of the PSAs was rotated through more than 120 TV channels free of charge. Placement of our 4,500 outdoors posters (billboards and city lights displays) in MERP partner cities was also done on pro bono basis, thanks to the social partnership with BigMedia, the biggest outdoor advertisement agency in Ukraine. Cooperation with National TV Channel Taking into account the fact that TV is the most popular information channel for Ukrainians, the USAID Project team established a social partnership with UA:PERSHYI National TV Channel for free broadcasting of the MERP TV program, Your Home. The program tells viewers how to make living in their homes more comfortable, and features stories of people who decided to establish HOAs, take “warm loans,” and introduce energy efficient and saving measures in their buildings and households. The show was launched in 2015 and very quickly became so popular that MERP took decided to produce a second and third season, which ended in March 2018. During the time it was broadcast, the program was on the channel’s top-ten list of the most viewed programs. Counselling on Energy Efficiency/Alternative Energy For those Ukrainians who still had additional questions, the USAID Project launched the Hotline, focusing on programs to support energy efficiency activities in residential sector. We also helped establish homeowners association/clean energy resource centers (HOA/CE RCs) in 18 partner cities. These centers provided consultation on a variety of issues related to creation and management of HOAs, implementation of energy efficiency measures, use of alternative energy resources, and state and municipal programs to support energy efficiency projects in the residential sector, among other issues. The Project actively supported the participation of RC consultants in thematic training seminars and conferences where they acquired new knowledge, which they shared with RC visitors. Each of them has advanced to leadership roles in the HOA movement in their respective regions, helping to improve the housing sector for the benefit of future generations. Educating Media We also worked closely with journalists, providing them with opportunities to participate in interactive workshops and study tours to visit the sites that were most successful at implementing energy efficiency/alternative energy systems. Such trainings were organized every year. Through these events, we educated approximately 615 journalists on the importance of covering the topics of the energy reform and housing and communal services in a

36 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan fair, professional, and engaging manner. Such training is vital because the quality of media coverage helps Ukrainians draw accurate conclusions and make informed decisions about energy efficiency. Public Events During its course, the Project supported and organized over 350 public outreach activities on the national and municipal levels, including conferences, roundtables, workshops, press briefings, study tours, Sustainable Energy Days, and other events. All events promoted the Project’s central goal of helping Ukraine enhance its energy security. Evaluation of Effectiveness Step by step, working with our experts, journalists, partner cities, line ministries, and NGOs, the MERP team gradually influenced Ukrainians’ attitudes toward energy efficiency by explaining the importance of responsible consumption of energy and encouraging them to take personal responsibility for improved living conditions and comfort in their homes. In addition, we initiated a dialogue regarding the importance of using renewable fuel sources as an alternative to gas, promoted HOAs as agents for change in the residential sector, explained tariff increases and the communal subsidy mechanism, and addressed other important topics. To evaluate the results of our work, MERP contracted the Kyiv International Institute of Sociology. The research, conducted by this institution in 110 cities and villages (including 24 MERP partner cities) in all oblasts of Ukraine, demonstrated that almost 87 percent of adult population of Ukraine support energy efficiency and clean energy measures, and almost 20 percent could recognize MERP information materials. Key Actors and Counterparts MinRegion and SAEE have played essential roles in supporting necessary legislative and regulatory changes for reforming energy and communal services sectors, in organizing public initiatives related to energy efficiency/alternative energy, working with media and civil society in explaining legislative changes and promoting state and municipal programs to support energy efficiency measures in residential sector, and supporting development of HOAs as agents for positive changes in the energy sector. MERP cooperated with SAEE on promotion of the GOU support compensation mechanism on energy efficiency measures in the residential sector, which covers from 30 to 70 percent of the cost of energy efficiency materials and equipment. These agencies’ roles in providing public discussion forums were crucial in changing public perceptions, especially within the energy and communal services community and its end-use consumers. Due to MERP cooperation with these agencies, we trained over 615 journalists, and over 275,000 loans totaling more than UAH5 million were provided to individual households for implementation of energy efficiency measures. HOAs obtained 1,248 loans totaling UAH 210.5 million since May 2015. The Project’s suite of brochures, video PSAs, and billboards helped increase Ukrainians’ awareness of and interest in energy efficiency. The campaign stimulated them to participate in the program and recover money they spent for energy-saving materials and equipment, and helped homeowners gain a sense of control over their energy use and increase comfort in their homes.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 37 MERP worked closely with MinSocPolicy to launch and sustain an outreach campaign focused on a new mechanism of communal subsidy allocation for low-income households. Together, the Project and the ministry developed outreach materials focused on legal and administrative aspects of the subsidy mechanism, and stressed to subsidy recipients the importance of saving energy. Multiple infographic posters, video PSAs, advice on bill inserts of Kyivenergo, and a subsidy calculator were produced to deliver targeted messages to the audience. In addition, MERP experts participated in TV and radio call-in shows to explain regulatory changes and procedures of the new system. MERP partner cities were reliable partners and stakeholders in outreach activities. Throughout the Project life cycle, we offered the cities a range of activities that included public events on energy efficiency/alternative energy, distribution of targeted information materials on energy efficiency in households and tariff reform, and placement of outdoor PSAs and video advertisements. The Project also supported development of current laws and regulations, provided capacity building, and developed SEAPs to ensure successful and sustainable municipal energy reform. Donor Coordination MERP worked closely with the WB social protection team to ensure synergy in effective implementation of the social safety net outreach efforts. WB and MERP worked on organizing a training series for the staff of social protection offices, including regional units of MinSocPolicy, to facilitate the transition to the new subsidy mechanism offered by the GOU in 2015. As a result, about 3,000 employees have been trained. To extend MERP's activities to a broader audience, the Project team cooperated with IFC on commercial lending to HOAs and with GIZ on outreach activities related to municipal energy management and energy efficiency project investments. About 100,000 copies of MERP’s brochure, “Energy Efficiency: What to Do and Where to Get Money,” were printed and distributed throughout Ukraine by SAEE. MERP coordinated its communication activities regarding tariff increases with the outreach programs of the EBRD and WB, specifically with programs targeted at energy efficiency investments in municipal utilities. Experts and Consultants Details can be found in Annex 4. Deliverables and Accomplishments The Project engaged leading national and international experts in the development of the variety of its outreach materials on energy efficiency and saving, alternative energy sources, development and establishment of HOAs, tariff reform, and social protection of the population. In the course of 4.5 years, the Project disseminated about 400,000 informational materials in its 36 partner cities. We posted the online versions of these materials on the Project’s website so that residents of all Ukrainian cities, villages, and settlements can access this information. Very quickly, our website has become a powerful informational platform, where more than 160,000 visitors annually find comprehensive information on the issues of energy reform.

38 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Brochures, Posters, Bill Inserts The brochure, “Why Tariffs Go Up?” was aimed at raising awareness about communal services tariff policy and the real cost of resources. The brochure explains the necessity of increasing tariffs, and describes best practices in EU countries to stimulate energy savings in the residential sector. Due to gradual tariff increases and Ukrainians’ concerns over the issue, the Project team updated the brochure as needed, and distributed it in partner cities, as well as at forums, exhibitions, and other public events. To address concerns of Ukrainians regarding tariff issues, our team created a new brochure, "Tariffs Explained," which was dedicated to the subject of growing tariffs for communal services in Ukraine. It explained in detail how the tariffs for electricity, heating and district water supply and sewage services were formed. In addition, the "Tariffs Explained" brochure explained the tariff formation system in Ukraine and provided tips on how to save money and reduce energy consumption to pay less for communal services. Social Protection of Ukrainians To alleviate public concerns about the tariff increase, we developed a series of leaflets and posters that focused on the theme of social protection of Ukrainians. Throughout the campaign, conducted in its social media pages, teplo.gov.ua, www.zhytlo.in.ua, and through participation in public events, MERP provided information regarding changes in provision of housing subsidies, and advocated monetization of subsidies as a method to influence recipients to adopt energy-efficient lifestyles. We also created an online Electronic Communal Services Subsidy Calculator to help people calculate the amount of housing subsidy. When informing Ukrainians about the importance of taking action to ensure a more energy-efficient future, it was necessary to provide information about the ways to finance such initiatives. To this end, the USAID Project team worked with specialists from SAEE to develop a series of special brochures entitled, “Energy Saving: What to Do and Where to Get Money?” Over 100,000 copies of these brochures were printed and disseminated throughout Ukraine by SAEE. These brochures provided the most recent information and detailed description of the government “warm loans” program, lending, and reimbursement terms. Information about the program was also widely publicized in the Project’s PSAs. Billboards, city lights, and video PSAs reminded Ukrainians whenever possible that, by participating in the program, they could recover part of the money they spend for energy-saving materials or equipment. All these strategies have made it possible to increase awareness of and interest in the program; consequently, more than 274,000 loans, totaling more than UAH 5 billion, were provided for implementation of energy-efficient measures. HOAs were active in the effort—they obtained 1,248 loans totaling about UAH 210.5 million since May

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 39 2015. The Project partner cities also launched their municipal programs covering “warm loan” interest or part of principal. Energy Efficiency and Saving To help Ukrainians reduce the consumption of energy resources, the USAID Project developed an information poster, “Energy Saving Tips.” It contains tips on efficient use of electricity, water, and gas. In partnership with the Kyiv City State Administration and the Dnipropetrovsk Oblast Council, these posters were set up in the lobbies and elevators of multiapartment buildings, in municipal reception offices and information centers, and consumer service departments of municipal utilities. In Kyiv alone, 35,000 copies of the posters were disseminated. Another popular publication was “Don’t Know How to Get Warm?,” a brochure that offered 10 timely ideas on using low-cost measures to save heat in apartments and public spaces of apartment buildings. To reach a larger audience, the Project partnered with Kyivenergo company to disseminate energy- saving tips printed on the reverse side of the company’s electricity bills that were sent to about 200,000 customers monthly during the heating season. Promotion of Responsible Homeownership Another series of brochures was created to promote benefits of HOA establishment and implementation of energy efficiency measures in multiapartment buildings: “How to Create HOA,” “Energy Saving: What to Do and Where to Get Money?,” “Building Management: How to Exercise Your Rights,” and “Our Building—Our Property.” The brochures were used during the community- based marketing campaign, which the Project conducted in cooperation with Lviv City Council under the slogan, This Is Your Home—Be Its Master! The objective was to convey information about the benefits of responsible ownership, creation of HOAs, and implementation of energy- efficient measures in multiapartment buildings. As part of the campaign, which lasted from September through November 2015, experts of the Lviv HOA/CE RC held meetings with residents of 10,389 individual apartments in 123 residential buildings of Sykhivsky district in Lviv. As a result of the campaign, the number of new HOAs in the district increased by 30 percent, while the number of initiative groups willing to create HOAs increased by 56 percent.

40 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Alternative Energy To disseminate the message about replacing conventional fuels with alternative energy sources, thereby contributing to Ukraine’s energy independence, we developed the brochure, “Clean Energy—Clean Future.” The brochure includes information about the energy of sun, wind, and water, biomass, and biofuels, and explains geothermal energy and waste energy. As part of the outreach materials related to alternative energy, the USAID Project created a series of posters with a more detailed description of the clean energy resources available in different geographical regions of Ukraine. For example, Kherson Oblast, south of Ukraine, has the potential to use clean energy sources for 42 percent of its current energy consumption. Specifically, the oblast can replace nearly half of its energy consumption (mostly natural gas) with agricultural waste (straw, chaff, etc.). Outdoor Advertisement and Video PSAs Every year, the USAID Project team developed new series of video PSAs and outdoor advertisements. Creative and engaging, these PSAs appealed to Ukrainians to practice comprehensive and correct heat insulation of buildings, install heat meters and individual heat substations, take part in the state “warm loans” program, establish HOAs, and learn about the benefits of employing alternative sources of energy. About 4,500 posters appeared on the streets of our partner cities during this campaign. The video PSAs have been broadcast by more than 100 Ukrainian TV channels; they have been posted on social media and displayed in intercity trains. Overall, they have been seen by more than 20 million TV viewers during the period of rotation, more than 560,000 Facebook and YouTube users, and about 2 million passengers on Ukrainian Railways. Billboards and City Lights “Get Warm Together!” outdoor posters were developed and placed in various locations within partner cities during the 2014-2015 heating season. The posters promoted the comprehensive insulation of buildings, installation of heat meters and weather-based control systems, and appealed to co-owners to unite their efforts and save up to 40 percent on energy consumption. “Insulate Correctly!” posters encouraged Ukrainians to carry out the thermal insulation of their homes in the correct sequence: install heat meters, conduct a thermal modernization, and participate in the state “warm loans” program to recover 30 to 70 percent of the costs of insulation and energy-efficient materials and equipment. The posters include website addresses of MERP (merp.org.ua), MinRegion (minregion.gov.ua), and SAEE (saee.gov.ua), where detailed information is available.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 41 “Switch to Alternative Energy Sources!” posters were developed. During the heating season of 2015–2016, Ukrainians saw another set of posters calling for the use of alternative energy sources instead of gas, and featuring facts about alternative energy potential in Ukraine and its ecological and economic benefit.

A new series of outdoor ads with the theme, "Energy Saving Arithmetic," started blanketing Ukrainian cities in 2016-2017. The new billboards and city lights displays included information about various energy efficiency measures, and showed how much consumers can save by implementing these measures in an apartment, private home, or HOA. For example, the installation of solid fuel boilers, comprehensive wall insulation, and the use of energy-saving equipment enable a family living in a private house to save up to 70 percent on their utility bills. Furthermore, EAs can help identify energy losses and determine the most effective energy-saving measures and comprehensive heat insulation of multiapartment buildings, and can be funded through the state “warm loans” program. Audits can help Ukrainian HOAs save up to 40 percent of funds on utility bills. At the same time, consumers can be compensated for up to 70 percent of the cost of materials purchased under the program. The billboards and city lights displays also provide a link to the USAID Project website (www.merp.org.ua) and hotline number (0-800-21-06-11), whereby Ukrainians can obtain more

42 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan detailed information regarding energy efficiency measures and terms of the “warm loans” program, or arrange an individual consultation. In October 2017, the USAID Project, in cooperation with Teplo.gov.ua (Cabinet of Ministers portal), MinRegion and SAEE started an information campaign dedicated to the issues of HOA establishment, implementation of energy-efficient technologies, and defending the rights of communal services consumers regarding the quality of service.

Overall, we were able to arrange free placement of over 4,500 outdoor posters in our partner cities during the Project. This arrangement was part of our social project with BigMedia Company, the largest outdoor advertisement agency in Ukraine. Thanks to this partnership, we were able to save more than UAH 16.5 million on placement cost, which BigMedia assumed as part of our collaborative socially oriented effort. Video Public Service Announcements During the course of the Project activities in Ukraine, we created nine video PSAs that were broadcast by more than 100 TV channels, viewed by an audience of more than 20 million people. They were also deployed in social media outlets and intercity trains. All videos were created in close cooperation with Cabinet of Ministers, MinRegion, MinSocPolicy, and SAEE. The video PSA, “Save Energy! Don’t Burn Your Money!”, was devoted to educating Ukrainians to change their attitudes toward their own energy usage and the amount of money wasted on energy costs. The video was a continuation of the USAID Project’s information campaign on saving energy and implementing energy-efficient activities in the homes of Ukrainians. Together with the Kyiv Postproduction Studio, we conducted a social experiment and dared Ukrainians to burn a UAH 500 note (no real bills were used during the shooting). Responses were predictable: incomprehension and surprise. But after they were told that it was exactly the amount of money they spent almost every week because of wasteful practices, their opinions changed radically. At the end, the USAID Project offered tips to help Ukrainians save money. The video was broadcast on 104 channels including national and regional TV and website pages of numerous

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 43 municipalities, district entities, and news portals across Ukraine, with the audience exceeding 17 million people. About 36,000 Internet users have viewed this video to date.

Another video PSA, “Got Your Subsidy, Now Save Your Energy Resources!” helped clarify the most common myth among subsidy recipients: “If I use fewer services than the standard, they will take my subsidy away!” The video stressed that the subsidy recipient must save water, heat, electricity, and gas. By doing this, recipients can reduce their obligatory share of the payments, and the state can become less dependent on outside sources for the country’s energy. The video almost immediately became an Internet hit, with more than 86,000 viewers thus far. The video appeared on 106 channels, including national and regional TV and online channels across Ukraine, with the audience exceeding 20 million people. In cooperation with MinRegion and SAEE, the USAID Project team created three video PSAs featuring energy efficiency tips for a private house, an apartment, and an HOA. Each video presented a story of real Ukrainians—householders, apartment owners, and co-owners of HOAs—who had already implemented a number of energy efficiency measures, resulting in savings of up to 40 percent on utility services bills. For example, the real story of one of the Ukrainian HOAs Luchany was the focus of our video PSA, “What Is the Power of HOAs?” In the video, apartment owners and the association’s chairperson noted that it is quite realistic to expect savings of up to 40 percent on utility bills— but to do this, consumers need to take the first step: Join neighbors and set up an HOA. It is the only way to take control of a building’s energy consumption and ensure that energy efficiency measures are instituted. In addition, the video featured interviewees who shared their

44 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan experience with cost savings by insulating their building envelope, replacing windows, and installing an individual heating substation. In the next video, we shifted the focus to energy-saving tips in an apartment, sharing the experience of a Kyiv family that was able to save up to 50 percent on utility bills by introducing simple but effective energy efficiency measures. In our last video PSA of this series, the owners of a private house in Kyiv spoke about energy saving. They described the measures that helped them to save up to 70 percent on utility bills. These measures included insulation of walls, roof, and basement, use of the solid fuel boiler, light-emitting diode lamps and motion sensors, and switching to energy-saving home appliances. These PSAs were viewed on the pages of USAID and its partners by over 162,000 users of Facebook and YouTube. In addition, USAID Project social advertisement videos were placed at governmental portals, such as www.teplo.gov.ua (Cabinet of Ministers), and website pages of numerous municipalities, district entities, news portals, etc. The videos were broadcasted by 86 TV channels, with the audience exceeding 20 million people. The PSAs are also placed on video screens of intercity trains, covering all regions of Ukraine. The potential audience for the PSAs in these trains is approximately 200,000 people per month. In October 2017, the USAID Project, in cooperation with its partners, launched a new phase of information campaign dedicated to the issues of HOA establishment benefits, implementation of energy efficiency technologies, and defending the right to high-quality housing and communal services. For this purpose, a series of new video PSAs, billboards, and city lights displays were developed. To date, these videos have been shown on the screens of intercity trains, and are broadcast by over 50 TV channels. To date, over 278,000 users of Facebook and YouTube viewed these PSAs.

Your Home TV Program The USAID Project team, in cooperation with the UA:PERSHYI National TV Channel, created the Your Home TV program. The program educated viewers on how to make living in their homes more comfortable, illustrating the stories of people who decided to establish the HOAs, take “warm loans,” and conduct thermal modernization of their buildings. The program also covered the experience of the USAID Project partner cities in implementation of the energy efficiency projects on the municipal level, launch of the local programs promoting energy saving and use of alternative energy sources, and creation or modernization of the municipal energy management systems.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 45 The channel started broadcasting the program in October 2015. In its first season, the program attracted the attention of Ukrainians and became one of the top-ten programs with the highest ratings. Success of the first season prompted creation of the second and third seasons; the last one started in October 2017. In total, Your Home was broadcast on 35 Ukrainian TV channels with an audience of 4.7 million, and was viewed by about 2 million Facebook users. The format of the last season was slightly different from the previous two seasons. The episodes were twice as long (26 minutes); they focused on the legal and technical issues of the housing and communal sector, commercial metering, maintenance of multiapartment buildings, protection of co-owners’ rights, and tariffs regulation. In addition, we demonstrated the lifehacks that helped people make their homes more energy efficient. Some episodes of the third season placed among the top five most highly rated programs of UA-PERSHYI.

Hotline on Energy Efficiency For Ukrainians who wanted to receive individual consultation, the USAID Project launched the Hotline, focusing on programs to support energy efficiency activities in the residential sector. The hotline was launched in the summer 2016 and provided free expert advice on how to save energy in an apartment, how to correctly insulate multiapartment buildings, how to create and manage an HOA, what banks are offering loans for energy efficiency activities in the residential sector, on what terms the loans are offered, and other information. More than 10,000 customers have turned to the Hotline for advice from the USAID Project.

46 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Dispelling Myths Related to New Legislation To dispel myths related to the Law on Commercial Metering of Heating and Water Supply and Law on Housing and Communal Services (adopted by VR in June and November of 2017, respectively), we launched an information campaign in social networks. Using a Q&A format and infographics, we answered the most frequently asked questions and debunked the most common myths. We also explained why such laws were needed, what they will change, etc. The campaign was launched on the USAID Project website and Facebook page, as well as on the social media pages of our partners and governmental portal, www.teplo.gov.ua. Joint Information Project with Internet Media Venue “Obozrevatel” In October 2017, the USAID Project team and “Obozrevatel,” the most popular media outlet in Ukraine, collaborated to launch an information project: a series of publications on the most important issues of energy saving, energy efficiency, and building management. In our weekly materials, we discussed ways to reduce energy consumption and utility bills and peculiarities of HOA functioning and efficient management, and provided tips on thermal modernization and implementation of energy-saving technologies in residential buildings. In 4 months, we wrote 15 articles that were read by over 210,000 Ukrainians. Working with Mass Media It was necessary to provide journalists with current information about rather complex technical issues and legislative provisions related to energy and communal sector reform accurately and simply, without bias and sensationalism. Indeed, it is the knowledge of journalists and quality of their materials that will determine the correctness of conclusions to be drawn by Ukrainians, and, therefore, the decisions they will make. Realizing this, we have developed a series of interactive trainings for representatives of regional and national mass media outlets, where training was combined with press tours to the facilities, including companies and HOAs, that were successful at implementing energy-saving measures and using alternative sources of energy. Gradually, working together with experts of the USAID Project, journalists have learned about the latest technology for modernization of buildings, criteria for equipment and materials for quality performance of work, sequence of actions and decisions for efficient use of energy resources, and reducing utility bills. In addition, journalists have attended trainings on how to present information on diverse media platforms, use correct terminology in their articles and video features, dispel popular myths about new legislation, and learn the basics of HOA establishment and operation. In total, 615 Ukrainian journalists have taken part in the trainings. In addition to trainings, the USAID Project, in cooperation with SAEE and its partner cities, organized a number of study tours for over 250 media representatives to the sites, including HOAs, that implemented energy efficiency measures using the state “warm loans” program. After the study tour, over 30 publications in Internet and print outlets and over 10 TV newscasts were released in regional and national media. As a result of increased public awareness and

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 47 confidence in the program, in accordance with SAEE statistics, over 18,000 households have applied for “warm loans” as of mid-March, and have received UAH 355 million from the state banks for heat insulation of their homes. This is a record amount of loan funds disbursed during the program’s lifetime (since October 2014). In addition, the journalists visited sites where facilities were installed to use renewable energy sources, such as biofuel boiler houses, landfill gas stations, and solar power stations. Media Campaign Due to our active and consistent dialogue with media and a variety of educational and outreach events in our partner cities, a minimum of 3,000 publications and video and radio broadcasts mentioning the work of the Project were issued in Ukraine. Homeowner Association/Clean Energy Resource Centers In cooperation with local HOAs, public organizations, or city councils, the USAID Project opened and equipped 18 HOA/CE RCs. Free consultations on legal, financial, administrative, and technical issues are provided at HOA/CE RCs for those who are interested in establishing and efficiently managing HOAs, implementing energy efficiency measures, where to get money for energy efficiency projects, and other topics. To support such activities, MERP provided RCs with over 150,000 pieces of targeted outreach material. In just 2 years (2015–2017), more than 15,055 groups seeking to create HOAs applied for advice from HOA/CE RC experts. As a result, 4,198 condominiums have been created in USAID's partner municipalities, which is approximately 34.25 percent of all condominiums created during the same period in Ukraine (12,254). Public Events In the course of the USAID Project, we have supported, organized, and held more than 350 events both on the national and regional levels, including forums, conferences, roundtables, seminars, trainings, and press conferences. There were also special information events, such as Sustainable Energy Days. From year to year, information kiosks of the USAID Project were installed in the main squares and streets of our partner cities, where adults could obtain free consultations and information booklets, while children could join the Project team and volunteers in making paper windmills and conducting experiments to learn about clean energy. In this way, the adults received comprehensive information about energy-saving measures and legislation in the field of housing and communal services, and the children discovered the world of renewable energy. In addition, during these events, conferences and roundtables on energy efficiency/alternative energy were held in the cities, as well as bike quests and drawing competitions, master classes, and school contests. Surveys A survey was conducted by Kyiv International Institute of Sociology in September 2017. The survey covered the population from 110 cities and villages in all oblasts of Ukraine, including 24 MERP partner cities. The results of the poll showed that about 86.9 percent of the adult population of Ukraine (+/-2 percent, and not counting the population of temporarily occupied territories) strongly supports or rather supports energy efficiency/clean energy measures. Over 55 percent implemented one or several energy efficiency or energy-saving measure in their households or multiapartment buildings. In addition to questions related to attitudes of

48 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Ukrainians to energy efficiency/alternative energy and changes in their behavior, the respondents were shown MERP outreach materials, such as billboards, brochures, posters, screen shots of video PSAs and Your Home TV program. More than 18 percent of the adult population of Ukraine could recognize MERP information materials, and over 20 percent of Ukrainians saw at least one episode of Your Home. Of these respondents, 65 percent named media and internet resources as the most useful channels for gathering information on MERP activities and energy sector and tariff reform. We note that MERP was not paying for placement and/or distribution of materials like TV programs, PSAs, billboards and other, thus the recognition of the campaign is based on the existing methodology/approach. Sustainability and Project Legacy Enforcement The details on potential continuation of MERP tasks by donors, IFIs, and other stakeholders are provided in Annex 7. Activity 1 – Overall Results

With the MERP efforts outlined above, during the period of MERP activity: . Critical reform legislation was developed and supported by key stakeholders . Overall clean energy enabling environment improved . Transparency and disclosure of information in the municipal energy sectors improved . Cost-reflective, incentive-based tariff regulation in Ukraine was approved . NECSRC’s capacity for effective, transparent, and socially responsible regulation has been improved . Adverse effects of tariff increases on vulnerable populations has been mitigated . National public information and awareness campaign to support reform measures was conducted

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 49 Activity 2. Promote Investment in Clean Energy Technologies and Applications

Objectives of Activity 2. Activity 2 intends to overcome the barriers faced by municipalities in developing and implementing clean energy activities. Having financing of IFIs available, municipalities underutilize the financial resources because of low municipal capacity, and lack of prepared projects to invest in. Therefore, the Activity 2 is designed to help municipalities leverage this financing available by building their capacity and project pipelines. Objectives of Activity 2: . institutionalize the sustainable energy planning and implementation process in selected municipalities, including SEAPs development and endorsement, preparation of business plans to implement SEAPs, establishment of all systems and processes to manage energy resources and implement SEAPs, to monitor and evaluate implementation, to measure, report and verify achieved energy savings and CO2 reductions; . assist with integration of Municipal Energy Plans and SEAPs, when a city already has a MEP and has joined the CoM initiative; . promote financing of energy efficiency improvements in partner cities through provision of training, guidance and practical assistance to produce bankable projects, including conducting feasibility studies, preparing project technical and financial analyses and documentation, and facilitating project financing; . support institutional arrangements to incentivize long-term and sustainable sources of financing, such as mobilizing private sector investment and performance contracts by ESCO, supporting the implementation of DCA loan guarantees; . prepare sustainable energy public awareness plans and support creation of Resource Centers where HOAs can access and exchange information.

Task 2.2. Assisting Municipalities with Planning, Preparing and Financing Clean Energy Projects Key Processes/Approach City Selection The Project developed cities cooperation strategies and/or an approach for conducting cities selection in 2014 and 2016. The documents outlined the following: • Discussions held with key stakeholders. • Potential areas of cooperation included: – Capacity building on SEAPs, preparation and review of SEAPs (in compliance with EU CoM requirements); – Assistance in preparation of bankable energy efficiency and clean energy projects (EAs, prefeasibility studies, Catalogues of Investment Projects, feasibility studies, and business plans);

50 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan – Project implementation support for capacity building of cities, utilities, and MinRegion on international procurement; support to PIUs (both MinRegion level and municipal level) on preparation of technical specifications and tendering; – Assistance in establishing Municipal Energy Management systems (Support to attraction of investments from private sector (energy service companies [ESCOs], commercial banks, other PPPs); and – Assistance to residential sector energy efficiency implementation, and with local information and outreach campaigns on energy efficiency and clean energy issues. • City selection criteria and selection approach. The majority18 of partner cities were selected on a competitive basis through Request of Applications process. The selection was conducted in coordination with key stakeholders, including IFIs) and donor-funded projects, and approved by USAID. As a result of city selection under Activity 2,19 the Project supported: • Energy planning for 25 partner localities and Odesa Oblast (region); • Establishment or improvement of energy management function for 34 localities; • Capacity building and/or support in preparation for investment projects in energy efficiency/clean energy for 37 localities and three Oblast (regional) administrations (Luhansk, Donetsk, and Odesa). Following the selection results, and to identify assistance priorities, MERP conducted introductory meetings with representatives of selected partners. All partner regions and localities signed Memoranda of Understanding20 (MOUs) with the Project outlining key areas of cooperation. The MOUs were also required as prerequisite for transfer of any property to the municipalities and/or other partners.21 A list of MERP partner cities and localities and contact details can be found in Annex 5 and Annex 6. Sustainable Energy Planning – Partner Cities The Project experts from EnEffect updated the methodology for SEAP development (based on the MEP MODEL methodology). MERP prepared national-level assumptions and macroeconomic forecasts, as well as carbon dioxide (CO2) emission coefficients to be used for national and local planning. The SEAP Manual for Ukraine was prepared and disseminated among local Regional Training Centers. MERP experts (Arnika-Center and OptimEnergo) updated the EA methodology for municipal communal sectors such as heating, water/wastewater, and street lighting. The

18 With the exception of Kharkiv, Kropyvnytskyi, Kremenchuk, Odesa, and Teplodar, which became project partners in 2016-2017. 19 Cities of Drohobych, Burshtyn, and Kuznetsovsk received assistance under Activity 3 of the Project. 20 The MOUs with 17 cities were signed in 2014, while the rest of MOUs were signed in 2016-2017. 21 The MOUs are required for the partners to be registered as project recipients under Ukrainian regulations.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 51 methodology was based on both EU Energy Norms and Ukrainian technical regulations/standards, and focused on definition of energy consumption and CO2 baseline, identification of energy efficiency and clean energy, and emission reduction measures and projects. MERP conducted introductory seminars for each partner city involved in sustainable energy planning. The seminars were focused on preparation of clean energy projects. The Project presented approach and methodology to EAs and energy planning, and discussed the specifics of developing projects in key infrastructure sectors, including project financing options. The Project experts conducted EAs of municipal energy systems for partner cities. At the minimum, the EAs covered four key areas of the SEAP: buildings, heating and hot water, street lighting, and transport. The project experts gathered data to define baseline for energy consumption and CO2 emissions. In a number of cases, MERP conducted EAs of public and residential buildings to provide up-to-date analysis of energy efficiency potential. The EAs of systems and buildings were critical to:

• Identify and propose measures on energy efficiency, clean energy, and CO2 emission reduction, which were further used by the partner cities and RTCs to prepare SEAPs; • identify and prioritize specific energy efficiency/clean energy projects for each city, thus considerably improving the quality of the SEAPs and supporting further development of the municipal infrastructure projects pipeline. MERP (RTCs) assisted the partner cities on establishment of City Advisory Committees and Working Groups on SEAP development. The project experts prepared draft resolutions of city councils to nominate Advisory Committee members and start the SEAP development process. Typically, the advisory committees comprised representatives of the city management units (departments), utility companies, NGOs, and experts. The establishment of advisory committees and working groups allowed for a participatory approach and capacity building of local authorities and utility companies, as they were involved in all stages of SEAPs development. For each city, MERP organized and conducted three training/capacity-building seminars regarding data collection methodology and definition of baseline for SEAPs, CO2 emission reduction targets, and corresponding projects/measures, financial framework, plans approval, and monitoring process. For the first and second groups of cities, the SEAPs were developed with support of, and under the guidelines and quality control of, EnEffect. To support the SEAPs implementation process and help the cities to obtain external funding, the Project prepared catalogues or registers of investment projects. The catalogues provided brief descriptions of the energy efficiency/clean energy project, economic/financial analysis, and information on potential funding sources. Certain partner cities received assistance to develop Investment Strategies of SEAPs/SECAP implementation. The investment strategies and catalogues serve as detailed roadmaps for SEAPs implementation. Focus was on the SEAPs approval process, which involved consultations, presentations, and public hearings conducted in partner cities. In particular, to support the approval process, MERP conducted an advocacy campaign and prepared informational materials, presentations, and condensed versions of the plans.

52 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan The cities also received assistance for completing the SEAP or SECAP templates on the website of the CoM, and to address comments received during the review and acceptance process. Regional Energy Planning – Odesa Oblast To support REP activities for Odesa Oblast, the Project conducted and presented the following assessments and programs: • Potential for solar energy utilization in Odesa Oblast • Regional detailed assessment of available biomass resources • Regional assessment of solid waste management approaches and potential use of landfill gas for existing landfills • Regional Program on Solid Waste Management • Analysis of regional energy planning methodologies for EU countries MERP experts, led by EnEffect, finalized REP methodology based on best EU practices. The Project conducted an introductory workshop on REP for Odesa Oblast. The workshop covered the following topics: EU policies related to energy efficiency/renewable energy in both national and regional context, an overview of European experience in the field of REP, and key steps in the REP process. In addition, the workshop included a presentation on the biomass and solar energy potential for Odesa Oblast. As a result of the workshop, the Project, in cooperation with Odesa Oblast State Administration, established the sectorial working groups Advisory Committee on REP Development. The Advisory Committee included representatives of Oblast authorities, Odesa region partner cities, and experts. Three meetings of the Advisory Committee took place. The meetings were dedicated to presentations and discussions on the following topics: • REP development methodology and structure of the REP • Technical, financial, and sociological information/data needed for REP development • Development of baseline scenario on consumption of energy and energy resources in the Odesa region, using the strengths, weakness, opportunities, and threats analysis/political, economic, social, and technological analysis (SWOT/PEST) for Odesa REP • Proposals on the investment strategy of REP • Technical chapters of REP and the REP financial framework with local authorities The Odesa REP was finalized and submitted to the Oblast administration. SEAPs Implementation Monitoring MERP incorporated monitoring topics in the training seminars on SEAPs development and delivered a series of trainings on energy plans and projects monitoring under Task 2.3. In addition, jointly with EU CoM East Project, MERP organized the training, “Reporting Procedures for Covenant of Mayors–Reporting Objectives and Tasks–Monitoring the Emission Cadaster–Reporting on the Implementation of the SEAP.” The training focused on reporting requirements and procedures of the Covenant of Mayors (CoM), including objectives and

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 53 targets of reporting, monitoring of cadaster of emissions, and reports on SEAP implementation. The Project experts presented to participants the templates of survey tables and explained in detail the process of identifying the sources of monitoring data by sector. Tools and Capacity Building Access to Financial Resources – Building Awareness In 2015, to improve municipal-level awareness of available financing sources for implementation of clean energy and energy-saving projects, MERP experts developed the Catalogue of Financing and Technical Assistance Available for Implementation of Clean Energy/Energy Efficiency Projects. The catalogue was created for representatives of local authorities, employees of communal utilities, representatives of environmental NGOs, representatives of HOAs, and citizens of Ukrainian cities. The catalogue describes major financing loan products, and grants and technical assistance projects intended to support implementation of clean energy/energy efficiency projects. The catalogue was disseminated to Ukrainian municipalities and published on MERP22 and Association of Ukrainian Cities (AUC) websites. The Project developed the concept and issued four newsletters on investment opportunities.23 The newsletters featured best practices of energy efficiency project implementation in MERP partner cities, and described existing funding mechanisms and financing sources available for energy efficiency/alternative energy projects implementation in municipalities. The audience for the newsletters24 included city councils and utility companies of partner cities, oblast administrations, ministries and governmental agencies, NGOs, HOA/CE RCs, professional associations, international organizations, and IFIs. Project Proposal Manual for SEAP Implementation MERP developed a Project Proposal Manual for SEAP Implementation. The manual was created for municipalities, utility companies, and other parties interested in implementation of energy efficiency/clean energy measures. It describes specifics and typical clean energy projects for various sectors, including public and residential buildings, DH, alternative and renewable energy sources (wind, solar, waste-to-energy), water supply and sanitation, transportation, and street lighting. The manual contains detailed recommendations on preparation of

22 http://www.merp.org.ua/images/Docs/USAID_MERP_Catalog.pdf 23 http://www.merp.org.ua/index.php?option=com_content&view=article&id=744:2017-03-18-17-46- 10&catid=79:articles&lang=uk&Itemid=932 24 The newsletter was distributed directly to over 180 recipients.

54 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan feasibility studies (structure and content), financing sources (including ESCO and other private sector mechanisms), environmental assessment overview. The manual was disseminated to all partner cities and through MERP’s website. Manual on Selection of Project Technologies for Municipal Housing and Utilities Sector in Ukraine The manual is intended for developers and decision makers in municipalities and IFIs working with climate finance in the municipal sector. The manual determines climate-friendly technology priorities for mitigation in municipal sectors of Ukraine with a view to scale up climate finance in this sector, thus enabling Ukraine municipalities to address its needs for environmentally sound technologies. Manual on Development and Implementation of Projects on Natural Gas Substitution with Biomass for Heat Energy Production in Ukraine This manual was developed for local community leaders, managers of private companies, public institutions, municipalities, technical experts within heat and electricity generating companies, and producers of bioenergy equipment, among others. The manual presents current practical information and analysis on implementation of bioenergy projects in the heat generation sector gained from the experience of successful real-world projects. Program for Ranking and Analysis of Investment Projects (PRAIP) In the course of preparing the SEAPs for Vinnytsia, Chernihiv, Lutsk, and Khmelnytskyi, Project experts developed the Program for Ranking and Analysis of Investment Projects (PRAIP25). This unique software comprehensively analyzes investment projects (and their specific impacts). PRAIP can be implemented in the framework of SEAPs in different municipal sectors, to identify the most cost-efficient outcomes possible given the financial resources (own or donor-provided) available. Financial, economic, ecological, and social criteria (financial framework) are taken into account in the analysis. PRAIP was presented to partner municipalities.

25 http://www.merp.org.ua/images/Docs/USAID_MERP_PRAIP_Manual.pdf

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 55 Manual on Organization and Holding Public Hearings on Sustainable Energy Action Plans: Methodological Recommendations This manual26 was designed for representatives of local authorities, employees of communal utilities, NGOs, representatives of HOAs, civil activists, and citizens. It features methods and procedures on how to involve citizens in public hearings regarding SEAP preparation and approval process. The methodology was applied through the process of SEAPs approval in the MERP partner cities. Capacity Building Certification in Energy Audits of Buildings and Energy Management To enhance local capacity in preparing projects in the public and residential buildings sectors, MERP selected personnel to take the energy auditors training and certification using Energy Savings International (ENSI)27 methodology and software. About 180 persons expressed their interest in this training and submitted applications. During the selection process, the advantage was given to professionals located or conducting activities in Eastern Ukraine and Odesa Oblast (those representing local service providers, universities, and city administrations located in partner cities, including Dnipro, Kharkiv, Kramatorsk, Mariupol, Odesa, Zaporizhzhia, and others. Thirty-two participants successfully passed the final test and obtained Certificates on Energy Audit in Buildings. MERP supported certification of municipal professionals from partner cities in energy management. In total, three certification courses were conducted in 2015-2017. Other Training The Project conducted training seminars on “Development and Implementation of Projects on Natural Gas Substitution with Biomass for Heat Energy Production in Ukraine” for partner cities, communal enterprises, and private partners (investors). The seminars focused on increasing partner awareness of the benefits of using biomass to replace natural gas, biomass resource potential, technologies, and potential funding sources. The Project organized training workshops on “Preparation of Clean Energy Project Proposals.” The events were attended by representatives of partner cities, SAEE and MinRegion, IFIs, project experts, and staffs of Regional Training Centers. The Project gave a presentation on the preparation cycle for clean energy projects in municipal areas, such as DH, water/wastewater, municipal transport, buildings, and street lighting. Representatives of the partner cities discussed possible use of the proposed clean energy project preparation methodology to implement their SEAPs. Representatives of IFIs—WB and NEFCO—informed participants about the financial instruments and mechanisms available and encouraged cities to apply for clean energy financing. The participants discussed the Project’s further assistance to cities, including

26 http://www.merp.org.ua/images/Docs/Handbook_PH_2015.pdf 27 http://www.ensi.no

56 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan the preparation of investment proposals (i.e., prefeasibility studies and business plans) and their submission to IFIs and private investors. The Project supported international exchanges of the first group of partner cities with the EU CoM. The Project organized and conducted a study tour to Brussels for representatives of six partner cities, MinRegion, and SAEE, to participate in the European Sustainable Energy Week (SEW). MERP Chief of Party (COP) and Ukrainian participants from the cities of Chernihiv, Vinnytsia, Kramatorsk, Ivano-Frankivsk, Zaporizhzhia, and Kherson, as well as representatives of the GOU (SAEE and MinRegion). They met officials from the EU Delegation and EU CoM and discussed important topics related to the implementation of the SEAPs recently developed and approved in the Ukrainian cities with Project support. For the first and second groups of cities, the Project conducted the final SEAP workshop and, in conjunction with the WB, held the Developing Projects, Financing Opportunities and Further Cooperation conference for the first and second groups of partner cities. Almost 100 representatives from IFIs, including EBRD, NEFCO, and WB, donor agencies (USAID), Ukrainian cities, and governmental agencies attended the event. The Project presented typical investment projects for the partner cities, opportunities resulting from ESCO and PPP legislation in place, and key principles of introducing ISO 50001-based energy management systems in the cities. The IFIs gave presentations on current portfolios and financing opportunities in the municipal sector with particular emphasis on energy efficiency. Extensive capacity building was also conducted as a part of introducing energy management functions in partner municipalities (Task 2.3 of the Project). Other Training The Project conducted training seminars on development and implementation of projects on “Natural Gas Substitution with Biomass for Heat Energy Production in Ukraine” for partner cities, communal enterprises, and private partners (investors). The seminars focused on increasing partner awareness of the benefits of using natural gas to replace biomass, biomass resource potential, technologies, and potential funding sources. The Project organized training workshops on “Preparation of Clean Energy Project Proposals.” The events were attended by representatives of partner cities, SAEE and MinRegion, IFIs, project experts, and staffs of Regional Training Centers. The Project gave a presentation on the preparation cycle for clean energy projects in municipal areas, such as DH, water/wastewater, municipal transport, buildings, and street lighting. Representatives of the partner cities discussed possible use of the proposed clean energy project preparation methodology to implement their SEAPs. Representatives of IFIs—WB and NEFCO—informed participants about the financial instruments and mechanisms available and encouraged cities to apply for clean energy financing. Project Proposals Preparation MERP was actively involved in preparation of project proposals (business plans, prefeasibility studies, and in-depth EAs) for energy efficiency/clean energy projects in partner localities. In preparing these, MERP relied on highly specialized local expertise in the areas of transportation, DH, public buildings, and other sectors.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 57 The approach to projects preparation was demand driven, based on cities’ priorities, discussions, and requests received from the Project partners. This approach was used to ensure further application and use of MERP-developed products to mobilize funding from public (municipal and state budgets), IFIs, and private sector. All stages of the projects’ preparation were conducted in close cooperation with local counterparts to ensure they fully understood the processes: scope of work (SOW) development,28 initial data collection, development of alternative options, analysis, and conclusions/recommendations. The municipalities were actively involved in discussions related to interim and final project proposals. Such an approach also helped enhance municipal capacity in preparing clean energy projects. If external financing was considered for a project, the proposal included analysis and preparation of alternative options based on or tailored to specific financing conditions of IFIs (EBRD, NEFCO, EIB, and Kreditanstalt für Wiederaufbau [KfW]). Demonstration Projects in Residential Buildings The Project Developed a concept paper for implementing clean energy projects co-financed by equipment and materials producers, local authorities, and buildings residents. Four concepts of different clean energy projects were developed for two types of multiapartment residential buildings, because these two types represent up to 80 percent of the residential buildings in Ukrainian cities: a 5-story “Khruschevka” building (50 flats) and a 9-story sectional (panel) building (144 flats). The projects included: • Project 1: Modernization of a vertical one-pipe heating system into a horizontal system, including four possible rearrangement scenarios; • Project 2: Heat pumps of the “air–water” type for heating water in the hot (tap) water supply system; • Project 3: Solar collectors for heating water in the hot (tap) water supply system; and • Project 4: Photovoltaic solar elements for the lighting of staircases in a building and adjacent territory. The focus was on the replication potential of such projects throughout Ukraine. Through an open competitive process, the Project conducted a selection of HOAs interested in implementing these demo projects and provided support for development of the design and cost documentation. Demonstration Projects in Public Buildings Based on an extended SOW (support to localities in Eastern Ukraine and Odesa region), the Project conducted competitive selection of demonstration projects for further MERP support. State educational institutions, municipal organizations, and local self-government bodies from partner cities in Odesa Oblast and Eastern Ukraine were invited to participate. The Project received 32 applications and, as a result of the evaluation, the six grant projects were approved for funding with MERP support.

28 In a number of cases, development of a SOW for project proposals preparation was conducted with involvement of partner locality and/or IFI.

58 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan For the demo projects where MERP provided equipment and materials, the Project conducted environmental assessments. Project Implementation Support To support implementation of WB projects, MERP experts developed the Report with Guidelines on Establishment and Operation of Local PIUs. This document was presented and distributed to all partner cities that participate in the WB DH energy efficiency projects. MERP conducted seminars for partner cities participating (included in the preliminary list for financing) in the EIB on the Municipal Infrastructure Program (and some cities on the Urban Public Transport Project. The purpose of the seminar was to provide a general overview of PIU roles and responsibilities during the projects’ preparation and implementation. Based on specific requests received from partner cities, MERP supported implementation of IFI- funded (WB, EBRD, NEFCO) projects in public buildings and DH sectors. In particular, these included conducting EAs, developing technical specifications for procurement actions, capacity building of local PIUs, and providing support in preparing procurement documentation to allow for funds disbursements. Key Actors and Counterparts The key counterparts at the municipal level included profile departments of city administrations (economic, educational and other sectors) and local utility companies. At the regional level, the Project cooperated with Oblast Administrations (Odesa, Luhansk and Donetsk regions) and Oblast Councils (Odesa region). Experts and Consultants The details on main subcontractors involved in implementation of MERP activities at the municipal level are provided in Annex 6. Deliverables and Accomplishments The projected supported 25 cities in preparing SEAPs or SECAPs. As of the date of this report, 22 plans were approved by the city councils. The details on SEAPs and SECAPs prepared under MERP are presented in Table 1.

Table 1. SEAPs Status for Partner Cities

SEAP/SECAP Development/ SEAP/SECAP SEAP/SECAP SEAP/SECAP City Improvement29 Timeframe Status Approval Date (D or I)

Chernihiv D 2015-2020 Approved June 4, 2015 Dnipro D 2015-2020 Approved March 11, 2015 Ivano-Frankivsk I 2015-2020 Approved July 28, 2015 Kherson D 2015-2030 Approved February 20, 2015 Kramatorsk D 2015-2025 Approved April 22, 2015

29 The Improvement means that there was a SEAP, but based on the request from the city, a new SEAP was developed.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 59 Table 1. SEAPs Status for Partner Cities

SEAP/SECAP Development/ SEAP/SECAP SEAP/SECAP SEAP/SECAP City Improvement29 Timeframe Status Approval Date (D or I)

Lutsk I 2015-2025 Approved October 6, 2015 Zaporizhzhia D 2015-2030 Approved March 25, 2015 Vinnytsia I 2015-2030 Approved Feb 24, 2017 Ternopil I 2015-2030 Approved Aug 18, 2016 2016-2020, Khmelnytskyi D Approved May 18, 2016 2021-2030 2016-2020, Rivne D Approved April 21, 2016 2021-2030 Final version Kyiv30 D 2012-2025 prepared Sumy D 2015-2023 Approved Sept 28, 2016 Pavlohrad D 2015-2020 Approved May 24, 2017 Kryvyi Rih I 2016-2025 Approved April 26, 2017 Odesa Oblast Izmail D 2017-2030 Approved March 31, 2017 Bilhorod- D 2017-2030 Approved April 20, 2017 Dnistrovskyi Reni D 2017-2030 Approved July 26, 2017 Balta D 2017-2030 Approved October 28, 2017 Final version Yuzhne D 2017-2030 TBD prepared Final version Chornomorsk D 2017-2030 TBD prepared Bolhrad D 2017-2030 Approved November 22, 2017 Eastern Ukraine Rubizhne D 2017-2030 Approved November 29, 2017 Myrnohrad D 2017-2030 Approved December 13, 2017 Pokrovsk D 2017-2030 Approved December 12, 2017

The SEAPs/SECAPs for partner cities envision total CO2 emissions falling by approximately 3,500 thousand tons by 2020. The investments required to achieve this target are estimated at about USD 1.8 billion. During CY2015–2017, the cities mobilized (actual and planned investments under approved plans31) approximately USD 153 million.

30 As of the date of this report, it has been approved by the city council. 31 Does not include investments made by the cities of Kyiv, Yuzhne, and Chornomorsk.

60 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Regional Energy Planning – Odesa Oblast In February 2018, the final draft of the Odesa REP was presented in Odesa. The event was attended by 25 participants, including Odesa Oblast State Administration; oblast council deputies; members of the Working Group on REP Development; representatives of eight cities’ signatories of the CoM (Balta, Bilhorod-Dnistrovskyi, Bolhrad, Izmail, Odesa, Reni, Chornomorsk, Yuzhne); members of the Public Council attached to Odesa Oblast State Administration; and USAID COR. The Acting Head of the Housing and Municipal Economy Department of Odesa Oblast State Administration communicated appreciation to the USAID Project for assistance in developing the Ukraine REP, the first of its kind in Ukraine, which they view as the road map on improving energy efficiency at the oblast level. Odesa Oblast authorities expect the implementation of the Odesa REP will be successful as well as SEAPs of Odesa Oblast cities, which are currently under implementation and already showing promising results. The final version of the Odesa REP was submitted to regional authorities in February 2018. Implementing the REP will make it possible for the region not only to save nearly UAH 2.6 billion (~USD 100 million) by 2022, but also reduce its consumption of energy resources (natural gas by more than 22 percent and electricity by 36 percent), lower CO2 emissions, and diversify energy generation with renewable resources. The REP investment program includes energy efficiency projects in various sectors of the regional economy, which will require UAH 29.5 billion (~USD 1.1 billion) to implement by 2022. Preparation of Clean Energy Investment Strategies and Projects Catalogues In cooperation with the cities, the Project prepared investment projects catalogues (registers) and/or investment strategies32 for 20 partner cities. They contain 849 descriptions for projects in various municipal sectors and corresponding potential funding sources. The catalogues serve as roadmaps for municipal managers in assessing and selecting financing options. The details are provided in Table 2.

Table 2. Сlean Energy Investment Strategies and Projects Catalogues

Number of Amount of # City Document Name Projects/ Investment, Measures UAH million

1 Kyiv Registry of Investment Projects for 2015-2030 34 143,748

2 Zaporizhzhia Registry of Investment Projects for 2015-2030 16 19,036

3 Kramatorsk Registry of Investment Projects for 2017-2031 49 2,641

4 Pavlohrad Registry of Investment Projects for 2015-2030 13 4,664

32 The investment strategies were developed and approved by city councils for the cities of Vinnytsia, Lutsk, Khmelnytskyi, Chernihiv, Izmail, Bilhorod-Dnistrovskyi, Myrnohrad, Pokrovsk, and Rubizhne.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 61 Table 2. Сlean Energy Investment Strategies and Projects Catalogues

Number of Amount of # City Document Name Projects/ Investment, Measures UAH million

5 Kherson Registry of Investment Projects for 2015-2030 16 6,805

6 Vinnytsia Catalogue of Investment Projects through 2020 50 2,724

7 Chernihiv Catalogue of Investment Projects through 2023 72 1,385

8 Khmelnytskyi Catalogue of Investment Projects through 2025 60 2,075

9 Lutsk Catalogue of Investment Projects through 2025 89 1,229

10 Dnipro Catalogue of Investment Projects through 2025 23 4,816

Ivano- 11 Catalogue of Investment Projects through 2020 25 1,097 Frankivsk

12 Kryvyi Rih Catalogue of Investment Projects through 2025 31 5,060

13 Rivne Catalogue of Investment Projects through 2030 32 2,227

14 Sumy Catalogue of Investment Projects through 2023 25 1,784

15 Ternopil Catalogue of Investment Projects through 2030 28 3,003

Bilhorod- 16 Investment strategy through 2030 58 2,704 Dnistrovskyi

17 Izmail Investment strategy through 2030 62 2,843

18 Myrnohrad Investment strategy through 2030 41 2,397

19 Pokrovsk Investment strategy through 2030 69 3,872

20 Rubizhne Investment strategy through 2030 56 2,709

Total for 20 cities 849 216,819

Total for 20 cities, ~ USD million 8,340

62 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Regional Assessments To support implementation of SEAPs and preparation of natural gas substitution heating projects, MERP conducted regional assessments of biomass potential for several regions, including in-depth assessments for Odesa and Luhansk and overview for Dnipro, Kherson, Sumy, Vinnytsia, and Donetsk regions. Project Proposal Preparation Summary results on the proposal preparation and project implementation support are provided in Table 3 and Table 4.

Table 3. Project Proposal Preparation and Implementation Support by Sector

Approximate Value, USD Million Area # of Projects Implementation New Projects Total Support

District Heating 22.0 162.1 54.9 217.0

Energy Management 1.0

Public Buildings33 24.0 187.5 19.1 206.6

Residential Buildings 1.0 7.5 7.5

Solid Waste 6.0 10.3 10.3

Street Lighting 3.0 2.4 2.4

Transportation 4.0 80.9 80.9

Water/Wastewater 5.0 27.8 27.8

Total 66.0 478.5 74.0 552.5

33 As a part of project proposals preparation, MERP conducted over 800 EAs of public buildings throughout Ukraine.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 63 Table 4. New Project Proposal Preparation and Funding Mobilization from IFIs and Private Sector34 (by project year)

Status Year 2 Year 3 Year 4 Year 5 Total

# of Project proposals under development (end of 13 11 7  year)

# of Project proposals finalized and presented 5 21 27 7 61

Cumulative value, million USD 26 197 479 479 479

# of Project proposals accepted for funding 3 1 9 3 16

Cumulative funding mobilized for new projects, 3.6 4.2 97.1 120.4 120.4 million USD

Details on the project proposals prepared for each partner locality can be found in Annex 11. Energy Audits of Buildings – Odesa Oblast and Eastern Ukraine In addition to preparation of project proposals, the USAID Project conducted EAs of public and residential buildings. These audits formed a basis for thermomodernization, and will enable the municipalities to attract IFIs and private and public sector funding for the implementation of energy efficiency measures. A summary of the EAs is presented in Table 5.

Table 5. Energy Audits of Public and Residential Buildings in Odesa Oblast and Eastern Ukraine

Number of Buildings Estimated Value of Proposed City Energy Efficiency Public Residential Total Measures, USD million

Odesa Oblast

Yuzhne 7 7 14 1.68

Bolhrad 9 3 12 2.48

Bilhorod-Dnistrovskyi 10 5 15 3.35

Balta 8 5 13 2.32

Chornomorsk 11 5 16 1.69

Reni 3 14 17 2.76

34 As of March 31, 2018.

64 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Table 5. Energy Audits of Public and Residential Buildings in Odesa Oblast and Eastern Ukraine

Number of Buildings Estimated Value of Proposed City Energy Efficiency Public Residential Total Measures, USD million

Izmail 7 5 12 4.22

Eastern Ukraine

Pokrovsk 7 5 12 1.38

Myrnohrad 4 8 12 1.93

Severodonetsk 7 5 12 3.08

Rubizhne 7 10 17 1.33

Bahmut 14 5 19 0.95

Dobropillya 5 9 14 0.55

Slovyansk 18 8 26 6.46

Kharkiv 15 5 20 9.86

Total 132 99 231 44.04

Demonstration Projects in Residential Buildings MERP prepared design and cost documentation for the demo projects in residential buildings. The demo projects’ details and corresponding project values are provided in Table 6.

Table 6. Residential Sector Demo Projects

Project Project Status of Value, Value, # City/HOA Description Design million million UAH USD

Reconstruction of the heating system in Finalized, Zaporizhzhia the 9-story 144-apartment building positive 1 (change from vertical to horizontal pipe 7.02 0.27 “Charivnyi expertise system with installation of individual Svitanok” received regulation and metering devices)

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 65 Table 6. Residential Sector Demo Projects

Project Project Status of Value, Value, # City/HOA Description Design million million UAH USD

Development of design and estimate documentation for the project on Finalized, reconstruction of the artificial electrical Lviv positive 2 lighting system in the staircases using 5.57 0.21 expertise “Initsiativa” photovoltaic cells, and of the hot water received supply system using solar collectors in the 9-story 107-apartment building Development of design and estimate documentation for the project on Finalized, Kamyanets – reconstruction of the artificial electrical positive 3 Podilsky lighting system in the staircases of a 5- 0.19 0.01 expertise story 30-apartment building and adjacent “Lermontova-2” received territory with use of photovoltaic solar cells Finalized, Lviv Reconstruction of the heating system of a positive 4 3.79 0.15 “MZhK-1” 212-apartment building expertise received Reconstruction of the artificial electrical Finalized, Dnipro lighting system in the staircases of a 9- positive 5 story 108-apartment building and 0.3 0.01 “Krasnopilska expertise adjacent territory using photovoltaic solar 4A” received cells

TOTAL 16.87 0.65

Demonstration Projects in Public Buildings MERP developed and received USAID approvals for environmental review checklists (ERCs) for the following demo projects: • Modernization of “Teremok” kindergarten building in Izmail • Modernization of “T.P. Bondar” secondary school building in Bendzary Village, Balta • Modernization of “Zhuravlyk” kindergarten building in Bolhrad • Modernization of “Kazka” kindergarten building in Dobropillya, Donetsk Oblast The details on MERP support to demonstration projects in public buildings35 are presented in Table 7.

35 It is anticipated that implementation of the demonstration projects will start in 2018.

66 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Table 7. Demonstration Projects in Public Buildings

Project Status of Project Value, # MERP Support Provided Design Location “000” Documentation UAH

• Development of design and cost documentation Finalized, obligatory 1 Izmail 2,620 • Supply of energy-efficient kitchen equipment, expertise LED lamps, energy-efficient windows, solar conducted system for hot water preparation

• Development of design and cost documentation Finalized, obligatory 2 Bolhrad 2,470 • Supply of LED lamps, energy-efficient expertise windows and doors, solar system for hot conducted water preparation, ventilation systems

Finalized, Severodonetsk, obligatory 3 • Development of design and cost 167,950 Rubizhne documentation expertise conducted

• Supply of ventilation systems, materials for Finalized, 4 Balta walls and roof insulation, heating system obligatory 4,020 materials and equipment, boiler room expertise pending materials and equipment, electric equipment

Finalized, obligatory 5 Bahmut • Development of design and cost 1,060 documentation expertise conducted

• Development of design and cost Finalized, documentation obligatory 6 Dobropillya 7,260 • Supply of LED lighting systems, ventilation expertise systems, modular individual heat substation conducted

Finalized, obligatory 7 Mariupol • Development of design and cost 16,700 documentation expertise conducted

Finalized, obligatory 8 Mariupol • Development of design and cost 6,070 documentation expertise conducted

TOTAL 208,150

TOTAL, USD million 7.85

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 67 Leveraging USAID Clean Energy Funding – Results Through March 31, 2018, the project leveraged USAID clean energy funding36 at the ratio of 1:20. A summary information on USAID clean energy funding leveraged from other donors, IFIs, government entities and private investors is provided in Table 8.

Table 8. Funding Mobilization by Project Year

Item Year 2 Year 3 Year 4 Year 5 Total

A. Projects 52.6 0.6 118.0 23.2 194.4

New projects funding 3.6 0.6 92.9 23.2 120.4

Implementation support 48.9 25.1 74.0

B. Invested under SEAPs implementation37 11.4 48.4 76.0 152.8

C. TOTAL, USD million 63.9 49.1 193.9 23.2 330.1

D. MERP contract value38 USD million 16.5

Leverage (C)/(D) 20

It is anticipated that in CY2018, up to USD 100 million will be further mobilized from IFIs and private and public sector based on: (1) EAs of public and residential buildings; (2) new project proposals developed under MERP; and (3) documentation prepared for demonstration projects in public and residential buildings sectors. In addition, we expect that over USD 100 million will be invested under SEAPs implementation. Sustainability and Project Legacy Enforcement The details on potential continuation of MERP tasks by donors, IFIs, and other stakeholders are provided in Annex 7. Task 2.3. Introduction of Energy Management Systems Key Processes/Approach National Level MERP experts prepared and presented the comprehensive Energy Management Manual in accordance with ISO 50001. Based on the manual, the Project conducted introductory trainings for the partner cities.

36 Excludes funding under “warm loans” program supported by MERP. 37 Excludes projects prepared or supported by MERP. 38 Total project value for four project components as of March 29, 2018.

68 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan The manual was designed for managers of the municipalities, providers of communal services, and specialists within local communities. Also, it will be useful for university teachers, students in energy departments, and professional energy auditors. It provides fundamentals of the energy management system, implementation methods, and positive results of the system functioning, irrespective of the size and ownership form of the company or object. In coordination with other donors, MERP assisted the GOU (e.g., SAEE) in reviewing and approving and enforcement actions and documents for the implementation of energy management systems. In particular, this included assistance with adoption of ISO 50001 – Energy Management Standard in Ukraine. Another five key energy management standards approved by the GOU were supported by USAID Project through consultations. MERP prepared and presented to SAEE the report, “On Analyses and Practices of Implementation of Directive 2012/27/EC regarding Energy Management and Energy Audits.” This report provides a review of the practices of implementation, obligations and requirements under Article 8 of EU Directive 2012/27/EC on energy efficiency in EU member states, in regard to practices and incentives for the introduction of EAs and energy management systems in the housing and communal services sector and municipalities. Following approval of the CMU Resolution39 on Approval of a Plan of Implementation of energy Management in Budget Institutions, the Project assisted with implementing this plan by developing a methodology for monitoring, guidelines for energy management, limits for energy consumption, and use of funds received from savings. MERP supported establishment and initiation of an internationally recognized energy management certification program and certification board in Ukraine (based on that of the AEEU40). The project supported several national-level public events (forums, conferences) promoting energy management. Municipal Level USAID Project assisted partner cities and utilities with improving energy management systems, formulating energy management organization charts with descriptions of roles and the responsibilities of energy managers, and conducting training and capacity-building activities. For the first and second groups of cities, the project experts, in cooperation with city administrations, developed packages of draft documents required to establish energy management systems in accordance with ISO 50001. On an as-needed basis, the package covered the following: • Concept of energy management system (EMS) implementation in the city; • Decision of the City Council on implementation of municipal EMS;

39 http://www.kmu.gov.ua/control/uk/publish/article?art_id=249947129&cat_id=244276429 40 http://www.aee-ua.org/

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 69 • Scheme of operational and/or project information flow; • Regulations on creation of EMS support structures; • Job descriptions for managers at different levels of responsibility; • Regulations to implement energy saving incentives for relevant personnel; • Methodology and tools for monitoring and analysis of energy consumption in public buildings and DH (boiler houses); • Guidelines for energy consumption analysis and decision-making outline; and • Resolutions on conducting external and internal audits of the EMS. Based on the requests from the cities, MERP provided extended assistance to heating utilities and administrations, in particular preparing them for introduction of energy management (Ternopil) and certification for compliance with the ISO 50001 standard (Sumy). For the cities from Eastern Ukraine and Odesa region, MERP conducted workshops on energy management for the representatives of municipal and regional administrations of Odesa Oblast and Eastern Ukraine (Luhansk and Donetsk oblasts). More than 60 people attended the events. The trainings consisted of several modules aimed to increase municipal capacity to manage energy resources, conduct EAs, identify energy efficiency projects, and monitor and verify energy savings. MERP further assisted with the establishment of energy management in these municipalities. This included support to the development of energy management documentation and consultations through a web-based platform created by the School of Energy Efficiency, an NGO, with MERP support (http://see.org.ua/ua/forum-enfo). Key Actors, Counterparts and Donor Coordination The key counterparts at the municipal level included profile departments of city administrations (economic, educational, and other sectors) and local utility companies. The municipal-level work was coordinated with GIZ, EU, and governmental and nongovernmental entities to avoid duplication and ensure synergy of actions. At the national level, the Project cooperated with SAEE, professional associations, and donors (GIZ, UNIDO). Experts and Consultants The details on major subcontractors and consultants involved in implementation of MERP activities are provided in Annex 6. Deliverables and Accomplishments National Level SAEE officially issued a report41 containing inter alia recommendations to local authorities on the implementation of the EMS in public buildings via its website. The recommendations make provisions on: (i) introduction of EMS in budget institutions funded at the expense of local

41 http://saee.gov.ua/uk/news/1923,http://saee.gov.ua/sites/default/files/ENERGY_MANAGEMENT_14_08_2017.docx

70 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan budgets; (ii) monitoring of consumption of fuel and energy resources by budgetary institutions; (iii) material incentives for those responsible for implementing EMS in budget institutions; and (iv) establishment of energy consumption limits by budgetary institutions. The implementation of energy management will enable 5 to 8 percent energy saving due to energy-efficient consumer behavior, and up to 20 percent reduction of power consumption due to the establishment of energy-efficient operation of facilities without additional investment. The report and recommendations were developed by MERP in cooperation with SAEE. Municipal Level Summary information on EMS implementation (monitoring data) in partner cities is presented in Table 9.

Table 9. Summary Information on Energy Management System Implementation in Partner Cities

# City EMS Comments

1 Ivano-Frankivsk Yes EM unit within City Administration

EM units within City Administration and Municipal 2 Ternopil Yes Enterprise Municipal 3 Rivne Yes Enterprise ESCO “Rivne” EM unit within City Administration, Municipal 4 Dnipropetrovsk Yes Enterprise

5 Sumy Yes EM unit within City Administration

6 Kryvyi Rih Yes EM unit within City Administration

7 Kramatorsk Yes EM unit within City Administration

8 Kherson Yes Municipal enterprise “ESCO”

9 Pavlohrad Yes EM unit within City Administration

EM unit within City Administration and Municipal enterprise 10 Kyiv Yes “GVP”

11 Zaporizhzhia Yes Municipal enterprise “Municipal Energy Agency”

12 Lutsk Yes EM unit within City Administration

13 Chernihiv Yes EM unit within City Administration

14 Vinnytsia Yes EM unit within City Administration

15 Khmelnytskyi Yes EM unit within City Administration

EM function introduced–specialists in several departments 16 Balta Yes perform EM functions (city administration)

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 71 Table 9. Summary Information on Energy Management System Implementation in Partner Cities

# City EMS Comments

17 Bakhmut Yes EM department functional

18 Bilhorod-Dnistrovskyi Yes EM function introduced–specialist in EM (city administration)

19 Izmail Yes EM function introduced (communal enterprise)

20 Kremenchuk Yes EM department functional

21 Mariupol Yes EM department functional

EM function introduced–specialists in several departments 22 Pokrovsk Yes perform EM functions (city administration) EM function introduced–specialists in several departments 23 Reni Yes perform EM functions (city administration) EM function introduced–specialists in several departments 24 Rubizhne Yes perform EM functions (city administration)

25 Slavyansk Yes EM function introduced–specialist in EM (city administration)

EM function introduced–specialists in several departments 26 Chornomorsk Yes perform EM functions (city administration)

27 Yuzhne Yes EM function introduced–specialist in EM (city administration)

The results of monitoring energy consumption by the partner cities (first and second groups) showed energy savings42 at the level of 7 to 12 percent. This can be attributed to energy management introduction and consequent implementation of energy efficiency measures by partner municipalities. Support to Certification in Accordance with ISO 50001 – City of Sumy The establishment of energy management in the city was supported by MERP; in particular, this included development of comprehensive energy management documentation and supporting approval process by the city (instructions, policies, procedures), conducting capacity building and training for over 170 persons, and performing internal audit of EMS to ensure compliance with ISO 50001 and to prepare for certification. In February 2018, the Audit Report on certification of Sumy City Council in accordance with ISO 50001 Energy Management standard was issued. The audit was conducted by TMS (official representative of TÜV SÜD in Ukraine) in January 2018. The audit conclusion is that the city is eligible to receive the ISO 50001 certificate. Sumy is the first large city in Ukraine that will receive ISO 50001 certification.

42 For the public buildings sector.

72 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Sustainability and Project Legacy Enforcement The details on potential continuation of MERP tasks by donors, IFIs, and other stakeholders are provided in Annex 7. Task 2.4. Development Credit Authority Loan Guarantee Key Processes/Approach On October 24, 2013, a Guarantee Agreement was signed between USAID and private stockholding company joint-stock commercial Bank Lviv to increase its client base eligible for borrowing money for energy efficiency projects. To support USAID efforts regarding new Development Credit Authorities (DCAs), MERP experts conducted assessment of the willingness of local banks to use Development Credit Authority Loan Guarantee for financing residential energy efficiency improvements.43 The assessment included express analysis of 50 local banks and selection of 20 with the best financial standing as of January 1, 2014. These banks were contacted regarding potential interest in using DCAs. However, due to the economic and political situation in the country in 2014, only three small banks expressed interest. Moreover, there was low demand for loans from businesses and residents, and uncertainty around the dramatic changes in monetary policy of the country at that time (exchange rate and inflation). The assessment report was submitted to USAID. The Project conducted regular meetings with Bank Lviv to discuss support to loans disbursement and utilization of DCAs. The participants discussed training needs on clean energy/energy efficiency projects with the bank’s personnel. Based on these discussions, the Project developed training materials and conducted capacity-building training sessions for Bank Lviv personnel. Overall, 13 training sessions were conducted on the following topics: operations of HOAs; ESCOs; energy efficiency in multifamily residential buildings; energy efficiency in the hotel, restaurant, and catering industry (HORECA), food industry, wood processing, consumer goods industries, and others. Based on requests received from the bank, MERP experts provided support in analyzing energy efficiency/renewable energy project proposals. The Project promoted financial products (loans) offered by the bank and disseminated relevant information at several conferences and other events related to energy efficiency in the residential sector. However, even with DCA and MERP support, Bank of Lviv was not able to compete with the “warm loans” energy efficiency program implemented through Ukrainian State-owned banks. The level of DCA utilization was only about 10 percent as of December 31, 2015.44 Taking into account this fact, the Guarantee Agreement was amended in March 2016, and the bank started applying the subject guarantee for issuing general small and medium enterprise (SME) loans rather than loans exclusively for energy efficiency projects. The expansion of the coverage of loan guarantees to include general SME loans resulted in greater usage of this guarantee.

43 In addition to Bank Lviv, which was already enrolled in DCA. 44 In part, low usage of DCA guarantee can be attributed to Ukrainian economic conditions in 2014-2015.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 73 Deliverables and Accomplishments Since the beginning of 2014, Bank Lviv has received 48 applications and issued 22 energy efficiency loans for a total of UAH 9.684 million, EUR 1.95 million, and USD 0.55 million (approximate total value USD 3.024 million). The bank issued 10 loans to local SMEs totaling USD 500,000 (1 loan), EUR 500,000 (1 loan) and UAH 1,711,300 (5 loans). The details on loans disbursed are provided in Annex 8. The DCA utilization dynamics are shown in Table 10.

Table 10. Development Credit Authorities Operations by Project Year

MERP Year Indicator TOTAL Year 1 Year 2 Year 3 Year 4

Number of applications 9 6 14 18 47

Number of loans issued 7 1 1 13 22

Value of loans issued, USD 974,582 22,189 781,250 1,246,329 3,024,350

Cumulative value of loans issued, USD 974,582 996,771 1,778,021 3,024,350

DCA utilization ratio, percent 11 12 23 37

The bank informed the Project that it is satisfied with the current usage of DCA guarantee, believes that this program is successful, and would like to have the DCA coverage expiration date extended beyond September 2020. This, in their opinion, would improve usage of the guarantee. Now, with slow recovery of economy, crediting is becoming more active beyond the DCA facility, since most of the credits to SMEs are issued for replenishment of working capital. Task 2.5. Support Mechanisms That Mobilize Private Sector Investment Key Processes/Approach MERP support to private sector resources mobilization targeted the areas described below. ESCO Mechanisms Promotion and Implementation MERP provided implementation support for legal and organizational issues related to energy- efficient modernization of public buildings in Kyiv (NEFCO loan envisions utilization of ESCO mechanism). The Project completed the database on public buildings for implementing energy efficiency improvements. This work was done in close cooperation with SAEE. The database includes 16,185 public buildings and covers 25 administrative regions across Ukraine (excludes Crimea and Sevastopol). The database will be used as an analytical tool to provide information on energy efficiency potential in the public buildings sector, and will serve as a reference for potential investors in energy efficiency projects, including those interested in implementing

74 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan different types of ESCO mechanisms at the municipal level. The information in the database covers the following: • region, type of area, location of a building; • government body, organization, or institution that manages the building; • primary purpose of the building; • description of the building (ownership; building year; total area; number of floors; building materials; date of last capital overhaul); • availability of meters; • implementation of building modernization measures (by type of measure); and • consumption of energy resources (by type of resource) during 2012-2014 (annual consumption; monthly consumption). In close coordination with IFIs, the Project conducted EAs and prepared a number of prefeasibility studies to assess the potential implementation of energy efficiency projects in public buildings sector using the ESCO mechanism (EBRD). To support the ESCO mechanism roll-out in Ukraine, MERP supported a series of seminars and other informational events on ESCO issues conducted by SAEE. The Project conducted energy scanning of public buildings and supported preparation of procurement documentation for ESCO mechanism implementation in Odesa and Odesa region localities. Development of Municipal EE/CE Projects Based on PPP Principles MERP conducted comprehensive analysis of PPPs’ potential for the partner cities from the first and second groups. As a result, a number of projects that could be implemented on PPP principles had been identified. Based on discussions and requests received from the partner cities, the Project prepared prefeasibility studies and provided legal support to implementation of energy efficiency/clean energy projects based on PPP principles. The extended support was provided to the cities of Khmelnitsky, Ivano-Frankivsk, Kyiv, Lviv, Teplodar, and Kamyanets-Podilsky. Residential Energy Efficiency Creation of and/or support to operations of clean energy resource centers MERP experts conducted assessment and developed a concept on creation of HOA/CE RCs in partner cities. The Project conducted capacity-buildings seminar and provided consulting support to HOA/CE RCs operations provided on a regular basis. The majority of centers were opened in cooperation with the cities’ administrations. In such cases, the Project supplied the centers with all necessary equipment, furniture, and outreach materials while the city administrations allocated the office space and paid for its renovation.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 75 Establishment and continuation and roll-out of “warm loans” program operated using Ukrainian State-owned banks Through participation in working group meetings (SAEE) and advocacy campaign, the Project actively supported establishment and continuation of the State program to support energy efficiency in the residential sector (the “warm loans” program). MERP, in cooperation with SAEE and IFC, supported trainings for commercial banks and potential borrowers (including condominiums) on energy efficiency projects in buildings and on banking products. The Project, in cooperation with SAEE and IFC, developed a methodology for monitoring and assessing the program. The purpose of this activity was to determine whether the goals of the national energy efficiency program are reached. MERP, in cooperation with SAEE and IFC, completed a national survey of HOAs and Housing Building Cooperatives participating in the national “warm loans” program. The survey covered 127 HOAs/Housing Building Cooperatives, which is 95.5 percent of those who participated in the program. The results of the survey showed that 98 percent of representatives of HOAs who participated in the state energy efficiency loans compensation program had a positive experience in getting reimbursements; 22.8 percent of those receiving support for energy efficiency measures reported that MERP HOA/CE RCs have been the primary source of information regarding the compensation program. MERP provided analytical support to national survey of households participating in the national “warm loans” program. The Project experts reported on the methodology for monitoring and assessment of effectiveness of the program, and conducted training for SAEE personnel. The project disseminated information on the program by implementing a national public information campaign. Key Actors and Counterparts The key counterparts at the municipal level included profile departments of city administrations (economic, educational, and other sectors) and local utility companies. At the regional level, the Project cooperated with Odesa Oblast Administration and Oblast Council. Donor Coordination MERP coordinated with EBRD and NEFCO projects implementation in supporting and developing prefeasibility studies for thermomodernization of public buildings. The Project closely cooperated with IFC in supporting the “warm loans” program. Experts and consultants Details on subcontractors and consultants involved in implementation of MERP activities under this task are provided in Annex 6. Deliverables and Accomplishments ESCO mechanisms promotion and implementation The Project conducted EAs and prepared a number of prefeasibility studies to assess the potential implementation of energy efficiency projects in the public buildings sector. In particular,

76 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan this included project proposals based on EBRD lending mechanisms and criteria for the cities of Kremenchuk, Kropyvnytskyi, Kryvyi Rih, Odesa, Zaporizhzhia, and Kharkiv. The estimated value of the proposed projects (energy efficiency measures) is over USD 50 million. Based on the precedent of the Kremenchuk project prepared with MERP support,45 EBRD established a EUR 115 million Ukraine Public Sector Energy Efficiency Framework to provide loans to municipal energy management companies in Ukraine to finance energy-saving improvements in public buildings and street lighting infrastructure. This framework (facility) will enable the municipalities to finance energy efficiency efforts in public buildings and street lighting through energy performance contracts (EnPCs) implemented by private construction, engineering, or ESCOs. The investments are expected to significantly improve energy efficiency in public buildings and thereby lead to energy savings and reduced GHG emissions, as well as improved comfort levels at kindergartens, schools, and hospitals included in subprojects under the framework.46 As a result of MERP efforts, the Odesa Oblast Council, Odesa, and Bilhorod-Dnistrovskyi city councils announced 40 tenders for procurement of energy modernization services in general educational institutions on the prozorro.gov.ua web portal. As a result of Project support, 15 contracts were concluded with private ESCOs. According to investors’ estimates, implementation of these initiatives in the chosen government-funded institutions will enable these facilities to realize energy savings of 20 to 30 percent. Development of Municipal Energy Efficiency/Clean Energy Projects Based on PPP Principles As a result of MERP support, landfill gas utilization projects with private partners were begun in Ivano-Frankivsk, Khmelnytskyi, and Kamyanets-Podilsky. The projects envision installation of a gas-fired electricity generation unit (up to 1 MWt), which would permit the sale of electricity using the “green tariff.” The estimated private investments for each project are approximately UAH 25–35 million (approximately USD 1–1.2 million). The projects will secure the landfill and will improve environmental conditions in the region. Each project will result in annual CO2 emissions reductions estimated at 75,000 to 80,000 metric tons. For the City of Kyiv, the Project examined boiler houses supplying heat energy to public buildings and completed EAs of 19 buildings owned by 4 budgetary institutions, and developed preliminary technical solutions for the modernization of heating systems (use of biomass for production of heat energy). In addition, for the City of Kyiv, the Project prepared the feasibility study for the project, Modernization of Interior Heating Systems to Use Biomass for the Production of Heat Energy and Reconstruction of Public Buildings Based on Clean Energy PPPs. For the City of Lviv, the Project developed the concept for energy-efficient reconstruction of public buildings, including modernization of heating systems, on the basis of clean energy PPPs and the feasibility study for the project, Installation of Heat Pumps for the Heating System of Two Educational Institutions of Lviv (Lviv Technological Lyceum and kindergarten #14). For the City of Teplodar (Odesa Region), the Project developed the project concept and prefeasibility study for the construction of a biomass-fired boiler house, and supported the city

45 See Section on Task 2.2. 46 http://www.ebrd.com/work-with-us/projects/psd/ukraine-public-sector-energy-efficiency-framework.html

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 77 with a private investor search. The private investor is expected to start construction of the boiler house in May-June 2018. Creation of and/or Support to Operations of Clean Energy Resource Centers Overall, MERP supported establishment and operations of 18 HOA/CE RCs in partner cities. The details on HOA/CE RCs are provided in Annex 11. As a result of active outreach efforts, MERP RCs were able to conduct over 6,619 public outreach events at the local level (including trainings and meetings on establishing HOAs), and 15,055 initiative groups or/and individuals received consultations on legal, administrative, and technical issues. Some 4,198 new condominiums were created (from the beginning of 2015 through March 31, 2018), which is about 34.25 percent of all new HOAs established in Ukraine (12,254) during the same period. Establishment, Continuation, and Roll-out of “Warm Loans” Program Operated Using Ukrainian State-owned Banks As a result of the joint MERP and SAEE campaign on “warm loans” promotion and other program support actions, 274,662 loans (value of ~USD 195 million), including 1,248 loans to HOAs, were issued under the State program to support residential energy efficiency.47 Before the campaign began in June 2015, such loans had been taken by only 3,984 households and one HOA in the amount of UAH 71 million (

Table 11. Energy Efficiency “Warm Loans” Program Disbursements 2015–2017

Loans Issued Loans Issued Exchange Rate Cumulative, Reporting Date during the Year48 during the Year USD/UAH “000” USD in “000” UAH in “000” USD

September 30, 2015 575,316.36 0.04613 26,539.34 26,539.34 September 30, 2016 1,815,031.12 0.03831 69,533.84 96,073.19 September 30, 2017 2,332,352.52 0.03741 87,253.31 183,326.49 December 31, 2017 329,500.00 0.03529 11,628.06 194,954.55 TOTAL 5,052,200.00 194,954.55

The overall savings of natural gas resulting from the program implementation in 2014–2017 are estimated at 150 million cubic meters (M3).49 Sustainability and Project Legacy Enforcement The details on potential continuation of MERP tasks by donors, IFIs, and other stakeholders are provided in Annex 7.

47 As of December 31, 2017. 48 Project and/or USAID reporting year. 49 Based on SAEE information.

78 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Activity 2 – Overall Results

As a result of MERP’s activities in promoting private sector investment:  Local government capacity to develop and implement LED plans is enhanced  Municipal managers’ access to financial resources to implement clean energy and energy saving projects is improved  Municipal capacity to develop and implement clean energy investment projects is improved  USAID clean energy funding is leveraged at least 1:20 by other donors, government entities, and private investors  GHGs are decreased (per year and projected from baseline) as result of U.S. Government- assisted clean energy projects

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 79 Activity 3. Capacity Building and Dissemination

Objectives of Activity 3. Activity 3 aims to ensure replication and sustainability of the MERP Task Order through capacity building among Ukrainian institutions and dissemination of the Project’s accomplishments. The underlying principle of the approach is that direct capacity building in key audiences is necessary to create an enabling environment for implementing energy efficiency activities on a sustainable basis using market conditions, and to introduce standardized professional services in the context of the novelty and complexity of the associated legal and financial environment. Objectives of Activity 3 are summarized as follows: . Build capacity of local organizations (at least one local organization) and government institutions (at least one GOU institution or three local governments) to implement energy efficiency activities, institutionalize energy efficiency best practices, and receive direct assistance from USAID.

Task 3.1. Preparing a Local Nongovernmental Organization for a Direct Award from USAID Key Processes/Approach NGO Selection MERP developed the NGO Selection and Capacity Building Plan (SCBP). The SCBP envisioned the following elements: selection and capacity building of five local NGOs; development of a meaningful agenda (activities) to be implemented by local NGO(s); provision of subgrants to support implementation of activities agreed on with USAID; and preparation for certification and, conducted jointly with USAID, certification of eligibility and transitioning to direct USAID funding. MERP conducted a survey and identified candidates for capacity-building activities. The results of the survey were consolidated into the NGO mapping report. The Project developed selection criteria and issued a Request for Applications, which was advertised in media through partner organizations’ websites. To support the application process, MERP conducted an informational seminar to assist local NGOs with compiling applications.50 The following NGOs were selected for capacity building: 1. Association of Energy Engineers of Ukraine (AEEU) 2. Renewable Energy Agency 3. Association of Energy Auditors in Housing and Communal Services (AEA) 4. Association Energy Efficient Cities of Ukraine (EECU) 5. Committee of Ukraine's Energy Independence

50 The event was attended by 10 local NGOs.

80 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Conduct Organizational Capacity Assessment (OCA) The initial OCA, a self-assessment, was conducted by the NGOs as a part of the capacity building application process. The OCA grids51 were used to score each element of organizational capacity by selecting the level (text) that best describes the organization's current status or performance. To substantiate the findings of the assessments, MERP experts held meetings with key personnel of the selected NGOs to conduct more in-depth assessments and to review their operational policies and procedures. The following scores were assigned (and agreed with NGOs) to each of the elements stated in the assessment grids: • Clear need for increased capacity (low capacity in place) • Basic level of capacity in place • Moderate level of capacity in place • High level of (strong) capacity in place The assessment of NGOs’ technical capacity52 was conducted by MERP experts during the NGO selection process. In particular, this included: (1) evaluation of personnel and partners/members’ experience and qualifications; (2) prior experience, including donor projects; and (3) NGO approach to sustainable development and financing of organization (funding sources). Training Needs Analysis and Capacity-Building plans (CBPs) for NGOs The NGOs submitted training needs assessments as a part of the application process. The NGO personnel and staff members were able to identify the most urgent training needs. NGOs’ training needs were verified by MERP experts, and a training agenda was agreed on together with NGO personnel. The results of the assessments (organizational, technical, and training needs) for each NGO were consolidated into the CBPs. Training for Selected NGOs To improve NGOs’ organizational capacity, the Project conducted five training sessions (3 days each) covering the following areas: organizational management, administrative management, financial management, human resource management, leadership and team work, program/project management, and training related to technical areas. The Project also conducted training that covered key USAID regulations and requirements pertaining to local NGOs, and technical skills improvement training sessions, including Introduction to Municipal Energy Planning, Technical Aspects of Energy Efficiency, and Financing Mechanisms for Energy Efficiency Projects.

51 The assessment grids covered the following areas: Governance, Administration, Human Resource Management, Financial Management, Organizational Management, Program Management, Project Performance Management, Leadership, and Team Dynamics. 52 The details on selected NGOs are available in MERP files.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 81 CBP Implementation Project experts conducted regular monitoring of NGOs’ progress against parameters stated in the CBPs and the score cards. In particular, this included review of documentation developed by the NGOs with MERP support and regular meetings/communications with NGOs’ management and responsible personnel. To review the progress and to assist partner NGOs, the Project contracted a local consulting company to provide in-depth capacity-building support to three local NGOs (EECU, AEA and AEEU). Development of a Meaningful Agenda (activities) to Be Implemented by Local NGO(s) and Provision of Subgrants to Support Implementation of Activities Agreed on with USAID The Project prepared draft program descriptions for potential direct awards and plan for transitioning NGO from subaward to direct USAID funding. NGOs Selection for Subawards The Project prepared and issued an RFA to implement the projects, which contributed to the achievement of Project results. The projects listed in Table 12 were selected and further supported by MERP.

Table 12. NGO Capacity-building Subawards

Grant Project Recipient Name Project Title Amount, Duration UAH

Implementation of an Independent Association of Energy 10 calendar Certification System for Energy 578,637 Engineers of Ukraine (AEEU) months Management Specialists Practical Model of Local Government Energy Efficient Cities of 12 calendar Capacity Building for Efficient Energy 1,038,270 Ukraine (EECU) months Management Renewable Energy Agency Promotion of Natural Gas Substitution 10 calendar 1,181,159 (REA) with Biomass in Heat Energy Production months Support to Institutional Capacity of Association of Energy Ukrainian Cities in the Development and 10 calendar Auditors in Housing and 831,812 Implementation of Sustainable Energy months Communal Services (AEA) Policies

Preparation for Certification and Joint Certification of Eligibility with USAID Based on a transition plan agreed on with USAID, the Project conducted in-depth preparation of the Renewable Energy Agency (REA) for a direct USAID award. The preparation included a review and improvement of organizational policies and procedures and assistance with implementation. At the request of MERP, Ernst and Young (E&Y) conducted a survey of the financial and management systems of REA. The purpose of this survey was to determine whether REA has the ability or potential ability to comply with USAID and U.S. Government policies, and what degree of support is necessary to ensure the proper accountability for funds provided to the

82 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan organization. The results of the survey showed that certain areas require improvement. MERP developed a detailed action plan and addressed the survey findings. To facilitate the provision of direct award, MERP prepared a draft program description for the project, Clean Energy Development by Introducing Bioenergy Solutions in the Heating Sector (CEDBS). USAID conducted verification of the NGOs’ preparedness for direct award in August 2015. Performance of Local Partners as Subgrantees MERP conducted monitoring of grantees’ performance against subaward work plans. The grant projects implemented by NGOs were successfully completed. Key Actors and Counterparts The key counterparts for this task included NGOs, local professional associations, and municipal governments. Experts and Consultants The details on consultants, grantees, and subcontractors involved in implementation of MERP activities are provided in Annex 6. Deliverables and Accomplishments Key deliverables and accomplishments by local NGOs under subawards are provided below. 1) The AEA53 project entitled, Support to Institutional Capacity of Ukrainian Cities in the Development and Implementation of Sustainable Energy Policies: • Developed and updated the Catalogue of Financing and Technical Assistance Available for Implementation of clean energy/energy efficiency projects. • In cooperation with AUC, provided consultations to the cities regarding potential sources of funding and application procedures; provided analytical support to the cities aimed to identify energy efficiency projects for the third round of NEFCO “Demo Ukraine” loan program. • Supported introduction of energy management and energy monitoring, and developed SEAPs for the localities of Drohobych, Burshtyn, and Kuznetsovsk. • Supported experience exchange visits to the cities of Kyiv, Zhytomyr and Kamyanets- Podilsky. 2) The AEEU54 project entitled, Implementation of Independent Certification System for Energy Management Specialists: • Organized and conducted first-ever Certified Energy Manager (CEM) training for 20 Ukrainian energy professionals from different regions of Ukraine. Fifteen participants passed the exam and received certificates on energy management, and the five best participants received extra training to become authorized AEE (U.S.)55 trainers for the CEM program in

53 https://aea.org.ua/en/ 54 http://www.aee-ua.org/ 55 https://www.aeecenter.org/

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 83 Ukraine. This enabled the CEM program to continue locally without further assistance of U.S. instructors. • Through participation in working groups, supported the SAEE of Ukraine, with implementation of EMS in Ukraine. Conducted working meetings and ensured that there would be support for further certification training from local stakeholders. 3) The EECU56 project entitled, Practical Model of Local Government Capacity Building for Efficient Energy Management: • Conducted an assessment of energy management operations in 35 Ukrainian member cities (including 13 MERP partner cities). • Provided assistance to the cities of Kherson and Dnipropetrovsk in developing road maps for energy management implementation. • Developed guidance (roadmap) for Ukrainian municipalities on conducting EAs. • Conducted an assessment on the use of energy resources by the municipalities and published on the EECU website. Prepared a report on the use of municipal budget funds (in participating CoM cities), which was used to implement energy efficiency projects and arrange payment for energy resources. • Created manual for preparing and conducting a special event, the Sustainable Energy Days, in Ukrainian municipalities, and provided support for planning and/or conducting Sustainable Energy Days in the following cities: Sumy, Dnipropetrovsk, Rivne, Pavlohrad, Khmelnitsky, Ternopil, and Kherson. • Conducted training for MERP partner city representatives on developing investment proposals (applications) to implement energy efficiency projects. Four Ukrainian banks (Ukreksimbank, Ukrgazbank, Oschadbank, and Bank of Lviv), attended the event and presented their energy efficiency-related credit programs. 4) The REA57 project entitled, Promotion of Natural Gas Substitution with Biomass in Heat Energy Production: • Prepared the manual, Development and Implementation of Projects on Natural Gas Substitution with Biomass for Heat Energy Production in Ukraine, and conducted seminars on preparation of feasibility studies for biomass heat production projects for MERP partner cities. • Finalized an assessment of biomass potential (supply sources) for Kherson, Dnipropetrovsk, and Vinnytsia regions. • Prepared and presented prefeasibility studies for natural gas replacement with biomass in heat production projects for the cities of Kherson, Dnipro, and Vinnytsia. Sustainability and Project Legacy Enforcement All NGOs supported by MERP through capacity-building activities are currently sustainable and conducting activities relevant to MERP agenda and scope of work. Some activities include:

56 http://enefcities.org.ua/en/ 57 http://rea.org.ua/en/usaid

84 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan • Participation in GOU working groups related to institutionalization and development of energy management, EAs, and related regulatory framework in Ukraine (AEE, AEA); • Support to the cities in introducing energy management and energy monitoring, trainings in EAs and energy management58 (AEA); • Support to energy planning in Ukrainian municipalities and conducting energy efficiency promotion and dissemination events (EECU); and • Preparation of regional biomass assessments, capacity building of municipalities in preparing biomass heat production projects (REA). Cross Cutting: Transparency and Disclosure in the Municipal Energy Sector Key Processes/Approach Through legal and regulatory changes, public information and advocacy campaigns, and capacity building, MERP promoted improved transparency and disclosure of information in the municipal energy sector. Under Activity 3, the Project supported the following actions: • Coordination with key partners, including civil society groups, anticorruption ‘watchdog’ organizations, and investigative journalists; • Trainings on anticorruption for local civil society representatives and journalists; • Creation of networks and social media groups dedicated to anticorruption issues; • Support for local anticorruption initiatives and creation of local (city-level) anticorruption coalitions involving civil society; • Support for development and approval of legislative acts (national and local) designed to fight corruption in the municipal energy sector (in coordination with Task 1.1 activities); • Support for collection, analysis, publication, and distribution of information on anticorruption; • Disclosure of information to public (anticorruption monitoring); • Conducting local press conferences, presentations, and discussions to advocate transparency and disclosure in the sector; and • Cooperation with NGOs, anticorruption ‘watchdog’ organizations, and investigative journalists or agencies in conducting advocacy campaigns to increase transparency in the municipal energy and communal services sector. Key Actors and Counterparts The key counterparts for this task included civil society activists, NGOs, anticorruption ‘watchdog’ organizations, and investigative journalists. Experts and Consultants The Civic Network OPORA, a MERP grantee, implemented the activity.

58 https://aea.org.ua/projects/training-centers-for-energy-management/

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 85 Deliverables and Accomplishments OPORA built local informal coalitions and established monitoring of major anticorruption news at central and local levels for Chernihiv, Dnipro, Kamyanets-Podilsky, Kherson, Khmelnytskyi, Kryvyi Rih, Kyiv, Lviv, Lutsk, Rivne, Sumy, and Ternopil. OPORA also conducted trainings for local anticorruption and journalist groups. Three training- of-trainers (TOT) sessions were conducted. Subsequently, 30 regional trainers who passed three phases of training (theoretical and practical experience in fighting corruption in the energy and utilities sectors) went back to their regions to share their experiences. Forty-eight regional workshops/seminars were held, attended by over 752 activists from villages, towns, cities, and regions. Local activists practiced gaining access to public information, using the online registers, writing journalistic investigations, and communicating and cooperating with law enforcement agencies, and other actions. In addition, the Project developed an online application for local activists, which registered 47 volunteers from different cities for anticorruption monitoring. OPORA cooperated with them and supplied with weekly anticorruption news digests. OPORA conducted research and prepared analytical materials focusing on anticorruption issues in the energy and housing and communal services sectors, which were disseminated. These materials included informing the public about tariff calculations and investment programs of enterprises-monopolists; anticorruption surveys focusing on electricity consumption by water supply utilities and the consumption of energy resources by heating companies. OPORA developed informational materials and distributed information about potential corruption and/or abuse on the ZHYTLO59 page. OPORA moderated the open group (page) in Facebook called ANTILAPA. The page collects information on corruption cases and corruption risks in the energy, housing, and communal services sector. The page has over 1,800 participants, including well-known journalists, civil society activists, and officials. OPORA established regular communication and exchange of information with leading anticorruption and journalism organizations advocating for transparency in the energy sector, including the Anticorruption Center, Transparency International, DiXi Group, the Center for Energy Research, Nashi Groshi (Our Money), Slidstvo.Info, and others. These activities included participation in several public and media events, and presentation and distribution of informational materials related to increasing the transparency of tariff calculations, utility companies’ reporting on investment programs, and increasing the transparency of procurements by utility companies. OPORA was actively involved in conducting an advocacy campaign, and disseminated information on key legislative acts that will increase transparency of tariff setting and prevent corruption in the housing and communal services sector, in particular the Law on the National Energy and Utilities Regulation Commission and the Law on the Specifics of Access to Information in the Electric Energy Supply, Natural Gas Supply, District Heating, and Centralized Hot Water Supply, Potable Water Supply, and Wastewater Sectors.

59 https://zhytlo.in.ua

86 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Activity 3 – Overall Results

As a result of MERP assistance in the area of transparency and dissemination of information, the Project helped achieved the following outcomes: . Local capacity to implement clean energy initiatives through direct donor awards is improved. . EAs, MEPs, and energy management and monitoring are national norms; the GOU or local organizations have the ability to further develop energy efficiency technical standards to meet international standards (in conjunction with the results of Tasks 1.4 and Task 2.3). . Cooperation between municipal governments and the civil society sector is strengthened (in conjunction with the results of Activity 2). . Capacity of local NGOs and journalists to advocate transparency and disclosure in energy sector is improved. . Transparency and disclosure of information in the municipal energy sector is improved (in conjunction with the results of Tasks 1.1, 1.2, and 1.5).

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 87 ACTIVITY 4. Enhance Capacity of the Government of Ukraine in Low Emission Development Strategies

Objectives of Activity 4. Activity 4 aims to support Ukraine’s efforts to pursue long-term, transformative development and accelerate sustainable, climate-resilient economic growth while slowing the growth of GHG emissions. The Activity is designed to build capacity, to provide targeted technical assistance, and to develop a shared global knowledge base on LED. Objectives of Activity 4: . Strengthen institutional capacity in planning LEDS, goals of which include improving Ukraine’s National System of Inventory and Assessment of Efficient Use of resources, incorporation of LEDS into existing government planning systems for social and economic development, and improving national capacity to use strategic planning tools in support of LEDS. . Implement LEDS through support in developing and introducing clean energy technologies and energy services, including legislative and political support to LEDS, as well as institutional development and clean energy projects. . Develop a uniform database on LEDS and exchanging experiences and best practices with other countries participating in LEDS.

Approach The primary purpose of USAID MERP is to enhance Ukraine’s energy security. Increased end- use energy efficiency combined with the increased production of clean energy in large towns and cities will reduce the consumption of conventionally produced energy in Ukraine while cutting GHG emissions, energy expenditures, and imports.

MERP’s activity, Enhance Capacity for the GOU in LEDS, aimed to enhance the capacity of the GOU and its agencies regarding LED strategies, including strengthening institutional capacity in planning LEDS, implementing LEDS through support in developing and introducing clean energy MERP supported Ukraine’s development of technologies and energy services, and developing a national GHG emissions target and Paris master LEDS database of best available international Agreement ratification process and, in July practices for LED. 2016, Ukraine was one of the first nations in the world to ratify it. MERP supported the GOU in enhancing capacity in LEDS around broad thematic issues such as Ukraine’s Intended Nationally Determined developing the State Climate Policy Concept and its Contributions (INDC) to the Paris Agreement Action Plan, establishing a national GHG reporting sets an economy-wide GHG emissions target system and a national LEDS, Paris Agreement not to exceed 60 percent of GHG emissions ratification process, and others. level by 2030, compared to 1990. The Project assisted and/or supported development and/or adoption of three resolutions by Cabinet of Ministers. The result of the Project’s assistance to the GOU in Enhancing Capacity in

88 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan LEDS enabled the establishment of a principal framework for LEDS policy development and implementation in Ukraine. The approach followed by MERP was to assist and support the GOU through the following actions and directives: • Strengthening Institutional Capacity in Planning LEDS. MERP assistance to the GOU in Strengthening Institutional Capacity in Planning LEDS aimed to establish a system in Ukraine—through national legislation, international commitments, and human resources available—to develop and implement LEDS, thereby contributing to mitigation of global climate challenges. • Implementing LEDS through support in developing and introducing clean energy technologies and energy services. MERP assistance under this sub-task aimed to enable a technological component to be used in LEDS implementation and further GHG emission reduction. • Developing a uniform master database on LEDS, and exchanging experiences and best practices with other countries participating in Enhanced Capacity for LEDS (EC- LEDS). MERP assistance aimed to develop and populate a Ukrainian-language database of international and Ukraine-specific issues related to LEDS processes enablement, targeting state officials and a wide range of other stakeholders. Key Actors and Counterparts MERP cooperated with a wide range of organizations while providing assistance to the Task, Enhance Capacity of the Government of Ukraine in Low Emission Development Strategies. These organizations were: MinEcology; Committee on Environmental Policy, Nature Management and Liquidation of the Consequences of the Chernobyl Disaster of VR of Ukraine; Ministry of Economy (MinEconomy); MinRegion; SAEE; and State Environmental Investment Agency of Ukraine under MinEcology (before liquidation). Experts and Consultants The list of experts and consultants who assisted the Project in the Task, Enhance Capacity of the Government of Ukraine in Low Emission Development Strategies, is provided in Annex 6. Deliverables and Accomplishments MERP assistance to the GOU to Strengthen Institutional Capacity in Planning LEDS included work in the development and adoption of major strategic documents establishing climate policy framework in Ukraine and reporting the results to international counterparts. Project assistance was provided to develop State Climate Policy Concept until 2030 and relevant Action Plan, both adopted by the Cabinet of Ministers; the National Low Emission Development Strategy until 2050 was developed and currently is being processed under interinstitutional coordination. The Project assisted the GOU significantly at the Marrakech Climate Conference and with preparation of Sixth and Seventh National Communications on Climate Change, UNFCCC, and placing Ukrainian INDC on UNFCCC portal. With the assistance of the Project, a System of Monitoring, Reporting, and Verification (MRV) of GHG Emissions in Ukraine was developed and established. The effort covered development of a training curriculum and conducting trainings for some sectors (DH and cement entities);

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 89 development of Toolkit and Glossary on MRV on GHG emissions; and development of National GHG Inventory Enhancement Plan. As the result, Ukraine has the system of MRV of GHG emissions in place. The Project focused on capacity building of the GOU in the area, and the activity included training course for high-level GOU officials, ministries, and agencies on LEDS, as well as LEDS Study Tour to the United States for 13 state officials in 2017. MERP assisted the GOU in Implementing LEDS through Support in Developing and Introducing Clean Energy Technologies and Energy Services. The Project published a TNA Report for the Municipal Sectors, which provides specific information over how municipal energy entities can utilize the latest technical solutions to meet climate goals. The Project worked on development of Sustainability Criteria for Biofuels and Bio-liquids Production, including Methodology to Calculate GHG Emission Reductions during Production and Use of Biofuels and Bio-liquids. MERP provided assistance to the GOU in Developing a Uniform Data Base on LEDS and Exchanging Experiences and Best Practices with Other Countries Participating in Enhanced Capacity for EC-LEDS. This included inter alia development of a UA-LEDS database to assist Ukraine in selecting and applying low emissions technologies and tools and to meet its LEDS obligations. The database is operational, publicly available, and contains the newest information. The details on accomplishments and most important documents are provided in Annex 9 and Annex 10, respectively. Evaluation Recommendations The MERP Final Performance Evaluation (February 2018) did not address the MERP activity of Enhancing Capacity of the Government of Ukraine in Low Emission Development Strategies. Sustainability and Project Legacy Enforcement The Project conducted a series of meetings with donors active in the area. The anticipated further assistance by donors is provided in Annex 7. Activity 4 – Overall Results

. LEDS milestones and benchmarks are met. . The capacity of the GOU and other public and private stakeholders to develop and implement LEDS is increased.

90 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 5. Donor Coordination

Activity 1. Improve Clean Energy Regulatory and Legislative Enabling Environment Task 1.1. Developing an Enabling Legislative and Policy Environment While providing assistance under Developing an Enabling Legislative and Policy Environment, MERP collaborated with other donors active in the area, as follows: • IFC in the area of development, advocacy, and support to adoption of Communal Services Law • EU DEL in the area of development, advocacy, and support to adoption of Commercial Metering Law • EBRD in the area of development, advocacy, and support to adoption of the ESCOs package. Task 1.2. Assistance to National Energy and Communal Services Regulatory Commission (NEURC) Specific donors acted in the NEURC domain, contributing specific topics. MERP cooperated with EBRD on development and advocacy of regulatory packages to include loans for infrastructure investments in tariffs. The WB participated at the initial stage of discussion regarding financing asset revaluation by municipal entities. The project, Transition from Cost-plus Tariffs to Incentive-based Pricing–District Heating Sector, funded by SIDA and WB, was active in developing and piloting the transition to incentive-based regulatory instruments in DH. Taking into consideration overlapping scopes for both projects regarding assistance to NEURC, the coordination and responsibilities sharing was intensive. Task 1.3. Supporting Improvement of Social Safety Net for Vulnerable Populations There was intense donor coordination over efforts in the area of social system adaptation to dynamics of bills under sector reform, namely, EU DEL and WB. It is to be noted that the work of MERP in the area of improvement of social safety nets for vulnerable populations was a continuation of work under the predecessor project, the Municipal Heating Reform (MHR) Project. Task 1.4. Supporting Energy Efficiency Standards MERP coordinated its activities with EBRD, UNIDO, GIZ, and other donor organizations. Task 1.5. Public Information and Awareness MERP worked closely with the WB social protection team to ensure synergy in effective implementation of the social safety net outreach efforts. The WB and MERP worked on organizing a training series for the staff of social protection offices, including regional units of

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 91 MinSocPolicy, to facilitate the transition to the new subsidy mechanism offered by the GOU in 2015. As a result, about 3,000 employees have been trained. To extend MERP's activities to a broader audience, the Project team cooperated with IFC on commercial lending to HOAs and with GIZ on outreach activities related to municipal energy management and energy efficiency project investments. About 100,000 copies of MERP’s brochure, “Energy Efficiency: What to Do and Where to Get Money,” were printed and distributed throughout Ukraine by SAEE. MERP coordinated its communication activities regarding tariff increases with the outreach programs of the EBRD and WB, specifically with programs targeted at energy efficiency investments in municipal utilities. Activity 2. Promote Investment in Clean Energy Technologies and Applications Task 2.2. Assisting Municipalities with Planning, Preparing and Financing Clean Energy Projects The city selection process was coordinated with IFIs and donors organizations/projects (GIZ, EU), and governmental and NGO entities to avoid duplication and ensure synergy of actions. MERP cooperated with the WB on DH energy efficiency in the partner cities. MERP participated in the WB kick-off meeting with MinRegion PIUs, and 10 DH utilities to launch a new WB (USD 338 million) loan facility on energy efficiency in the heating sector and provided assistance to implementation of two WB funded projects. The SECAPs development process was coordinated with the EU Project supporting the CoM initiative in Ukraine and other donors (UNDP, GIZ) to ensure there was no overlap. On a regular basis, MERP conducted coordination meetings with IFIs to assess existing funding opportunities and to ensure their buy-in to the potential projects and willingness to support them through existing financing mechanisms. Task 2.3. Introduction of Energy Management Systems The key counterparts at the municipal level included profile departments of city administrations (economic, educational, and other sectors) and local utility companies. The municipal-level work was coordinated with GIZ, EU, and governmental and nongovernmental entities to avoid duplication and ensure synergy of actions. At the national level, the Project cooperated with SAEE, professional associations, and donors (GIZ, UNIDO). Task 2.5. Support Mechanisms That Mobilize Private Sector Investment MERP coordinated with EBRD and NEFCO projects implementation in supporting and developing prefeasibility studies for thermomodernization of public buildings. The Project closely cooperated with IFC in supporting the “warm loans” program.

92 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Activity 4. Enhance Capacity of the Government of Ukraine in Low Emission Development Strategies While providing assistance to the Task, Enhance Capacity of the Government of Ukraine in Low Emission Development Strategies, MERP collaborated with other donors active in the area, namely with the following: • UNDP project: Capacity Building for Low Carbon Growth Project • UNDP and GEF project: Integrating Rio Conventions Provisions into Ukraine’s National Policy Framework Project • UNDP and GEF project: Removing Barriers to Increase Investment in Energy Efficiency in Public Buildings Projects • World Bank Initiative Partnership for Market Readiness (PMR), in the area of national MRV system legislation establishment • EU-funded regional project, ClimaEast, in the area of assistance to the GOU on national climate change legislation and MRV regulatory framework.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 93 6. Good Practices and Lessons Learned

Activity 1. Improve Clean Energy Regulatory and Legislative Enabling Environment Developing an Enabling Legislative and Policy Environment The following good practices have been identified in the MERP Evaluation Report: “The MERP model of combining the effort of party staff, attracting international experts where needed and, particularly, providing high-quality local consultants has proven to be successful. MERP offered various forms of cooperation, including providing an overview of best international practice, providing technical and/or legal advice upon request, and participating in routine drafting and revisions of law/regulation. [...]. The key success factors were the focus on technical and/or legal advice, working on a daily basis with government and parliamentary staff, and the selection of respected local technical experts and lawyers.” The lessons learned are as follows: 1. Coordination of donors active in the area is essential during the first phase of an initiative. In cases when donor responsibilities and dedicated resource sharing is not coordinated from the outset, overlapping of efforts and resource waste are difficult to avoid. For example, one case of uncoordinated donor efforts resulted in several versions of a draft Commercial Metering Law in 2015. On the other hand, well-coordinated donor efforts and clearly shared responsibilities on ESCO draft legislation in 2015 provided efficient resource allocation. 2. Presence of a “national champion” for legislative initiatives is essential to ensure that legislation is adopted. MERP collaboration with SAEE showed that legislative initiatives can move quickly and smoothly if they are actively promoted by a national champion, even in those cases when an institution is not a subject of legislative initiative by administrative hierarchy. Examples of such legislation include the Heat Supply Law Amendment of 2016 and the Draft Law on Liquid Biofuels. 3. Legislative initiatives get stuck unless they cover areas related to the main assisted topic but that are not covered by the Project’s scope of work. For example, the Law on Energy Efficiency in Buildings originally included a core set of provisions of EE, developed with assistance of MERP in 2015, but later were complemented with provisions on the EEF in 2016-2017. EEF was not within the scope of MERP, but the draft law moved after EEF was incorporated. 4. Executive institutions need technical assistance, methodological support, and capacity building in order to implement adopted laws. When a law arrives with tens of secondary legal acts to be developed and adopted to implement of the law, further technical assistance is needed to continue implementing the law. For example, the Commercial Metering Law and Communal Services Law request significant numbers of acts to be quickly prepared by MinRegion; therefore, continuation of donor assistance is

94 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan important to have the laws implemented in a timely and proper fashion. Further, the full primary and secondary framework must be implemented in practice by entities in municipalities, and implementation requires methodological support and capacity- building support. 5. Lack of national-level monitoring and control over strategic document implementation creates the risk that strategic aims will not be implemented in a timely and efficient manner. Implementation of National Action Plans and other strategic resolutions in Ukraine needs to be ensured through a formal annual monitoring and control system at the national level, including ensured accountability. Assistance to National Energy and Communal Services Regulatory Commission (NEURC) The following good practices have been identified in MERP’s Evaluation Report. “The MERP model of combining the effort of party staff, attracting international experts where needed and, particularly, providing high-quality local consultants has proven to be successful. MERP offered various forms of cooperation [...]. MERP supported the development of regulation by conducting pilot studies (such as pilot calculation of incentive-based tariffs, and pilot household survey on quality of utility services). The key success factors were the focus on technical and/or legal advice, working on a daily basis with government and parliamentary staff, and the selection of respected local technical experts and lawyers.” Lessons learned are as follows: 1. Establishing a focused working group by assisted institution, with participation of Project expert(s) in the working group, imparts the institution with a sense of ownership of the drafted legal item. As a result, the processing and adoption of legal items is smoother and gets less resistance to changes from the institution’s middle management and employees; other interested parties may participate on a formal or informal basis. 2. Coordination of donors, aiming to assist the same institution with the same issues, is essential at the first phase of assistance scope development. If donor responsibilities, thematic scope of assistance, and dedicated resources are not coordinated at the beginning of the effort, duplication and resource waste are difficult to avoid. Also, more than one donor targeting the same issue may result in different recommendations at the technical level, even if principally the recommendations are alike, and the conflicting recommendations can result in delays in decision making of the assisted institution. 3. Capacity building locally needs to be supported with capacity building internationally, for the assisted institution. Capacity building for the assisted institution with local trainers provides a basis on which to discuss recommendations by Project experts and implement the adopted regulations properly. However, for the assisted institution to be able to further improve and adapt the regulatory mechanisms, “regulatory thinking” must be instilled, and a circle of regulatory contacts should be made accessible to many of the institution’s employees.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 95 Public Information and Awareness The major lessons we learned include the importance of engaging knowledgeable, creative partnerships with representatives of all sectors and the benefits of cost sharing. Successes in these key practices are described below. Cost-sharing and Leveraging Wherever possible, MERP cost-shared its outreach activities with private, international, nongovernmental, and state entities to promote its targeted information and media campaigns. For example, JWT Advertising Agency helped the Project create innovative materials such as billboard advertisements and video PSAs concepts on a co-financed basis. MERP established a social partnership with BigMedia company, the largest outdoor advertisement agency in Ukraine. Thanks to our cooperation, BigMedia placed over 4,500 billboards and city lights displays throughout our partner cities on a pro bono basis. As a result, we were able to save more than UAH 16.5 million on placement cost, which BigMedia assumed as part of our collaborative socially oriented effort. Another social partnership was created with UA:PERSHYI National TV Channel to broadcast our TV program, Your Home. During three seasons of the program production (75 episodes), the national TV Channel provided prime air time on a free-of-charge-basis for the program rotation. It saved the Project millions of UAH. In addition to UA:PERSHYI, 35 regional TV channels requested our permission to broadcast the program free of charge, and aired the program for three seasons. Distribution and free rotation of our video PSAs by over 100 regional TV channels, as well as “5 Kanal” (national channel covering the territory of Ukraine, some European countries, and Canada) became possible thanks to our partnership with SAEE. As the state organization, SAEE has a right to place social advertisement videos on national and regional channels for free. Due to such efforts, we were able to reach an audience of about 20 million people. Cooperation with Ukrainian Railway resulted in free placement of MERP video PSAs on the screens of intercity trains with a potential audience of 200,000 passengers per month. Collaboration with manufacturers of energy efficiency equipment and materials, such as Henkel, Rehau, and Danfos filled a specific niche in promoting energy efficiency measures and technologies within nationwide energy reform efforts, supported by MERP. We leveraged the expertise of these companies in producing Your Home. Their experts served as trainers during MERP trainings for journalists. In parallel, these companies equipped almost all MERP HOA/CE RCs with models of energy efficiency materials and equipment. Placing energy efficiency tips and other targeted information on bill inserts was part of our joint outreach efforts with Kyivenergo enterprise, which we supported on a cost-share basis during the 2015-2016 heating season. The MERP team provided useful energy-saving tips and recommendations, and Kyivenergo printed the information on utility bill inserts, sending them to over 200,000 of its customers on a monthly basis. MERP worked with partner city administrations to place and distribute informational materials on a cost-share basis. The distribution list included customer service departments of communal enterprises, regional social protection departments, information exhibits in city administrations,

96 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan local NGOs, schools and universities, HOAs/CE RCs, libraries, and other interested organizations. On a cost-share basis with Lviv City Administration, the MERP team and Lviv HOA/CE RC launched the pilot Community-based Marketing Campaign (CBMC) in Sykhiv, one of the Lviv city districts. The campaign aimed to educate citizens on the benefits of ownership (HOA development) as a primary motivating force for energy savings, and to promote financial solutions related to residential energy efficiency. As a result of this short-term campaign, the number of HOAs created in the district increased by 30 percent, while the number of initiative groups (those willing to create HOAs) increased by 56 percent. Activity 2. Promote Investment in Clean Energy Technologies and Applications The Project Performance Evaluation Report stated, “the municipalities interviewed consistently rated MERP assistance highly. Specifically, MERP systematically worked with municipalities through a series of steps—from initial audits, to developing SEAPs, conducting Prefeasibility Studies, preparing investment pipelines, and introducing municipalities to investors.” In relation to specific activities, the report outlined the following findings. Conducting EAs is prerequisite to quality energy planning: • “MERP’s emphasis on integrated, cross-sectional analysis of communal services sectors provided the tools to analyze and prioritize energy efficiency measures and, finally, to implement improvements addressing cost-recovery for municipal budgets or outside funding.” Energy planning is critical in identifying city infrastructure development projects pipelines: • “MERP’s support in preparing SEAPs routinely elevated the analyses and documents to fully professional status.” • “Many IFIs considered MERP-assisted SEAPs evidence of municipal capacity to carry out sector modernization work and to be considered for loans. A development partner key informant stated that “MERP has played a huge role in helping municipalities develop investment pipelines.” Development of investment catalogues and project proposals allowed the cities to access financing sources: • “MERP has been instrumental in municipalities obtaining outside funding. MERP’s support in developing SEAPs into bankable investment catalogues significantly improved municipalities’ ability to approach IFIs. Key informants from both municipalities and IFIs routinely referred to MERP-developed documentation as important for opening the door to serious loan negotiations.” • “MERP helped introduce municipalities to Western partner institutions. MERP helped stakeholders at various levels (from municipal staffs to renewable energy research institutions) to understand the workings of donor- and private-sector financial institutions, and to some extent, the workings of the private sector energy market.”

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 97 SEAPs implementation support opens doors for funding: • “Carrying out budget-financed energy efficiency projects helped municipalities build track records that improved their credit rating when applying, subsequently, for outside loans. For this reason, some municipalities even prefer to receive credit over grant assistance.” Capacity building and specialized technical expertise (hands-on consulting) are critical to generating sustainable and long-term energy efficiency improvements in municipalities: • “MERP’s package of activities targeting municipalities has been very effective in building up their (municipalities’) capacity, awareness, and motivation to address energy efficiency issues in a concrete manner.” • “MERP guided municipalities along an iterative process, from conducting initial professional audits to performing self-financed energy efficiency projects to successfully applying for outside loans—the steps that sequentially built up local capacity. Key informants considered the individual attention from MERP consultants, and the specialized technical assistance during the process as critical to successful outcomes.” One of the key achievements of MERP is developing local capacity and market for companies operating in the energy efficiency field. These companies include not only local service providers like ESCOs, consulting companies (energy auditors, energy managers, and others), but also materials and equipment manufacturers, construction businesses, and IT developers. The lessons learned are as follows: City management priorities is one of the key factors in attracting funding The SEAPs serve as a tool for attracting investments in EE; however, attracting funds depends heavily on specific city management priorities, understanding the substance of energy efficiency projects, and financing mechanisms. In some cases, city management was reluctant to consider loan funding because they had no experience in dealing with IFIs. A step-by-step approach, moving from smaller to larger projects, is effective in introducing energy efficiency measures In a number of cases, MERP-assisted cities started introduction of energy efficiency measures from small projects financed from the municipal budget and/or with utilization of small preferential loans complimented by grants (NEFCO). This enabled municipalities to develop capacity and implement projects, thus opening doors to large-scale energy efficiency improvements and investments. The demand for MERP support (requests from the cities) grew very fast over the last 2 years of Project implementation, especially from cities for which MERP prepared smaller size projects; these cities requested MERP’s support to prepare comprehensive projects and proposals in a number of other areas. Due to limited resources, MERP was not able to meet the demand for project assistance, particularly in the areas of solid waste management, transportation, and others.

98 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Prior identification of funding sources is the key factor to successful funds mobilization Regular and ongoing coordination with IFIs is key to mobilizing funding for energy efficiency projects, as project proposals may require several iterations to meet the needs and expectations of municipalities and requirements of funding institutions. Close coordination also mitigates duplication of effort if additional support can be provided to municipalities by IFIs directly. Access to funding for small and medium-size localities is a key challenge In addition to minimum loan size, the majority of products offered by IFIs require municipal guarantees (NEFCO, EBRD). Small and medium-size localities have no projects of such size, little or no experience processing the necessary approvals, or limited budgets that do not allow for issuance of such guarantees for municipal infrastructure projects. Commercial lending is still expensive (high interest rates), and thus can only be used for limited numbers of energy efficiency improvements/projects. ACTIVITY 4. Enhance Capacity of the Government of Ukraine in Low Emission Development Strategies The lessons learned are as follows: Broad inclusion of multiple national stakeholders promotes national ownership of the suggested initiative. Development of a LED Strategy until 2050 demonstrated that organized multilevel and multidirectional participation of diverse stakeholders in the process of development makes the document under development understandable, acceptable, and thorough, and garners the broader support of stakeholders. Broad support eases the administrative processes of adoption at later stage. Engaging a “national champion” for a legislative initiative is essential to the adoption of the legislation. MERP’s collaboration with MinEcology showed that adoption of legislation is quicker and more efficient if a national champion is engaged to promote and oversee the process. During the period of MERP assistance, using a national champion, LEDS policy and strategic documents have been developed, agreed on, and adopted. Coordination of donors conducted frequently and on a broad scale enabled efforts to stay focused and resources to be allocated properly.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 99 Annexes

100 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Annex 1. MERP Accomplishments under Task 1.1. Developing an Enabling Legislative and Policy Environment

Table 1-1 Accomplishments for Task 1.1

Reform municipal energy sectors toward greater EE

National Energy Efficiency Action Plan until 2020 approved by Cabinet of Ministers resolution #1228-p on November 25, 2015. The strategic document, the National Energy Efficiency Action Plan (NEEAP), described the development scenario of the Ukrainian energy sector based on the TIMES-Ukraine model, provided recommended measures on improving energy efficiency, and set goals for energy consumption reduction resulting from these measures. Under the NEEAP, Ukraine expected to achieve a 9 percent reduction in energy consumption by 2020. http://old.kmu.gov.ua/kmu/control/uk/cardnpd?docid=248668419 Amendments to the State target economic program of energy efficiency and development of energy carriers’ production from renewable energy sources and alternative fuels for 2010-2015 approved by Cabinet of Ministers of resolution #929 on November 11, 2015. An additional high-level strategic document on EE. The document established aims, tasks, measures, means of financial support, and forms of control to achieve a number of results, including inter alia decreasing energy consumption by 9 percent by 2020. http://old.kmu.gov.ua/kmu/control/uk/cardnpd?docid=248633685 Law of Ukraine on introducing amendments to the Budget Code of Ukraine (regarding the introduction of new investment opportunities, guaranteeing the rights and legitimate interests of business entities for large- scale energy modernization) (#328-VIII), adopted by VR on April 9, 2015. The law introduced the new term, “Long- term Liabilities on Energy Services” in the Budget Code, which entitled the administrators of state budget funds, which are the holders of public buildings, to conclude long-term contracts (for periods over 1 year) with ESCOs, and the law guaranteed payment to ESCOs of remuneration for savings achieved under the energy performance contract. http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=52878 Law of Ukraine on introducing new investment opportunities, guaranteeing the rights and legitimate interests of business entities for large-scale energy modernization (#327-VIII) adopted by VR on April 9, 2015. The law set up relations between the client and the provider of energy services and identified the mechanism for setting the cost of services under an energy performance contract. The law established guarantees for investors who deal with energy modernization, with respect to remuneration for savings achieved under an energy performance contract. It identified a transparent mechanism for selection of winners of energy services tenders, and approved an exclusively monetary form of payment for energy services http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=52775 Sample Energy Service Performance Contract, approved by Cabinet of Ministers Resolution #845 on October 21, 2015. Sample energy performance contract (EPC) supported implementation of the ESCO mechanism for municipal buildings. http://old.kmu.gov.ua/kmu/control/uk/cardnpd?docid=248592909 Law of Ukraine on Amendments to the Law of Ukraine "On Introduction of new investment opportunities, guaranteeing the rights and interests of businesses for major energy modernization” (regarding procurement mechanism of energy service contracts) (#1980-VIII) adopted by VR on March 23, 2017. The law allowed unlocking the ESCO mechanism implementation in the public buildings sector and made it less complex for foreign investors to enter the market. Namely, the law emendated the situation created by the Law of Ukraine on Public Procurement, which requested all public procurement be conducted through the Prozorro electronic system and be based on lowest price criteria, despite the peculiarity of energy services procurement being based on net present value (NPV) criteria. ESCO market suspension was removed. http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=58925

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 101 Table 1-1 Accomplishments for Task 1.1

Law of Ukraine on Energy Efficiency in Buildings (#2118-VIII) was adopted by VR on June 22, 2017. This is a major law for the introduction of energy efficiency in buildings and creation of conditions for the operation of the EEF in the future, thus implementing relevant provisions of EU Directive 2010/31/EC. The law defines the legal, socioeconomic, and organizational principles for activities in the field of energy efficiency of buildings and aims to reduce energy consumption in buildings. The law establishes minimum requirements for the energy efficiency of buildings, provides mechanisms for raising funds for the implementation of energy-efficient measures, and guarantees the financing of measures to improve the energy efficiency of buildings (EEF). http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=60730 Law of Ukraine on Commercial Metering of Heat Energy and Water Supply (#2119-VIII) was adopted by VR on June 22, 2017. The law implemented the provisions of Energy Efficiency directive 2012/27/EC at the national level regarding the metering of the heat, hot water, and cold water supplied to consumers by centralized systems, and was a crucial first step to effectively implement the energy efficiency measures associated with DH and water utilities. The law determined the grounds for providing commercial metering for heat energy services, hot water supply, and centralized water supply, and providing appropriate metering information for consumers of such services. The law also envisioned mandatory equipping of buildings with commercial accounting means and engineering systems to ensure that such accounting is conducted in accordance with the design documentation, construction norms, and regulations. http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=59553 Draft Methodology on Allocation of Consumed Services in the Building to Individual Consumers, developed by the Project and provided to MinRegion for adoption, aims to implement provisions of the Law on Commercial Metering of Heat Energy and Water Supply (#2119-VIII). At the time of this report, the draft order was not yet adopted. Draft Order for Taking on Record Customer Meters, developed by the Project and provided to MinRegion for adoption, is aimed to implement provisions of the Law on Commercial Metering of Heat Energy and Water Supply (#2119-VIII). At the time of this report, the draft order was not yet adopted Energy Strategy of Ukraine until 2035: Security, Energy Efficiency, and Competitiveness approved by Cabinet of Ministers resolution #605-p on August 18, 2017. The Strategy envisions inter alia almost 50 percent reduction in energy consumption by the Ukrainian economy by 2030. At the time of this report, the draft action plan to implement National Energy Strategy is under the adoption process. http://old.kmu.gov.ua/kmu/control/en/cardnpd?docid=250250456 Reform municipal energy sectors to enable consumers

On changes in the Procedure governing the use of the national budget funds earmarked for energy efficiency improvements through cheaper loans, approved by Cabinet of Ministers Resolution #314 on September 06, 2014. This “warm loans program” resolution included energy efficiency investment projects in the list of projects subject to financing through national budget allocations, thus opening up opportunities for residents to improve their properties with partial reimbursement of costs. http://old.kmu.gov.ua/kmu/control/uk/cardnpd?docid=247510068 Law of Ukraine on Amendments to the Tax Code of Ukraine regarding the taxation of certain nonprofit organizations (#263-VIII) adopted by VR on March 18, 2015. The project restored the status of non-profit organizations to the association of co-owners of a multiapartment buildings, associations of owners of residential buildings and housing cooperatives. http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=53759 Law of Ukraine on the Specifics of the Right of Ownership in Multifamily Residential Buildings (#417-VIII) adopted by VR on May 14, 2015. The law defined the specifics of ownership in an apartment building, and regulated the legal, organizational, and economic relations connected to the rights and duties of homeowners for building maintenance and management. The law established the rights and obligations of condominiums, their responsibility, forms of governance in multiapartment buildings, and decision making regarding residential building management by homeowners. Finally, the law defines the powers of a condominium head to manage an apartment building. http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=53058

102 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Table 1-1 Accomplishments for Task 1.1

Law of Ukraine on Amendments to the Tax Code of Ukraine (regarding the taxation of non-profit organizations) (#652-VIII) adopted by VR on July 17, 2015. The law restored the list of organizations that would not be considered as taxpayers, abolished discriminatory tax conditions for non-profit organizations, and reduced the tax burden on charitable aid. With this law, status of an HOA as a non-profit organization was restored. http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=53883 Law of Ukraine on Amendments to the Tax Code of Ukraine and certain legislative acts of Ukraine regarding the balancing of budget revenues in 2016 (#909-VIII) by VR on December 24, 2015. The law eliminated inconsistencies regarding the allocation of property during the liquidation of an HOA by stating in paragraph 4 of item 133.4.1 of the Tax Code of Ukraine that the given paragraph does not apply to HOAs and HOA associations. With the changes introduced by the law, an HOA is ensured (without being afraid of losing or not receiving the status of a non-profit organization), that if it were liquidated, the property of the HOA would be distributed among the co-owners. http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=57512 Law of Ukraine on peculiarities of access to information in field of supply of electricity, natural gas, heat, central hot water, central potable water and sanitation (#887-VIII) was adopted by VR on December 10, 2015. The law increased transparency and improved tariff information disclosure in the area of municipal energy services. The law ensured the right of consumers to access information on energy and utilities markets, guaranteed by the Constitution of Ukraine and the laws of Ukraine, through creation of the given clear and unified mechanism provided in the draft law. The law increased transparency over establishment and application of utilities tariffs in the context of increasing tariffs for electricity, heat energy, natural gas, and services for centralized water supply and sewage disposal. The law also contributed to ESCO market development through greater transparency. http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=56266 Law of Ukraine on Changes to Article 13 of the Law of Ukraine on the Specifics of the Right of Ownership in a Multifamily Residential Building (#1413-VIII) was adopted by VR on June 14, 2016. The law ensured continuation of house management service until a house manager is selected; awarded the right to co-owners to terminate agreement with a house manager at 2-months’ advance notice; and ensured continuation of house management under current cooperative model until a house manager is selected or HOA is established. http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=59132 Procedure for storing the minutes of meetings of co-owners of multifamily dwellings and placement of information on decisions taken by such meetings, approved by Cabinet of Ministers Resolution #109 on February 24, 2016. The resolution implements Law #417-VIII. This procedure applies to the executive committees of village, town, and city councils, condominiums, and managers of multiapartment buildings. The executive committees were obliged to save, keep, and make public the protocols for the determination of the manager and the election of an authorized representative of co-owners. The resolution provided that the storage of protocols was mandatory throughout the life cycle of an apartment building. http://old.kmu.gov.ua/kmu/control/uk/cardnpd?docid=248862199 Procedure for writing institutionally owned multifamily buildings off the balance, approved by Cabinet of Ministers by Resolution #301 on April 20, 2016. The resolution implements Law #417-VIII. This regulation defined the procedures for writing off multiapartment buildings and/or property (to allow transfer to private co-owners) from the balances of the ministries, central executive bodies, state enterprises, and local governments. http://old.kmu.gov.ua/kmu/control/uk/cardnpd?docid=248983278 Procedure on the Register of non-profit organizations, entering and removing non-profit organizations from the Register, approved by Cabinet of Ministers Resolution #440 on July 13, 2016. The resolution implements Law #417- VIII. This regulation establishes the procedure that should be followed by condominiums. http://zakon0.rada.gov.ua/laws/show/440-2016- percentD0 percentBF Provision of subsidies to the populace to reimburse the costs incurred with payments for the housing management service in a multifamily building (housing management costs), approved by Cabinet of Ministers Resolution #1022 on December 28, 2016. The resolution implements Law #417-VIII. The regulation provides the mechanism of establishment of the subsidy for the service of housing management. http://zakon3.rada.gov.ua/laws/show/1022-2016- percentD0 percentBF Approval of the template of the minutes of the co-owners meeting, approved by Resolution #203 of MinRegion of Ukraine on August 25, 2015. The resolution implements Law #417-VIII. http://zakon3.rada.gov.ua/laws/show/z1083-15

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 103 Table 1-1 Accomplishments for Task 1.1

Revision of the current Model Homeowners’ Association Charter, approved by Resolution #238 of MinRegion of Ukraine on September 23, 2015. The Resolution implements Law #417-VIII. http://zakon5.rada.gov.ua/laws/show/z1220-15 Procedure on the contest to appoint a housing manager in a multifamily residential building, approved by Resolution #150 of MinRegion of Ukraine on June 24, 2016. The resolution implements Law #417- VIII.http://zakon3.rada.gov.ua/laws/show/z0893-16 On approval of a model contract on the provision of housing maintenance services, draft resolution by Cabinet of Ministers. The resolution was intended to implement Law #417-VIII, but was put on hold due to a change of political agenda. Model contract for provision of DH service to an HOA as a collective consumer, draft resolution by Cabinet of Ministers. The resolution was intended to implement Law #417-VIII, but was put on hold due to a change of political agenda. Reform municipal energy sectors to increase economic sustainability

Draft Law of Ukraine on amendments to some laws of Ukraine regarding the shift to alternative fuels and the transition by entities operating in the heating sector to incentive-based regulation (#4937) was registered at VR on July 8, 2016. The draft law provides combined heat and power (CHP) generation of heat and alternative sources to be included in the incentive-based regulatory framework. In addition, the draft law states that incentive-based regulation should apply to heat energy production and is mandatory for entities operating in the heating sector staring from 2020. http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=59617 Law of Ukraine on measures for debt settlement of heating and heat-generating organizations and enterprises, which provide centralized water supply and sanitation for consumed energy (#1730-VIII) was adopted by VR on November 3, 2016. The high cross-indebtedness among municipal and national energy entities, state budget, and municipal budget raised the risk that the sector could be shut down, and the sector requested legislative action. The purpose of the draft law was to improve the financial situation of heat entities and water supply and sewage entities, prevent their bankruptcy, and increase the level of investment attractiveness through the introduction of mechanisms for settling their payables for consumed energy carriers. The law aimed to create a registry of debts and settle the indebtedness registered within a 60-month period. The solution over the high cross-indebtedness would allow avoiding blockage of accounts of heating entities by energy carriers’ suppliers due to unpaid indebtedness for previous years. http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=60275 On Amendments to Item 23 of the procedure for the distribution of funds transferred to the current accounts with special use regime used for payments to natural gas supplier entrusted with special responsibilities, approved by Cabinet of Ministers Resolution #492 on July 12, 2017. The resolution secured the share of cash for investment programs. The resolution allowed for the transfer of funds to the account of a heat supply/heat-generating entity to be increased by the value of funds dedicated to financing of investment programs; and the transfer of funds to the account of the natural gas supplier to be reduced by the same amount. This change allowed heating entities to unlock financing of investment programs, including those funded by IFIs. https://www.kmu.gov.ua/ua/npas/250136716 On Amendment and abolishing some resolutions of the Cabinet of Ministers of Ukraine, approved by Cabinet of Ministers Resolution #951 on November 8, 2017. The aim of the resolution was to monetize state subsidies at the level of utilities (partial monetization) as of January 1, 2018. In particular, the resolution provides for payment of subsidies, based on actual consumption of services, directly to the service provider's account for a special regime opened at the Treasury. The funds, received by utility on its special account in the Treasury, shall be used solely to pay providers of energy resources, including providers of thermal energy. The amendment eliminates unequal treatment of energy source providers and includes strategic direction to full monetization of subsidies and privileges by the State. http://zakon0.rada.gov.ua/laws/show/951-2017- percentD0 percentBF/paran68#n68

104 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Table 1-1 Accomplishments for Task 1.1

Concept of State Policy in the area of Heat Supply was adopted by Cabinet of Ministers Resolution #569-p on August 18, 2017. The concept aimed to reduce the consumption of natural gas and other energy resources for the production of heat energy, boost financial recovery and attract new investment to the sector, and introduce a transparent, efficient system of payments between the participants of the heat energy market. The concept included a number of aims, including technological upgrade of heat supply systems, including reduction of thermal energy losses in production down to 8 percent and in transport down to 10 percent; increase in the share of alternative energy sources in production of thermal energy up to 40 percent in 2035; further development of heat supply systems based on the optimal combination of different types of heat supply (centralized, autonomous, individual) within each single settlement; introduction of incentive-based tariffs; simplification of procedures for implementation of investment projects; transition to cash payments for reimbursement of benefits and subsidies provided to population by enterprises; and reduction of consumption of thermal energy down to 60-20 kilowatt hours (kWh) per square meter (m2) annually. https://www.kmu.gov.ua/ua/npas/250218439 Law of Ukraine on housing and communal services (#2189-VIII) was adopted by VR on November 9t, 2017. The framework law provided an exhaustive list of the rights and responsibilities of managers, communal service providers, and consumers. The entire setting of provisions is expected to act as the mechanism enabling to protect their rights. The variety of services covered by the law include management of a multi apartment houses, heat supply, hot water supply, centralized water supply, centralized sewage and waste management, supply of electricity and supply natural gas to consumers in residential, manor, garden, country houses. http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=57371 Model agreement on provision of communal services for the supply of thermal energy to the owner (tenant, another user) of the building, draft resolution by Cabinet of Ministers. The resolution is intended to implement Law #2189-VIII. Model agreement on provision of communal services for the supply of thermal energy to the owner (tenant, another user) of a separate facility in a building, other than an apartment building, draft resolution by Cabinet of Ministers. The resolution is intended to implement Law #2189-VIII. Individual contract on provision of communal services for the supply of thermal energy in a multiapartment building (with the condition for servicing and providing ongoing repair of the indoor networks of the multiapartment building), draft resolution by Cabinet of Ministers. The resolution is intended to implement Law #2189-VIII. Individual contract on provision of communal services for the supply of thermal energy in a multiapartment building (without the condition for servicing and providing ongoing repair provision of the indoor networks of the multiapartment building), draft resolution by Cabinet of Ministers. The resolution is intended to implement Law #2189-VIII. Model collective agreement on provision of communal services for the supply of thermal energy in a multiapartment building, draft resolution by Cabinet of Ministers. The resolution is intended to implement Law #2189-VIII. Model agreement on provision of communal services for the supply of thermal energy to the collective consumer in a multiapartment building, draft resolution by Cabinet of Ministers. The resolution is intended to implement Law #2189-VIII. Model agreement on providing utility services for the supply of thermal energy to the collective consumers in an apartment building, draft resolution by Cabinet of Ministers. The resolution is intended to implement Law #2189- VIII. Resolution of the Cabinet of Ministers of Ukraine on adoption of the developed regulations, draft resolution by Cabinet of Ministers. The resolution is intended to implement Law #2189-VIII. Reform municipal energy sectors toward increasing share of renewable resources in the structure

Action Plan to Implement Directive of the European Parliament and of the Council 2009/28/EC, approved by Cabinet of Ministers Resolution #791-p on September 3, 2014. The resolution provided actions to be taken to transpose the directive into national law; it also provided estimates of projected growth of the sector. http://zakon2.rada.gov.ua/laws/show/791-2014- percentD1 percent80

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 105 Table 1-1 Accomplishments for Task 1.1

National Action Plan on Renewable Energy until 2020, approved by Cabinet of Ministers Resolution # 902-p on October 1, 2014. The resolution approved a number of documents, including Plan of Measures Implementing the National Action Plan on Renewable Energy until 2020; Projected Total Energy Consumption by 2020 at the Baseline Energy Efficiency Scenario; National Indicative Targets of Renewable Sources in Total Energy Consumption by 2020; Projecting Dynamics of Growth of Share of Renewable Sources in Total Energy Consumption until 2020; and others. http://zakon2.rada.gov.ua/laws/show/902-2014- percentD1 percent80 Law of Ukraine on amendments to some laws of Ukraine to ensure competitive conditions of electricity generation from alternative energy sources (#514-VIII) was adopted by VR on June 4, 2015. The law achieved proximity to the world average level of “green” tariffs for electricity generated using alternative sources of energy, abolished requirements for local content, contrary to the requirements of international treaties ratified by Ukraine, balanced previously excessive stimulation of the production of electricity from solar energy and lack of stimulation of bioenergy and geothermal energy, and others. http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=55219 Law of Ukraine on amendments to the Law of Ukraine on Heat Supply on Stimulating the Production of Thermal Energy from Alternative Energy Sources (#1959-VIII) was adopted by VR on March 21, 2017. The adopted amendments set the terms of the economic environment for the newly established independent "green" generators in municipalities, including the price level incentive at the level of 90 percent heat price over natural gas. The adopted law would enable municipalities, at the initial phase, to unlock the thermal energy sector for entry of more participants and increase the share of renewable energy in the district sector. http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=58568 Methodology of estimation of weighted average tariffs, when natural gas is used for thermal energy production, transport and supply, for population, institutions, and organizations financed from state or municipal budgets, approved by Cabinet of Ministers Resolution #679 on September 6, 2017. The Resolution implements Law #1959-VIII. The resolution set the rules on calculating the average tariff for “heat over gas,” thus increased accessibility of “green” investors to existing DH networks at reduced administrative burden. http://old.kmu.gov.ua/kmu/control/uk/cardnpd?docid=250251787 Energy Strategy of Ukraine until 2035: Security, Energy Efficiency, and Competitiveness approved by Cabinet of Ministers resolution #605-p on August 18, 2017. The Strategy envisions inter alia significant increase in national energy production through renewable energy sources; up to 25 percent of energy shall be generated using renewable energy by 2035. The Strategy provides introduction of market-based principles in heating and biomass markets, and support to CHPs. At the time of this report, the draft action plan to implement the National Energy Strategy is in the adoption process. http://old.kmu.gov.ua/kmu/control/en/cardnpd?docid=250250456 On Amendments to the procedure for distribution of funds accrued to current accounts with a special use regime for settlements with the natural gas supplier, entrusted with special duties, approved by Cabinet of Ministers Resolution #144 on February 28, 2018. The resolution provided that payments for thermal energy produced from biofuels will be subject to “secured expenses.” This amendment would end direct discrimination against bioheat and biofuels versus gas-heat and gas itself. Previously, there was a barrier to market entry for entities using alternative fuels, thus preventing the fuel conversion process in the heating sector. http://zakon3.rada.gov.ua/laws/show/144-2018- percentD0 percentBF Draft Law of Ukraine on Amendments to certain legislative acts of Ukraine on the development of the field of production of liquid fuels from biomass and the implementation of sustainability criteria for liquid fuels from biomass and biogas intended for use in the transport sector (reg. #7348), registered by VR on November 29, 2017. The draft aims to create a legal framework for production, circulation, and use of liquid biofuels in transport. The draft law provides measures to create a market for liquid biofuels in Ukraine and to monitor this market, introduces liability for breaching obligations of the share of bio-components in motor fuel/motor fuel alternatives, and other measures. The draft law aims to transpose certain provisions of the Directive 2009/28/EU. http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=62987

106 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Table 1-1 Accomplishments for Task 1.1

Draft Law of Ukraine on amendments to some laws of Ukraine concerning the introduction of competition in district heating systems, developed (Third-Party Access package). This includes Draft Law of Ukraine on amendment of the Law on Heat Supply, developed; provides the framework for TPA under the economic model, which includes inter alia, annual auctions for thermal energy, organized by single-buyer operator, with submission of two separate price bids for the heating and nonheating seasons, setting size of mandatory reserve capacities of operator to be paid by third parties; and setting the upper limit for heat energy price at the auction for independent heat energy producers on the level of 90 percent of the tariff set for the operator in this competitive system, which is defined as the one having at least 50 gigacalories per hour (Gcal/h) connected consumer heat load in heating season. Draft Law of Ukraine on amendment of the Law on privatization of state property provides an exclusion for the privatization restriction for the thermal energy- generating sources. Draft Law of Ukraine on amendment of the Law on state regulation of communal services provides that tariff setting in competitive district heating systems are regulated by developed Heat Supply law. Draft Law of Ukraine on amendment of the law on communal services provides alignment of provisions with the developed Heat Supply law. At the time of this report, the draft law is under consideration by SAEE. Draft Law of Ukraine on amending certain legislative acts of Ukraine on the development of trade in biological fuels developed (Biomass Market package). This includes the Draft Law of Ukraine on amendments to the law on alternative types of biofuels, provides legal grounds on which to establish an electronic platform for trading biomass in Ukraine. The electronic platform is intended to accommodate increasing capacities by both suppliers and consumers, and to provide transparent and market-oriented ways of trading solid biomass. The platform provides a nondiscriminatory and competitive way to incentivize both supply and demand sides of the emerging market; moreover, the electronic platform would be designed to ensure that energy generators (monopoly entities) use market-based prices for the resource rather than prices concluded in direct nonregulated contracts. Draft Law of Ukraine on amendments to the law on public purchases provides for using the electronic platform for trading biomass as a means of conducting public purchases. Draft Law of Ukraine on amendments to the Law on code of forestry of Ukraine provides obligations for the residuals of the forestry business to be transported closer to forest roads. Draft Law of Ukraine on amendments to the Law on code of administrative offenses of Ukraine, provides for administrative fines for noncompliance with the obligatory use of the electronic platform for trading biomass. Draft Law of Ukraine on amendments to the Law on licensing economic activities, provides the licensing norm for the electronic platform operator. Draft Amendment to the Cabinet of Ministers resolution on planning the forestry industry developed, and provides that the State forestry agency include residuals in its annual plans of activity. At the time of this report, the draft law is under consideration by SAEE. Reforming/improvement of governance of municipal energy sectors

Regulation of SAEE of Ukraine, approved by Cabinet of Ministers Resolution # 676 on November 26, 2014. The regulation amendments included termination of competence to issue economic sanctions on administrative offenses, cancellation of territorial bodies, and placement of SAEE under the Ministry of Fuels and Energy of Ukraine in terms of administrative hierarchy. http://zakon1.rada.gov.ua/laws/show/676-2014- percentD0 percentBF Law of Ukraine on the National Commission for State Regulation in field of Energy and Communal Services (#1540- VIII) was adopted by VR on September 22, 2016. The law included provisions on transparency, competition-based appointment of the Regulator’s members, independence of the Regulator in the process of making informed and fair decisions, and on openness of the state regulation process. The law ensured fulfillment of Ukraine’s commitments under the Protocol Concerning the Accession of Ukraine to the Treaty Establishing Energy Community, and was expected to make state regulation more sustainable and predictable. The law inter alia defined regulatory principles of price-making models and requested to develop long-term investment programs as key components to the sectors’ modernization, explicitly on MERP draft suggestions. http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=58234

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 107 Annex 2. MERP Accomplishments under Task 1.2. Assistance to National Energy and Communal Services Regulatory Commission

Table 2-1. Accomplishments for Task 1.2

Assistance to NEURC to improve current (“cost-plus”) regulation of tariffs for municipal energy licensees

On approval of the procedure for the calculation of tariffs for centralized water supply and wastewater, approved by NEURC Resolution #302 on March 10, 2016. The procedure introduces the possibility of applying projected input prices, the mechanism of compensation, and the obligation to annually revise of tariffs. The application of these mechanisms enables improvements in the financial state of the industry. http://www.nerc.gov.ua/index.php?id=20016 On approval of the procedure for the calculation of tariffs for centralized cold water supply and wastewater (with use of the engineering networks of the building), approved by NEURC Resolution #303 on March 10, 2016. The procedure introduces the possibility of applying projected input prices, the mechanism of compensation and the obligation to annually revise of tariffs. The application of these mechanisms enables improvements in the financial state of the industry. http://www.nerc.gov.ua/index.php?id=19857 On approval of the procedure for setting tariffs for centralized water supply and wastewater, approved by NEURC Resolution #364 on March 24, 2016. Administrative resolution provides requirements for forms for submission information, terms, conditions for changing tariffs, etc. The adoption of this resolution allowed for transparency in formulating procedures for setting tariffs. http://www.nerc.gov.ua/index.php?id=20101 On approval of the procedure for setting tariffs for heat energy, its production, transportation, and supply, DH, and hot water supply services, approved by NEURC Resolution #377 on March 24, 2016. The Procedure allows tariff expenses to include loss coverage, determines conditions for adjusting tariffs, and lists requirements for the formation of two-tier tariffs. The application of these mechanisms promotes improvements in the financial state of the industry. http://www.nerc.gov.ua/index.php?id=20667 Procedure for setting tariffs for heat energy, its production, transportation, and supply, approved by NEURC Resolution #528 on March 31, 2016. Administrative resolution provides requirements for forms for submission information, terms, conditions for changing tariffs, etc. The adoption of this resolution allowed for transparency in formulating procedures for setting tariffs. http://www.nerc.gov.ua/index.php?id=20939 Procedure for setting tariffs for district heating and centralized hot (tap) water supply services, approved by NEURC Resolution #529 on March 31, 2016. Administrative resolution provides requirements for forms for submission information, terms, conditions for changing tariffs, etc. The adoption of this resolution allowed for transparency in formulating procedures for setting tariffs. http://www.nerc.gov.ua/index.php?id=20940 Procedure for including heat energy losses in heating networks into tariffs for heat energy, its production, transportation and supply, approved by NEURC Resolution #1214 on July 1, 2016. The document is designed to encourage licensees to reduce excessive losses of heat energy in networks. Licensee is allowed to include losses in the rates slightly lower than actual ones, only if the investment program is executed. http://www.nerc.gov.ua/index.php?id=21096 Assistance to NEURC to improve investment in infrastructure regulation

On including the costs associated with IFI loans and part of income allocated to pay loan principal into tariffs for heat energy, its production, transportation and supply, and district water supply and sewage, draft Resolution by Cabinet of Ministers, 2016. This document was developed to enable coverage through tariffs of loans that have been taken by licensees from IFIs without prior consent of NEURC (“old loans”). On approval of the procedure and conditions under which NEURC approves IFI loans to be secured by utility companies for the implementation of investment projects, draft Resolution by NEURC, 2016. This document was developed to establish rules on gaining the consent of NEURC and including into tariff forthcoming loans from IFIs that are to be taken under local guarantees and sovereign guarantees (“new loans”).

108 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Table 2-1. Accomplishments for Task 1.2

On approval of the order for concurring with NEURC the loans from IFIs secured for investment projects by entities dealing with generation of heat energy (except heat energy generated at heat and power plants, thermoelectric power stations, nuclear plants, and cogeneration plants that use nonconventional or renewable energy sources), transportation of heat energy by main and local (distribution) networks, and supply of heat energy, draft Resolution by NEURC, 2017. MERP provided essential comments on incorporation of draft provisions from 2016 to establish a proper regulatory environment for projects financed by IFIs. At the time of this report, partial public consultation by NEURC was performed (website publication). Methodological Recommendations for Licensees on Development of Long-term Investment Programs in Water Supply and Sewage Sector under Incentive-based Tariff Regulation, draft Resolution by NEURC, 2017. The manual provides a regulatory framework to assess, gain consent of NEURC, and monitor and keep accountable investments in a long-term program developed by licensee in the water and wastewater sector. In its letter of February 2018, NEURC stated the manual is to be “practically applied by NEURC while providing methodological assistance to the licensees developing investment programs.” Assistance to NEURC in development of incentive-based (RAB) tariff regulatory framework

Concept for the Introduction of Incentive-Based (RAB) Regulation in the Heating, District Water Supply, and Sewage Sectors, report, July 2016. The concept outlined the problem, identified potential options to design a new tariff model, and selected and justified the recommended option. The Concept provided a gradual transition path to a new regulatory model. The document action plans agreed on with NEURC, which outlined the regulatory documents to be developed for realization of the concept in municipal energy sectors in Ukraine. Recommendations on considering special aspects of the performance of utility companies in tariff model, report, June 2017. The report analyzed and developed recommendations on considering special aspects of utilities’ performance, such as technical losses in networks, current risks, fees, and penalties in the tariff model under development. The report includes relevant international practices on the issues discussed. On approval of the Tariff Formation Procedure for incentive-based tariffs for heat energy transportation by main and local (distribution) heating networks, approved by NEURC Resolution #964 on July 27, 2017. The Procedure sets the methodology for incentive-based (RAB) tariff calculation. http://www.nerc.gov.ua/index.php?id=26672 On approval of the Procedure for determining the regulatory base of assets of subjects of natural monopolies carrying out (or intending to carry out) economic activities on heat energy transportation by main and local (distribution) heating networks, approved by NEURC Resolution #966 on July 27, 2017. The procedure determines the establishment of RAB, categories of asset that are not considered RAB, determination of RAB value, treatment of new investments, etc. http://www.nerc.gov.ua/index.php?id=26671 On setting the regulatory rate of return of subjects carrying out (intending to carry out) heat energy transportation by main and local (distribution) heating networks (without stating the size of the rate of return), approved by NEURC Resolution #965 on July 27, 2017. The resolution sets unified value of regulatory return for all licensees moving to incentive-based (RAB) regulation. http://www.nerc.gov.ua/index.php?id=26670 On approval of the Procedure for the setting of incentive-based tariffs (heat energy transportation), approved by NEURC Resolution #967 on July 27, 2017. The document sets administrative procedure of tariff establishment. http://www.nerc.gov.ua/index.php?id=26672 On approval of the Tariff Formation Procedure for incentive-based tariffs for centralized water supply and sewage, approved by NEURC Resolution #1132 on September 14, 2017. The Procedure sets the methodology for incentive- based (RAB) tariff calculation. http://www.nerc.gov.ua/index.php?id=28246 On approval of the Procedure for determining the regulatory base of assets of subjects of natural monopolies carrying out (intending to carry out) economic activities on centralized water supply and sewage, approved by NEURC Resolution #1135 on September 14, 2017. The procedure determines the establishment of RAB, categories of asset that are not considered as RAB, determination of RAB value, treatment of new investments, etc. http://www.nerc.gov.ua/index.php?id=27937

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 109 Table 2-1. Accomplishments for Task 1.2

On setting the regulatory rate of return of subjects carrying out (intending to carry out) centralized water supply and sewage (without stating the size of the rate of return), approved by NEURC Resolution #1134 on September 14, 2017. The resolution sets the unified value of regulatory return for all licensees moving to incentive-based (RAB) regulation. http://www.nerc.gov.ua/index.php?id=27628 On approval of the Procedure for the setting of incentive-based tariffs (on water supply/sewage), approved by NEURC Resolution #1133 on September 14, 2017. The document sets the administrative procedure of tariff establishment. http://www.nerc.gov.ua/index.php?id=27936 Pilot calculations of incentive-based (RAB) tariffs for thermal energy transportation, working paper, December 2017. The pilot calculation revealed that changes in the overall tariff for DH are not projected as significant. Pilot calculations of incentive-based (RAB) tariffs for water supply and wastewater treatment, working paper, January 2018. The pilot calculation revealed that changes in the tariff are projected as significant. Assistance to NEURC toward supporting development of asset revaluation regulatory approach, related to introduction of incentive-based (RAB) tariff regulatory framework Terms of Reference (TOR) for selecting an asset valuation company, draft, 2016. The draft TOR, developed by MERP and provided to NEURC, comprised the technical work to enable the revaluation to be conducted; the work was to be financed by WB. The approach to multiparty participation in the revaluation task was based on licensees having difficulties financing such work by themselves, as found in the survey conducted by MERP in 2015. Development of Changes to Asset Valuation Methodology for the Purpose of Incentive-Based Regulation, report, 2017. The report suggested an approach to develop asset classifiers in the centralized water and wastewater and DH sectors; terms of useful life of assets; optimization ratios; and aggregated recovery value indicators (ARVI). The report contained a draft amendment to resolution #293 by the State Property Fund, providing draft amendments to the first three issues (ARVI–subject to be established after pilot revaluation completed). Analytical note on alternative approach to establish RAB value to switch to incentive regulation, working paper, 2017. Under separate request of NEURC, the alternative approach was developed in case methodology amendments by the State Property Fund were not processed. The working paper suggested using cumulative indices, consumer price index, and the currency rate change to establish potential ranges of RAB to be expected by the coming evaluation. The alternative ranges were later to be used for pilot tariff estimates. Assistance to NEURC in development of benchmarking system

Recommendations on the choice of methods (combination of methods) and parameters to be used for conducting benchmarking, report 2014. Methods for Clustering and Comparative Assessment of Utilities Performance: Benchmarking Report on Water and Wastewater Sector, 2014. Recommendations on Key Performance Indicators for Water and Wastewater Companies in Ukraine, report, 2014. Analysis of international experience in implementation of incentive-based regulation in EU countries in water & wastewater and DH sectors, report, 2015. Overview of benchmarking systems in EU countries in water & wastewater and DH sectors, report 2015. Review on methods of economic analysis and utility efficiency calculation in water & wastewater sector in EU countries, report, 2015. Overview of use of benchmarking results in regulatory process EU countries in water & wastewater and DH sectors, report, 2015. Recommendations on the use of the benchmarking results in the centralized water and sanitation sector, report, 2015. Recommendations on the use of benchmarking results in regulatory activities, report, 2016. On Results of Comparative Analysis (Benchmarking) in Clusters of District Water Supply and Sewage Utilities, report, 2016. Recommendations on calculation and use of key performance indicators in the centralized water supply and wastewater sector (KPI cards), report, 2016.

110 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Table 2-1. Accomplishments for Task 1.2

Recommendations on publishing of benchmarking results in the district water supply and sewage sector, report, 2016. Recommendations on Establishment of Key Performance Indicators in Heating Sector and on the Initial Data for Assessing the Value of Indicators, report, 2017. Report on the Comparative Analysis (benchmarking) in Thermal Energy Production, Transportation and Supply, report, 2017. Primary data array systematized under developed benchmarking system for DH sector entities, 2017. Primary data array systematized under developed benchmarking system for water and wastewater sector entities, 2016. Assistance to NEURC in development of quality monitoring and improvement system

Recommendations on organization of the multilevel system of monitoring and evaluation of utility services quality, report, 2014. Review of international experience on inclusion in tariff setting of quality of services indicators and other special issues in water & wastewater and DH sectors, report, 2015. Methodology for monitoring the quality of DH, centralized cold and hot water supply, and sanitation services, report, 2016. List of Service Quality Indicators for Centralized Water Supply and Sewage Sector, 2017. List of Service Quality Indicators for District Heating Sector, 2017. Tools for Automated Monitoring of Quality of Centralized Water Supply and Sewage Services, 2017. The deliverable includes a report, an explanatory note for NEURC (Instructions), instructions for entities (user’s manual), methodology of monitoring, and software tool. Tools for Automated Monitoring of Quality of District Heating Services, 2017. The deliverable includes a report, an explanatory note for NEURC (Instructions), instructions for entities (user’s manual), methodology of monitoring, and software tool. Report on Pilot Survey on Quality of Certain Types of Utility Services and Consumer Willingness to Pay for Better Quality Services, report, 2017. The survey results and analytics revealed the current levels of customer satisfaction with utility services, priorities in service improvements according to customer expectations, and the need for better communication with the public on tariff setting. Survey tools (sample, questionnaire) were transferred to NEURC, and can be used in future waves of monitoring the quality of service. Assistance to NEURC toward establishing a regulatory accounting separation mechanism Concept for the development of the Procedure/Rules for regulatory accounting by licensed type of activity by entities operating in the heating and centralized water supply and sanitation sectors, report, July 2016. The concept provided recommendations for the regulatory accounting separation model to be introduced for vertically integrated municipal energy entities. Rules (Procedures) of Separated Accounting by Licensed Type of Activity in District Heating, approved by NEURC Resolution #1223 on October 10, 2017. The rules provided for separation of incomes, costs, and assets into the following groups of business units: (1) production of thermal energy (four business units, including purchased thermal energy); (2) transport of thermal energy (three business units); (3) supply of thermal energy (single business unit); (4) other licensed activities except the ones above; (5) nonlicensed activities (two business units, communal services priced by NEURC); and (6) nonlicensed activities (three business units, including balancing, issue of technical conditions, and connection to network). Business units are subject to further separation. The rules include a reporting request for each separate account. http://www.nerc.gov.ua/index.php?id=28703 Rules (Procedures) of Separated Accounting by Licensed Type of Activity in Centralized Water Supply and Sewage Sector, approved by NEURC Resolution #1474 on December 27, 2017. The rules provided for separation of incomes, costs, and assets into the following groups of business units: (1) licensed, drinking water supply (production, transportation, supply); (2) licensed, sewage (collection, transportation, purification); (3) other licensed activities except the ones above; (4) nonlicensed activities in communal areas; and (5) nonlicensed activities, other. Business units are subject to further separation. The rules include a reporting request for each separate account. http://www.nerc.gov.ua/index.php?id=30464

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 111 Table 2-1. Accomplishments for Task 1.2

Rules (Procedures) of Separated Accounting by Licensed Type of Activity in District Heating under Incentive- based Regulation, draft NEURC Resolution, 2018. The draft rules provide accounting separation with reflected accounting specificities for the companies that will transition to incentive-based regulation for the service of thermal energy transportation. Rules (Procedures) of Separated Accounting by Licensed Type of Activity in Centralized Water Supply and Sewage Sector under Incentive-based Regulation, draft NEURC Resolution, 2018. The draft rules provide accounting separation with reflected accounting specificities for the companies that will transition to incentive-based regulation. Assistance to NEURC to establish an improved regulatory reporting system

Terms of Reference of the Regulatory Information Management System (RIMS), final draft 2014. The TOR for RIMS established common functional and other requirements for complex software and hardware that would be used by the Regulatory Institution, its regional offices, and licensed communal services utilities. Technical specifications for software and hardware to accommodate functionality of RIMS, draft 2014. The technical specification draft was based on technical analysis of the current IT systems in use and future needs by the Regulatory Institution’s headquarters and regional offices. On approval of the reporting form #13 “Report on indicators for reliability of water supply and quality of potable water” and the reporting form #14 “Report on indicators for commercial quality of centralized water supply and (or) sewage services,” approved by NEURC Resolution #226 on February 23, 2017. The rules were supplemented with guidelines for licensees for completing the forms. http://www.nerc.gov.ua/index.php?id=24000 On approval of the rules on reports submitted to NEURC by subjects operating in DH and centralized water supply and sewage sectors, approved by NEURC Resolution #717 on May 31, 2017. The resolution established the new reporting forms for NEURC licensees in DH and centralized water supply and sewage sectors. The rules were supplemented with guidelines for licensees for completing the forms. http://www.nerc.gov.ua/index.php?id=25565 On approval of Reporting Rules for reports submitted to NEURC by subjects of economic activities that apply incentive-based tariffs for HE transportation by main and local (distribution) networks, draft NEURC Resolution, 2018. The draft resolution establishes reporting forms for licensees in DH that apply incentive-based regulation. The draft resolution includes instructions for licensees for completing the forms. On approval of Reporting Rules for reports submitted to NEURC by subjects of economic activities that apply incentive-based tariffs for centralized water supply and sewage, draft NEURC Resolution, 2018. The draft resolution establishes reporting forms for licensees in centralized water supply and sewage sector that apply incentive-based regulation. The draft resolution includes instructions for licensees for completing the forms. Assistance to NEURC to improve regulatory transparency

Methodological Recommendations on Improving Transparency of Regulatory Decisions on Tariff Setting, report, January 2017. The report provided an analysis of the regulatory process of tariff setting, recommendations on procedural steps to be amended to ensure more transparency by NEURC, and examples of international practices provided for reference. Taking due regard to the Law on NEURC coming into effect, the report incorporated the relevant provisions. The report was positively received and praised by NEURC, and the Project was informed on the recommendations being implemented. Increased Transparency of Regulatory Decisions and Creation of a Transparent Tariff-setting System in the Water Supply and Sanitation Sector and Heating Sector Training seminar conducted on October 13, 2015. Assistance to NEURC to build regulatory capacity

Assessment of the Quality of Utility Services: Methods, Tools, and Practices, workshop. July 2014 Creation of Unified Methodological Approaches to Accounting for Licensees in Water Supply, Heating, June 2014 and Sewage Sectors, roundtable. Discussion of unified methodological approaches to accounting by licensed and unlicensed type of October activity, with consideration of sector-specific features of licensees in the heating sector, workshop. 2014

112 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Table 2-1. Accomplishments for Task 1.2

Ten tailored coaching sessions developed specifically for the new Commissioners. The sessions November focused on key regulatory principles, independence of regulation, concepts and strategies common to 2014 – utility regulation, and outstanding issues related to separate accounting for licensed activities January (unbundled accounting), regulatory methodologies and benchmarking, key principles of tariff 2015 regulation, utility service affordability, assessment of affordability and effective demand for services in Ukraine, and investment component in tariffs. Specific features relative to the taxation of licensees operating in the heating sector and the impact of May 2015 these features on tariff setting. Problematic aspects of accounting and taxation of investment programs, depreciation, and expenses for repairs of the long-term asset of licensees in the field of heat supply, training seminar. Investment programs of licensees operating in the heating sector. Incentives for heating companies to June 2015 increase energy efficiency of heat energy production, transportation, and supply. Methods of stimulating entities to increase energy efficiency of production, transportation, and supply of thermal energy, including reduction of technical losses, training seminar. Constituent meeting program with pilot companies on testing of updated forms of regulatory reporting, June 2015 training seminar. Incentive-based regulation in heat energy transportation and centralized water and wastewater June 2015 treatment. The concept and advantages of the method, the regulatory framework, and preconditions for implementation, training seminar. Assessment of Quality of Services in the areas of Water Supply, Wastewater Treatment, and Heating June 2015 Supply (necessity, methodology, technical support, practical application), training seminar. Social and psychological aspects of customer relations, training seminar. July 2015 Production of heat energy from unconventional and alternative fuels. Technical, economic, financial, September and regulatory aspects, including incentive-based tariffs for heat energy, training seminar. 2015 Organization and keeping separate accounting by types of licensed activities from accounting of other September activities, for heat supply entities, training seminar. 2015 Increased Transparency of Regulatory Decisions and Creation of Transparent Tariff Setting System in October Water Supply, Heating and Sewage, training seminar. 2015 Assessment and forecasting affordability of electricity supply, gas supply, DH, and centralized water November and sanitation services under changing tariffs for services, training seminar. 2015 Concept of Tariff Setting System in District Heating, Water Supply and Sewage Sectors on Incentive December Regulation Principles – International Experience and Current Issues for Ukraine, training seminar. 2015 Benchmarking in District Water Supply and Sewage Sectors. Benchmarking System Development December and Key Aspects of Its Results Application, training seminar. 2015 Alternative fuels: action algorithm, technical aspects pertinent to heat energy production from February alternative fuels. Analysis and replication of best practices of licensees producing heat energy from 2016 nonconventional or renewable sources of energy, training seminar. The operation of individual heating stations and provision of DH and centralized hot water supply February services: technical, organizational, and economic issues, training seminar. 2016 ERRA Training Course: Renewable Energy Regulation. The Project sponsored two NEURC February employees to participate in the course. 2016 Legal, accounting and regulatory subjects pertinent to rent, concession, municipal asset management March 2016 and their impact on tariff setting and economic activities by licensees, training seminar. Customer relations and image making for service providers, training seminar. March 2016 Tools for service quality monitoring at the level of licensees, roundtable. April 2016 Customer Relations: Effective Communication Techniques, training seminar under request of Ivano- May 2016 Frankivsk. Investment programs: sources of financing, specificities regarding accounting and taxation, June 2016 improvement of relevant laws and regulations, training seminar.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 113 Table 2-1. Accomplishments for Task 1.2

Tariff setting rules and procedures in the centralized water supply and sanitation sector. New July 2016 legislation and outstanding issues, training seminar. Tariff formation rules and tariff-setting procedures in the heating sector for licensees of NECSRC. New legislation and outstanding issues, training seminar Quality of water supply and wastewater services: methodology and use of results, training seminar. September 2016 Practical aspects regarding benchmarking in the centralized water supply and sewage sector, and November publishing benchmarking results, training seminar. 2016 Procedure (rules) on accounting by licensed type of activity in the heating sector, training seminar. December 2016 Procedure (rules) for separated accounting by type of licensed activity in centralized water supply and February sewage, training seminar. 2017 Drafts of tariff formation rules and tariff-setting procedure for incentive-based tariffs for heat energy July 2017 transportation: application specifics, conditions for transition to incentive-based tariffs, identification of essential components, results of test calculations, training seminar. Drafts of a tariff-formation order and a tariff-setting procedure for incentive-based tariffs in the July 2017 centralized water supply and sewage sector, training seminar. Reports submitted to NEURC by licensees operating in the centralized water supply and sewage September sector and respective rules about the reports, training seminar. 2017 Reports submitted to NEURC by licensees operating in the DH sector and respective rules about the October reports, training seminar 2017 Service quality monitoring in the DH sector: methodology, tools, utilization of results, training seminar. November 2017 Benchmarking in the heating sector, training seminar. December 2017

114 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Annex 3. MERP Accomplishments under Task 1.3. Supporting Improvement of Social Safety Net for Vulnerable Populations

Table 3-1. Accomplishments under Task 1.3

Assistance to the GOU to improve social assistance accuracy

On Strengthening Social Assistance for Population under Increasing Prices and Tariffs for Communal Services, approved by Cabinet of Ministers Resolution #83 on April 5, 2014. This decree introduces new social service assistance related to mitigation of increased prices and tariffs by providing targeted compensation to low- income households for their extra expenditures related to increased payment for communal services. http://zakon0.rada.gov.ua/laws/show/83-2014- percentD0 percentBF On the Simplification of the Social Subsidies Procedure, approved by Cabinet of Ministers Resolution #106 on February 28, 2015. http://zakon0.rada.gov.ua/laws/show/106-2015- percentD0 percentBF On the Simplification of the Social Subsidies Procedure, approved by Cabinet of Ministers Resolution #475 on June 26, 2015. http://zakon0.rada.gov.ua/laws/show/475-2015- percentD0 percentBF On approval of the procedure for granting privileges to certain categories of citizens based on the average monthly aggregate income of a family, approved by Cabinet of Ministers Resolution #389 on June 4, 2015. http://zakon0.rada.gov.ua/laws/show/389-2015- percentD0 percentBF On changes in the Procedure for granting privileges to certain categories of citizens based on the average monthly aggregate income of a family, approved by Cabinet of Ministers Resolution #446 on June 26, 2015. http://zakon0.rada.gov.ua/laws/show/446-2015- percentD0 percentBF On changes to the subsidy allocation procedure before the start of the heating season, approved by Cabinet of Ministers Resolution #752 on September 23, 2015. The decree introduced changes to expand opportunities for families not previously eligible, such as those with combined personal accounts or combined meters; this way, the decree removed official reasons to reject subsidies to these families. http://zakon0.rada.gov.ua/laws/show/752-2015- percentD0 percentBF On changes of certain GOU decrees to the provision on the order of appointment and providing subsidies to the population to reimburse costs for payment for housing and communal services, purchase of liquefied gas, solid and liquid stove fuel, approved by Cabinet of Ministers Resolution #319 on April 27, 2016. The decree removed a number of inaccuracies and took into consideration some ambiguous situations when determining subsidy eligibility and awarding subsidies; simplified the conditions of subsidy award and subsidy awarding procedure for the next period; changed the conditions of estimation of household income and expenses, thus contributing to better targeting of the subsidy program; and expanded the powers of social inspectors in the course of their inspection of living conditions of households in terms of identifying any breaches of provisions of the legislation on awarding of subsidies. http://zakon0.rada.gov.ua/laws/show/319-2016- percentD0 percentBF On Amendments to Some Resolutions of the Cabinet of Ministers of Ukraine, approved by Cabinet of Ministers Resolution #300 on April 26, 2017. The decree introduced changes to subsidy policies and procedures, including changed period for calculating the average revenue for potential subsidy recipients, obligation to return to budget unused subsidy amounts by the end of the period, part of unused subsidies provided for the payment for natural gas and electricity for individual heating to be transferred to the subsidy recipient’s bank account (partial monetization). http://zakon0.rada.gov.ua/laws/show/300-2017- percentD0 percentBF

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 115 Table 3-1. Accomplishments under Task 1.3

Assistance to the GOU to establish rational volumes of social assistance for consumers of housing and communal services

On Certain Social Norms in the Area of Housing and Communal Services, approved by Cabinet of Ministers Resolution #409 on August 6, 2014. The resolution introduced (i) social housing norms that would be used for payment for housing maintenance, district and individual heating (heat supply), (ii) social norms on consumption of housing and communal services for which the government would grant privileges and subsidies; (iii) corrective coefficients that would be used to calculate consumption of electric energy, natural gas, and other fuels for heating purposes, depending on the region, separately for individual houses and multifamily residential buildings; (iv) a new mechanism according to which subsidies would be calculated depending on a household’s income per person; (v) subsidies would no longer be recalculated based on actual consumption of services; subsidies would be awarded based on a social norm and for a fixed period; (vi) targeting accuracy of the housing subsidies program was improved, and procedures governing provision and administration of the housing subsidies program simplified. The resolution was the result of joint efforts of the MHR Project, WB, and MERP for several years. http://zakon0.rada.gov.ua/laws/show/409-2014- percentD0 percentBF On amendments to GOU Decree #409 dated August 6, 2014, approved by Cabinet of Ministers Resolution #842 on October 28, 2015. The decree introduced changes to the substance of certain social norms and to the norm- setting procedure regarding specific social norms, including: some services added as subject to social norms, including centralized DH service, coefficients established for adjustment of social norms to three groups of consumers. http://zakon0.rada.gov.ua/laws/show/842-2015- percentD0 percentBF On the norms of natural gas consumption by the population in the absence of gas meters, approved by Cabinet of Ministers Resolution #203 on March 23, 2016. The decree established gas consumption social norms, which were not previously included in the list of subsidized communal services, i.e., natural gas norm per person with gas-fired water heaters and with centralized hot (tap) water supply service provided, and without gas-fired water heaters and when centralized hot (tap) water supply service is not provided. The decree established social norms for households with gas meters as well. http://zakon0.rada.gov.ua/laws/show/203-2016- percentD0 percentBF On amendments to GOU Decree #409 “On Certain Social Norms in the Area of Housing and Communal Services” dated August 6, 2014, approved by Cabinet of Ministers Resolution #317 on April 27, 2016. The decree added the service of apartment building management to list of subsidized services, reduced the social norms for use of gas supply services for domestic needs, and included changed adjustment coefficients. The reduction of natural gas consumption norms and change in the adjusting coefficients was intended to promote more economical use of energy resources. http://zakon0.rada.gov.ua/laws/show/317-2016- percentD0 percentBF On approval of the procedure for determining the cost ceiling of the payment for a housing management service in a multifamily residential building which may be reimbursed by the government and the cost ceiling of a housing management service in a multifamily residential building based on which subsidies are provided to the populace, approved by Cabinet of Ministers Resolution #1022 on December 28, 2016. The resolution unlocks the allocation of funding to cover housing and management services for multiapartment residential buildings. Based on the approved procedure, subsidies for payment for a housing management service in a multifamily residential building are provided based on the cost of such service in a specific building, and should not exceed the ceiling cost of such service. For residents of multifamily buildings, dormitories, and buildings owned by housing building cooperatives in HOAs, subsidies for payment for a housing management service are granted based on housing management fees/dues and should not exceed the cost ceiling which may be reimbursed by the government. http://zakon0.rada.gov.ua/laws/show/1022-2016- percentD0 percentBF On amendments to GOU Decree #409 dated August 6, 2014, approved by Cabinet of Ministers Resolution #51 on February 26, 2017. The decree revised some social norms for the consumption of housing and communal services subject to the actual consumption of energy carriers by households, driving the norms down. http://zakon0.rada.gov.ua/laws/show/51-2017- percentD0 percentBF Assistance to the GOU to develop a long-term program of social assistance incentivizing residents to switch to energy efficiency measures and systems

116 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Table 3-1. Accomplishments under Task 1.3

Analysis of changes in the legislation of Ukraine governing social assistance during 2011-2013, report, 2014. Analysis and Assessment of the Impact of Reforming the System of Social Protection of Communal Services Consumers in 2014-2016, report, 2016.

Concept for Stimulating Energy Saving by Subsidy Recipients, concept paper, 2016

Analysis of Social Norms for Consumption of Housing and Communal Services; Recommendations on the Improvement of the Norms, report, 2017. The report provided a deep analytical review of existing social norms for subsidized services, assessed the drawbacks of the existing system of social norms, and developed a long-term program for balancing social norms and gradually reducing them to incentivize residents to implement energy efficiency measures at their properties.

Assistance to MinSocPolicy to build capacity

On implementation of the Cabinet of Ministers Decree #83 “On strengthening social assistance for population under increasing prices and tariffs for utility services” dated April 5, 2014, workshop dedicated to features and practice of implementation of the new social assistance June 2014 mechanism, targeted to heads and specialists of regional department for social assistance at MinSocPolicy. On social norms, based on which privileges and subsidies for payment of housing and utility September services will be granted, and on changes to the procedure governing provision of housing 2014 subsidies, workshop dedicated to Resolution #83 and Resolution #409 New Mechanisms and Opportunities for Providing Subsidies to Pay for Housing and Communal Services, Regional training seminars; over 3000 employees trained to implement the new social subsidies mechanism. The new subsidy program for the social protection departments of regional offices of the

Ministry. Dedicated to Resolution #389, Resolution #446.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 117 Annex 4. MERP Partner cities and localities

Population, # City/Locality "000" persons

1 Balta 19 2 Bakhmut 76 3 Bilhorod-Dnistrovskyi 57 4 Bolhrad 15 5 Chernihiv 295 6 Chornomorsk 73 7 Dnipro 990 8 Dobropillya 30 9 Ivano-Frankivsk 229 10 Izmail 75 11 Kamyanets - Podilsky 102 12 Kharkiv 1448 13 Kherson 296 14 Khmelnytskyi 268 15 Kramatorsk 161 16 Kremenchuk 223 17 Kropyvnytskyi 237 18 Kryvyi Rih 648 19 Kyiv 2,888 20 Lutsk 217 21 Lviv 729 22 Mariupol 465 23 Myrnohrad 50 24 Odesa 1,010 25 Pavlohrad 109 26 Pokrovsk 76 27 Reni 19 28 Rivne 250 29 Rubizhne 59 30 Severodonetsk 117 31 Sloviansk 115 32 Sumy 269

118 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Population, # City/Locality "000" persons

33 Ternopil 218 34 Teplodar 11 35 Vinnytsia 372 36 Yuzhne 32 37 Zaporizhzhia 762 Total 13,010

percent of population of Ukraine (excluding Crimea) 31 percent

percent of urban population of Ukraine (excluding Crimea) 44 percent

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 119 Annex 5. List of contacts for MERP partner cities

# Name City Institution/Position Contact

(04866) 2-23-79; Chief Specialist, Department of Housing and Communal [email protected]; 1. Oleksiy Mazur Balta Services, and Municipal Improvements, Balta City Council [email protected]; [email protected]; (0627) 44-07-95 Head, Department of Energy Management and Ecology under [email protected]; 2. Tetiana Tatarynova Bakhmut Directorate of Economic Development, Bakhmut City Council [email protected]; [email protected];

Chief Specialist, Energy Manager at Department of Transport, (04849) 2-24-44; 3. Olha Tserkovna Bilhorod-Dnistrovskyi Traffic Management, Communications Systems, and Energy [email protected]; Saving, Bilhorod-Dnistrovskyi City Council [email protected];

(04846) 4-21-14 4. Vitaliy Kuruch Bolhrad Chief Investment Specialist, Bolhrad City Council [email protected]; [email protected]; (0432) 59-52-66 Director, Department for Energy Efficiency, Vinnytsia City 5. Viktoriia Dembitska Vinnytsia [email protected]; Council [email protected]; (056) 791-11-85; (056) 791 11 95; Director, Department for Energy Efficient Technology, Dnipro [email protected]; 6. Dmytro Semennikov Dnipro City Council [email protected]; [email protected]; (06277) 2-78-81; First Deputy Mayor of Dobropillya for Activities of City 7. Oleksiy Kormiltsev Dobropillya [email protected]; Council’s Executive Bodies [email protected]; (061) 224-19-72; [email protected]; Head of Sub-Department for Energy Management, 8. Viktor Bondarenko Zaporizhzhia [email protected]; Department for Economic Development [email protected]; [email protected];

120 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan # Name City Institution/Position Contact

(0342)556525; Director, Directorate for Attracting Investments, Department of [email protected]; 9. Olena Ivaniv Ivano-Frankivsk Housing and Utilities Policies and Municipal Improvements, Ivano-Frankivsk City Council [email protected]; [email protected]; (048) 417-78-50; Energy Manager, Izmail Bureau for Investment Facilitation 10. Viacheslav Kroitoru Izmail [email protected]; Municipal Institution, Izmail City Council ispolkom@izmail.odessa.gov.ua; (03849) 5-16-50 11. Yurii Liahutko Kamyanets’-Podilsky Advisor to Mayor of Kamyanets’-Podilsky [email protected]; [email protected]; (044) 279-29-21; [email protected]; Deputy Department Director, Head of Directorate for Energy [email protected]; 12. Olena Malezhyk Kyiv Saving, Fuel and Energy Complex, and Potable Water, Kyiv City State Administration [email protected]; Maryna Stotska - 044-235-92-39, [email protected]; Director of Department for Economic Development, Trade, (0522) 24-48-50 Kropyvnytskyi 13. Andrii Palyvoda and Investment; Head of Economic Directorate, Kirovohrad [email protected]; (Kirovohrad) City Council [email protected]; (06264) 2-19-97 Head, Energy Section, Department of Transport, 14. Olha Saikova Kramatorsk [email protected]; Communications, and Energy, Kramatorsk City Council [email protected]; (0536) 74-38-64 [email protected]; Head, Department for Energy Management and Energy 15. Tetiana Andriievska Kremenchuk [email protected]; Industry [email protected]; [email protected] Head, Department for Energy Management and (0564)74-32-63; 92-13-16; 16. Vitaliia Sicheva Kryvyi Rih Implementation of Energy Saving Technology, Executive [email protected]; Committee, Kryvyi Rih City Council [email protected]; (0332) 777934 Deputy Director, Department for Economic Policies, Head of 17. Kostiantyn Patrakeiev Lutsk [email protected]; Energy Saving Sub-Department, Lutsk City Council [email protected];

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 121 # Name City Institution/Position Contact

(032)2975857 [email protected]; 18. Iryna Kulynych Lviv Director of Department for Economic Development Vaskovets Roman - (032)2975857; 2546057; [email protected]; (0629) 52 62 60 [email protected] .ua; Director of Department for Ecology, Energy Management, [email protected]; 19. Vaagn Mnatsakanian Mariupol Occupational Safety, and Civil Defense [email protected]; Serhii Kazaku – (0629) 33-63-60; [email protected]; [email protected]; (06239) 6-11-22, (06239) 6-10-20, Head of Department for Innovative Policies and Investment (06239) 61122 20. Alla Matiushkina Myrnohrad Activity [email protected]; [email protected]; (048)737-7924 Deputy Director, Agency for Odesa Municipal Development 21. Vitalii Savych Odesa [email protected]; Programs Municipal Enterprise, Odesa City Council [email protected]; (05632) 6-28-04; Director, Directorate of Municipal Utilities and Construction, [email protected]; 22. Andrii Zavhorodnii Pavlohrad Pavlohrad City Council [email protected]; [email protected]; 0623 52-19-90; [email protected]; Chief Specialist, Department for Coordination of Municipal 23. Yevhen Speranskyi Pokrovsk [email protected]; Enterprises [email protected]; [email protected]; (04840) 4-02-19 Chief Specialist for Economy and Investment, Reni City 24. Khrystyna Radu Reni [email protected]; Council [email protected];

122 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan # Name City Institution/Position Contact

(0362)225946; Head, Department of Industry and Entrepreneurship, [email protected]; 25. Ihor Pavliuk Rivne Directorate of Municipal Economy [email protected]; [email protected]; (06453) 6-47-03; Head, Department of Economic Analysis and Investment 26. Nataliia Kovalenko Rubizhne [email protected]; Policies [email protected]; (06452) 4-30-05 [email protected]; Director, Department for Economic Development, 27. Nataliia Koliesnik Severodonetsk [email protected]; Severodonetsk City Council [email protected]; [email protected]; (06262) 3-45-52; 3-35-22; [email protected]; 28. Oleksandr Korchma Sloviansk Energy Manager, Sloviansk City Council [email protected]; [email protected]; (0542) 700-395 [email protected]; 29. Maryna Dranichenko Sumy Head of Ecology Section [email protected]; [email protected]; Head of Section for Energy Supply, Directorate of Housing (0352) 525833 30. Pavlo Savechko Ternopil and Communal Services, Municipal Improvements, and [email protected]; Ecology [email protected]; (057) 760 74 46 Deputy Head of Sub-Department for Support of International [email protected]; 31. Kostiantyn Demenkov Kharkiv Projects, Department for International Cooperation, Kharkiv City Council Olha Demyanenko - (057) 7607442 [email protected]; (0552) 456-444 32. Larysa Leonova Kherson Director of Kherson City Energy Service Company [email protected]; [email protected]; (0382)651259; Head of Department of Energy Saving and Investment 33. Nataliya Plekanets Khmelnytskyi [email protected]; Policies [email protected];

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 123 # Name City Institution/Position Contact

(0462)77-48-56 Head of Sub-Department of Energy Saving, Directorate for 34. Roman Movchan Chernihiv [email protected]; Economic Development, Chernihiv City Council [email protected]; (04868) 6-00-34; 35. Nataliya Hencheva Chornomorsk Head of Economic Department, Chornomorsk City Council [email protected]; Deputy Mayor for Activities of Executive Bodies of City (048)4221290 36. Dmytro Liubivyi Yuzhne Council, Director of Directorate for Housing and Communal [email protected]; Services, Yuzhne City Council [email protected];

124 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Annex 6. Subcontractors, grantees and consultants involved in implementation of MERP activities

# Type Name Address Contact Area of Expertise/Activities

MERP Activity 1. Improve Clean Energy Regulatory and Legislative Enabling Environment

MERP Task 1.1. Developing an Enabling Legislative and Policy Environment

Municipal Ruslan Tormosov Development Institute, 14a Ihorivska Grantee 063-057-70-10; 1 All-Ukrainian street, 2nd floor, Developing an Enabling Legislative and Policy Environment (Ukraine) 099-63-36-700; Charitable m. Kyiv, Ukraine [email protected] Organization (MDI) 18/7 General Irina Zapatrina, Subcontractor LLC Law firm Almazova street +38 067 441 87 49 2 Developing an Enabling Legislative and Policy Environment (Ukraine) JurEnergoConsulting of. 306, Kyiv [email protected] 01133, Ukraine [email protected] 34a Grantee Grushevskogo Tatiana Boyko 3 Civic Network OPORA street, office 93, (044) 286-26-70 Developing an Enabling Legislative and Policy Environment (Ukraine) Kyiv 01021, [email protected]; Ukraine Expert 4 Vesa Lappalainen Developing an Enabling Legislative and Policy Environment (international) Expert (country 5 Georgiy Geletukha Developing an Enabling Legislative and Policy Environment national) Expert (country 6 Yana Bugrimova Developing an Enabling Legislative and Policy Environment national)

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 125 # Type Name Address Contact Area of Expertise/Activities

Oleksiy Kot, Managing Partner; Oleksandr Burtovy, 12 Khreshchatyk Deputy Chairman of the Subcontractor street, 2nd floor, 7 Antika Law Firm Energy Committee Developing an Enabling Legislative and Policy Environment Kyiv, 01001 (Ukraine) +38 044 390 09 20/21 Ukraine [email protected] http://antikalaw.com.ua/en/ Expert (country 8 Anna Pastukh Developing an Enabling Legislative and Policy Environment national) Expert (country 9 Oleksandra Tryboi Developing an Enabling Legislative and Policy Environment national) Expert (country 10 Olha Haidai Developing an Enabling Legislative and Policy Environment national) Expert (country 11 Semen Drahniev Developing an Enabling Legislative and Policy Environment national) Expert (country 12 Yvgen Oliynyk Developing an Enabling Legislative and Policy Environment national) Expert (country 13 Vladimir Kramar Developing an Enabling Legislative and Policy Environment national) Expert (country 14 Viacheslav Antonenko Developing an Enabling Legislative and Policy Environment national) Expert (country 15 Oleksii Epik Developing an Enabling Legislative and Policy Environment national)

MERP Task 1.2. Assistance to National Energy and Communal Services Regulatory Commission (NEURC)

Municipal Ruslan Tormosov Development Institute, 14a Ihorivska Grantee 063-057-70-10; Assistance to National Energy and Communal Services 16 All-Ukrainian street, 2nd floor, 099-63-36-700; Regulatory Commission (NEURC) (Ukraine) Charitable m. Kyiv, Ukraine [email protected] Organization

126 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan # Type Name Address Contact Area of Expertise/Activities

18/7 General Irina Zapatrina, Subcontractor LLC Law firm Almazova street +38 067 441 87 49 Assistance to National Energy and Communal Services 17 (Ukraine) JurEnergoConsulting of. 306, Kyiv [email protected] Regulatory Commission (NEURC) 01133, Ukraine [email protected] 34a Grushevskogo Tatiana Boyko Grantee Assistance to National Energy and Communal Services 18 Civil Network OPORA street, office 93, (044) 286-26-70 (Ukraine) Regulatory Commission (NEURC) Kyiv 01021, [email protected]; Ukraine Expert Assistance to National Energy and Communal Services 19 Vesa Lappalainen (international) Regulatory Commission (NEURC) Expert Assistance to National Energy and Communal Services 20 Diana Korsakaite (international) Regulatory Commission (NEURC) Expert Assistance to National Energy and Communal Services 21 Mart Otts (international) Regulatory Commission (NEURC) Expert Assistance to National Energy and Communal Services 22 Sarunas Prieskienis (international) Regulatory Commission (NEURC)

MERP Task 1.3. Supporting Improvement of Social Safety Net for Vulnerable Population

Municipal Ruslan Tormosov Development Institute, 14a Ihorivska Grantee 063-057-70-10; Supporting Improvement of Social Safety Net for Vulnerable 23 All-Ukrainian street, 2nd floor, 099-63-36-700; Population (Ukraine) Charitable m. Kyiv, Ukraine [email protected] Organization

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 127 # Type Name Address Contact Area of Expertise/Activities

MERP Task 1.4. Supporting Energy Efficiency Standards

Dmytro Pedan, Official representative in Ukraine [email protected]; Trondheimsveien Nataliya Grytsenko, Subcontractor Energy Savings 436A ENSI – Energy Saving  Energy Management and EAs 24 (Norway) International (ENSI) 0962 Oslo, International AS  Energy efficiency standards Norway +47 22 90 24 69 +47 97 65 89 74 [email protected]; [email protected] - www.ensi.no Hennadiy Farenyuk, Director 5/2 State Research (044) 249-72-34 Subcontractor Preobrazhenska 25 Institute of Building (044) 248-89-09 Energy efficiency standards (Ukraine) str., Kyiv, 03037, Constructions (SRIBC) Ukraine [email protected]; [email protected]; Expert (country 26 Anatoly Chernyavskyi  Energy Management and EAs national) Expert (country 27 Oleksandr Nikolaienko  Energy Management and EAs national)

MERP Task 1.5. Public Information and Awareness

 Development of outreach materials (printed and electronic) Municipal  Outdoor posters development, production, and placement Ruslan Tormosov Development Institute, 14a Ihorivska  Video PSAs development, production, and promotion Grantee 063-057-70-10; 28 All-Ukrainian street, 2nd floor,  Your Home TV Program development, production, 099-63-36-700; (Ukraine) Charitable m. Kyiv, Ukraine promotion [email protected] Organization  Trainings for journalists and media events  Public outreach and capacity-building events

128 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan # Type Name Address Contact Area of Expertise/Activities

34a  Development of outreach materials (printed and electronic) Grushevskogo Tatiana Boyko Grantee  Video PSAs promotion 29 Civic Network OPORA street, office 93, (044) 286-26-70  Your Home TV Program promotion (Ukraine) Kyiv 01021, [email protected]; Ukraine  Public outreach and capacity-building events 2B Mykilsko- Center for Ukrainian Iryna Movchan Subcontractor Slobidska street, 30 Reform of Education (044) 490-69-88  Trainings for journalists and media events (Ukraine) office 285, Kyiv, (CURE) [email protected]; Ukraine 130, Volodymyr Hutsul Subcontractor Lobanovskoho  Your Home TV Program development, production, 31 “Ekvis” Studio +38 (044) 599-41-45 (Ukraine) street, office 293, promotion [email protected] Kyiv , Ukraine Subcontractor JWT Advertising Anna Smirnova  Outdoor posters development concept and design 32 n/a (Ukraine) Agency (050)-446-46-68  Video PSAs development concept and design 29-31, Anna Andriutsa Subcontractor Glybochytska  Outdoor posters development, production, and placement 33 Kyiv Postproduction (044) 568-50-23 (Ukraine) street, 3d floor,  Video PSAs development, production, and promotion [email protected] Kyiv, Ukraine 7J, Mykoly Valentyn Shostak Subcontractor Bazhana avenue, (044) 564351  Outdoor posters development, production, and placement 34 Euromedia Company (Ukraine) office 62, Kyiv, operation@euromediacomp  Video PSAs development, production, and promotion Ukraine any.com 14a Ihorivska Maksym Lots Subcontractor 35 BigMedia Company street, 5th floor (044) 585 15-15  Outdoor posters free placement (Ukraine) Kyiv, Ukraine [email protected]  Printing of outreach materials (printed and electronic) 7A, Lesia Viktor Horbachov  Outdoor posters printing Subcontractor PI Horbachov (Printing Kurbasa street, 36 (044)466 1442.  Video PSAs development, production, and promotion (Ukraine) House) office 121 Kyiv, [email protected] Ukraine  Printing for trainings for journalists and media events  Printing for public outreach and capacity-building events

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 129 # Type Name Address Contact Area of Expertise/Activities

MERP Activity 2. Promote Investment in Clean Energy Technologies and Applications

Vitaly Lesyuk PE Western Ukrainian  Energy Planning Subcontractor 28, Haiovskoi (032) 245-75-78; 37 Regional Training  EAs (Ukraine) Str., Lviv, 79052 (032) 294-9424 Center  Feasibility Studies and projects support [email protected];

Hryhorii Romaniuk  Energy Planning Subcontractor 4, Osvity Str., 38 ESCO Ukraine (044) 498-00-89  EAs (Ukraine) Kyiv, 03307 [email protected];  Feasibility Studies and projects support Pavlo Pertko LLC Office 1-1, 3C, Subcontractor (044) 337-86-97  EAs 39 "Energomanagement Zahidnyi Lane,  Feasibility Studies and projects support (Ukraine) PRO" Kyiv, 03061 energomanagementpro@g mail.com;

4, Shyrshova Kateryna Shyshka Subcontractor PE "ESCO Str., Office 314,  EAs 40 (0562) 34-18-22 (Ukraine) "EnergoEngineering" Dnipropetrovsk,  Feasibility Studies and projects support 49000, Ukraine [email protected];

Office 3, 23, Oleksandr Lysak Subcontractor PE «ENTALPIYA Metalurgiv ave, 41 (0892) 501 325  EAs (Ukraine) PLUS» Zaporizhzhia 69032, Ukraine [email protected]; Oleksiy Verba Subcontractor 72, Sobornosty (053) 250-87-14,  Energy Planning 42 PP ITCON str., Poltava,  EAs (Ukraine) (053) 250-870-1 36029, Ukraine  Feasibility Studies and projects support [email protected];

11, Mayakovskyi Vasyl Stepanenko Subcontractor LLC “ESCO ave.,  Energy Planning 43 (061) 224 68 12 (Ukraine) “Ecosystems” Zhaporizhzhia,  Feasibility Studies and projects support 69035, Ukraine [email protected];

130 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan # Type Name Address Contact Area of Expertise/Activities

16-22 Bohdana Sergiy Mashkara Subcontractor Khmelnytskoho 44 LLC Alfa-ESCO str., Office 513, (044) 209-09-34  EAs (Ukraine) Kyiv, 01030, [email protected]; Ukraine

11, Gofman Evgeniy LLC ESCO “Center of Mayakovskogo Subcontractor (061) 226-01-53  EAs 45 Building ave.,  Feasibility Studies and projects support (Ukraine) Modernization” Zaporizhzhia gofman@esco- 69035 Ukraine buildings.com; 16-22 Bohdana Khmelnytskoho Maksym Kovynev Subcontractor  EAs 46 LLC Ukrsotsproekt str., Office 805, (044) 351 21-33 (Ukraine)  Feasibility Studies and projects support Kyiv, 01030, [email protected]; Ukraine NGO Voluntary 79020, Association of Local Andriy Kyrchiv Subcontractor Pletenetskoho 47 Governments Energy (032) 245 52 62  Energy Planning str. 2, Office 1, (Ukraine) Efficient Cities of Lviv, Ukraine [email protected]; Ukraine (EECU) Evgeniy Nikitin Gonty Street  EAs Subcontractor (044) 456-89-55, (044) 458- 48 LLC Arnica-Center 1,Kyiv, 04112,  Feasibility Studies and projects support (Ukraine) 47-49, (044) 458-46-51 Ukraine  Energy Management [email protected]; 192-А Mikhail Tarnovsky Subcontractor Private energy service Klochkovska str.,  EAs 49 company Office 202, (057) 728-14-56  Feasibility Studies and projects support (Ukraine) «OPTIMENERGO» Kharkov, 61045 [email protected];  Energy Management Ukraine

LLC "The Institute for 11, Volodymyra Vasyl Vovchak Subcontractor Environment and Salskogo street, 50 (044) 206 49 40  Feasibility Studies and projects support (Ukraine) Energy Conservation Kyiv, 04060 (IEEC)" Ukraine [email protected];

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 131 # Type Name Address Contact Area of Expertise/Activities

Georgiy Geletuha (+38 044) 456-94-62; (+38 Subcontractor LLC Scientific 2a Zhelyabova 51 Engineering Center street, office 236 044) 453-28-56  Feasibility Studies and projects support (Ukraine) "Biomass" Kyiv, Ukraine [email protected]; [email protected] Municipal Ruslan Tormosov Development Institute, 14a Igorevskaya  Energy Planning Grantee 063-057-70-10; 52 All-Ukrainian street, 2nd floor,  EAs (Ukraine) 099-63-36-700; Charitable m. Kyiv, Ukraine  Feasibility Studies and projects support Organization (MDI) [email protected];

16/3 Mala Vadym Lytvyn Zhytomyrska (044)2093396; 067 Grantee NGO “Association of  Energy Planning 53 street, office 4, 4481855; (Ukraine) Energy Auditors”  Energy Management Kyiv 01001, [email protected]; Ukraine [email protected]; Tetyana Zhelezna 2a Zhelyabova (044) 206-28-09; (044) 223- Grantee NGO “Renewable 54 street, office 116, 55-86; (067) 588-55-85;  Feasibility Studies and projects support (Ukraine) Energy Agency” (REA) Kyiv, Ukraine [email protected]; [email protected];

NGO “Association of 29 Pavlovskaya Oleksandr Ovdiyenko Grantee 55 Energy Engineers of street, Kyiv, +38 (044) 484-02-75  Energy Management (Ukraine) Ukraine” Ukraine [email protected] Viacheslav Lisovyk Subcontractor NGO «School of Ukraine, Kyiv, 56 +38 (044) 228 87 26  Energy Management (Ukraine) Energy Efficiency» Korabelna st., 6 [email protected]

1, Hristo Zdravko Genchev Subcontractor Smirnenski blvd. 57 EnEffect Group (+359 2) 963 17 14  Energy Planning (Bulgaria) 1164 Sofia, Bulgaria [email protected]

132 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan # Type Name Address Contact Area of Expertise/Activities

12 A, Oleksandr Burtovyyi Subcontractor Khreschatyk str., +38 044 390-0920 58 Law Firm “Antika”  Feasibility Studies and projects support (Ukraine) Floor 2nd, Kyiv, [email protected] 01001, Ukraine a

National Technical 115 Serhiy Denysyuk Subcontractor University of Ukraine Borshchagivska +38 (044) 204-83-08, 204- 59  Feasibility Studies and projects support (Ukraine) “Igor Sikorsky Kyiv street, Kyiv, 93-75. Polytechnic Institute” Ukraine, 03056 [email protected] Expert (country 60 Olena Artemova Senior Environmental Expert national) Expert (country 61 Oleksii Korchmit Senior Local ESCO Expert national) Expert (country 62 Vitalii Bogun Local ESCO Expert national)

MERP Activity 3. Capacity Building and Dissemination

Iryna Romanenko, Director 1/6 Frolovska Subcontractor Academy of Business (044) 238-65-29, Preparing a Local Nongovernmental Organization (NGO) for a 63 str., Kyiv, (Ukraine) Education "NIKLAND" Direct Award from USAID Ukraine (044) 331-44-83 [email protected]; 19A (+380) 44 490 30 00, (+380) Subcontractor Khreshchatyk Preparing a Local Nongovernmental Organization (NGO) for a 64 Ernst and Young 44 490 30 30 (US - Ukraine) str., Kyiv, Direct Award from USAID http://www.ey.com/ua Ukraine Expert (country Preparing a Local Nongovernmental Organization (NGO) for a 65 Oksana Kysil national) Direct Award from USAID

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 133 # Type Name Address Contact Area of Expertise/Activities

16/3 Mala Vadym Lytvyn Zhytomyrska (044)2093396; 067 Grantee NGO “Association of  Energy Planning 66 street, office 4, 4481855; (Ukraine) Energy Auditors”  Energy Management Kyiv 01001, [email protected]; Ukraine [email protected]; Tetyana Zhelezna 2a Zhelyabova (044) 206-28-09; (044) 223- Grantee NGO “Renewable 67 street, office 116, 55-86; (067) 588-55-85;  Feasibility Studies and projects support (Ukraine) Energy Agency” (REA) Kyiv, Ukraine [email protected]; [email protected];

NGO “Association of 29 Pavlovskaya Oleksandr Ovdiyenko Grantee 68 Energy Engineers of street, Kyiv, +38 (044) 484-02-75  Energy Management (Ukraine) Ukraine” Ukraine [email protected] Andrii Kyrchiv, Acting 2 Pletenetsky Director; 032 245 52 62 Grantee Energy Efficient Cities street, office 1, [email protected] 69  Energy Planning (Ukraine) of Ukraine (EECU) Lviv, 79020 Vitalii Volkov Expert; Ukraine (032) 245 52 [email protected]

MERP Cross Cutting: Transparency and Disclosure in the Municipal Energy Sector

34a Grantee Grushevskogo Tetiana Boyko 70 Civil Network OPORA street, office 93, (044) 286-26-70 Transparency and Disclosure in the Municipal Energy Sector (Ukraine) Kyiv 01021, [email protected]; Ukraine

134 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan # Type Name Address Contact Area of Expertise/Activities

ACTIVITY 4. Enhance Capacity of the Government of Ukraine in Low Emission Development Strategies

Thomas D. Peterson President and CEO, Center 1850 M Street for Climate Strategies, Subcontractor Climate Change NW, Suite 840, Enhance Capacity of the Government of Ukraine in Low 71 202/540-2121 office, (US) Strategies Washington, DC 703/887-6696 mobile Emission Development Strategies 20036 tpeterson@climatestrategies .us www.climatestrategies.us Oleksandr Dyachuk, Panasa Senior Research Fellow Subcontractor Institute of Economics Myrnoho St, 26, [email protected]; Enhance Capacity of the Government of Ukraine in Low 72 (Ukraine) and Forecasting Kyiv, 01011, +38(044) 280-1234 Emission Development Strategies Ukraine +38(044) 280-8869 [email protected]; Gary A. Goldstein and Pascal (Pat) DeLaquil, The DWG principles, http://www.decisi [email protected] Subcontractor Enhance Capacity of the Government of Ukraine in Low 73 DWG onwaregroup.co ; (US) Emission Development Strategies m [email protected] m; pdelaquil@decisionwaregro up.com; Expert (country Laskarevsky Enhance Capacity of the Government of Ukraine in Low 74 national) Volodymyr Emission Development Strategies Expert (country Moskvychova Enhance Capacity of the Government of Ukraine in Low 75 national) Kateryna Emission Development Strategies Expert (country Enhance Capacity of the Government of Ukraine in Low 76 Parasuyk Natalya national) Emission Development Strategies

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 135 # Type Name Address Contact Area of Expertise/Activities

Expert (country Enhance Capacity of the Government of Ukraine in Low 77 Bebeshko Taras national) Emission Development Strategies Expert (country Enhance Capacity of the Government of Ukraine in Low 78 Trofimova Iryna national) Emission Development Strategies Expert (country Enhance Capacity of the Government of Ukraine in Low 79 Buksha Ihor national) Emission Development Strategies Inna Samchynska, Director of the Financial Policy 15-V Department, Institute for Budget Borysoglibs'ka Subcontractor Enhance Capacity of the Government of Ukraine in Low 80 and Socio-Economic St., 2nd floor [email protected]: Emission Development Strategies (Ukraine) Research (IBSER) Kyiv, 04070, (044) 353-58-68 Ukraine (044) 492-97-80 (044) 492-97-81

136 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Annex 7. Handover of MERP activities to donors and IFIs

Donors/IFIs Active and/or Area of Assistance MERP Actions/Comments Planning Area Related Activities

Activity 1. Improve Clean Energy Regulatory and Legislative Enabling Environment

Task 1.1. Developing an Enabling Legislative and Policy Environment

• Secondary legislation to implement the adopted primary legislation: MERP provided support to develop two secondary legislation items after Commercial Metering Law, and eight secondary legislation items after IFC (EEBL as related to EEF) • Commercial Metering Law, Communal Communal Services Law. The working groups by MinRegion process the Services Law documents further. • Law on Energy Efficiency in Buildings GIZ (as related to implementation of Art Further energy efficiency legislation initiative 5 of energy efficiency directive) EBRD (as related to improvement of ESCO legislation legislation, if needed) Continuation of support to Liquid Biofuels Law UA BIO (local association – NGO) under consideration in VR Continuation of efforts to develop and adopt third- The concept strategy for TPA and economic model for TPA is developed, party access (TPA) system in DH (including MERP add-on draft legal package enabling TPA system is prepared, initial advocacy and financial unbundling) publicity is performed. The package needs to be moved forward to VR. The draft legal package enabling to organize solid biofuels for energy Continuation of efforts to develop and adopt MERP add-on sector is prepared, initial advocacy and publicity is performed. The framework to organize biomass-to-energy sector package needs to be moved forward to VR. Task 1.3. Supporting Improvement of Social Safety Net for Vulnerable Population

EU Delegation (in context of Energy Current system ensures provision of social subsidies, based on social Social subsidies for vulnerable populations Efficiency Fund) norms, to populations in need; however, further work is needed to tailor the WB system for better accuracy and effectiveness.

Task 1.4. Supporting Energy Efficiency Standards

Further development of energy efficiency standards will be continued Further development of energy efficiency MinRegion, SAEE under MinRegion and SAEE with the involvement of specialized technical standards institutions.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 137 Donors/IFIs Active and/or Area of Assistance MERP Actions/Comments Planning Area Related Activities Task 1.5. Public Information and Awareness

The support is envisioned through “Zhytlo” portal, which is supported by Civic Network OPORA. The portal promotes topics related to responsible ownership, housing policy, tariffs, energy efficiency and clean energy, Website Civil Network OPORA social protection, among others. MERP PSAs, relevant outreach materials, Your Home Program were widely promoted through this portal and its page in Facebook and OPORA will keep up using them in the future. Building capacity of responsible ownership in residential sector through Outreach materials such as brochures and posters HOA/CE RCs, GIZ MERP HOA/Clean Energy RCs and GIZ Project Energy Efficiency in Municipalities II The support will be provided through the Foundation for Saving Energy (ESF - Armenia), which has strong outreach component and works with a Video PSAs ESF-Armenia number of donors and NGOs to promote awareness on energy efficiency issues particularly in the residential sector where utility bills are a burden for the low-income households. The production of a new season will be supported by Ekvis Studio in Your Home Program Ekvis Studio cooperation with Ukrainian Association of Energy Auditors. Its placement will be offered to all national channels.

Activity 2. Promote Investment in Clean Energy Technologies and Applications

Task 2.2. Assisting Municipalities with Planning, Preparing and Financing Clean Energy Projects

Conducting EAs, preparation of feasibility studies (business plans) and due diligence is part of the assistance package for a number of loan products offered by IFIs. EAs EBRD, NEFCO, other EAs for residential sector buildings will be further supported under energy efficiency fund operations. EAs for public buildings sector will be procured, on as needed basis, by municipalities. EU CoM, Association of Energy Efficient Building capacity of Ukrainian Municipalities (CoM members) to develop Energy Planning Cities of Ukraine and implement SEAPs/SECAPs. EU CoM, Association of Energy Efficient Building capacity of Ukrainian Municipalities (CoM members) to develop SEAPs/SECAPs implementation support Cities of Ukraine and implement SEAPs/SECAPs.

138 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Donors/IFIs Active and/or Area of Assistance MERP Actions/Comments Planning Area Related Activities Preparation of feasibility studies (business plans). EBRD, NEFCO, EIB, GIZ, Ukrainian Project Proposals Preparation A number of MERP municipalities have capacity to develop project authorities proposals using local professional expertise.

Projects Implementation Support EBRD, NEFCO, EIB, WB The provision of support is envisioned under respective loan agreements.60

EU is providing funding for demo projects under CoM initiative, NEFCO is considering funding for localities in Eastern Ukraine. Demonstration Projects EU, NEFCO, Ukrainian authorities Certain demo projects were specifically prepared by MERP for public funding. Task 2.3. Introduction of Energy Management Systems

Development of energy management GIZ, UNDP Support to SAEE, support to dissemination activities documentation Support to selected municipalities with introduction of EM, including Support to implementation of EM in municipalities GIZ, UNDP, professional associations automated EM systems Institutionalization of EM at the national level and Development of regulatory acts that will imply implementation of EM by GOU, SAEE, professional associations municipal levels municipalities Professional associations, profile training The certification program initiated under MERP is ongoing; other programs Energy Management Certification centers61 at universities are available at Ukrainian universities

Task 2.5. Support Mechanisms That Mobilize Private Sector Investment

UNDP is currently supporting ESCO mechanism implementation.62 The project is for the period through 2021. Support to ESCO mechanisms implementation UNDP, EBRD, SAEE The provision of support is envisioned under EBRD program for energy efficiency in municipalities63 MinEconomy, SAEE, EBRD, United Support to PPPs Nations Economic Commission for The support is provided by EBRD64 and UNICE65 Europe (UNECE), local organizations IFC is considering support to clean energy CACs under the new project Support to clean energy CACs IFC aiming to promote energy efficiency in residential sectors

60 For example, see: http://www.ebrd.com/work-with-us/projects/psd/ukraine-public-sector-energy-efficiency-framework.html 61 http://tcem.iee.kpi.ua/en 62 http://www.ua.undp.org/content/ukraine/en/home/operations/projects/environment_and_energy/investment-in-EE-in-public-buildings-in-small-cities.html 63 For example: http://www.ebrd.com/work-with-us/projects/psd/ukraine-public-sector-energy-efficiency-framework.html 64 http://bunews.com.ua/economy/item/infrastructure-ukraine-looks-to-turkey-for-public-private-partnership-inspiration 65 http://en.appp.com.ua/academy/

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 139 Donors/IFIs Active and/or Area of Assistance MERP Actions/Comments Planning Area Related Activities EU, IFC, and the GOU are launching energy efficiency funds aiming to Support to energy efficiency in residential sector EU, IFC, SAEE, MinRegion support residential energy efficiency.66 In addition, the current “warm loans” program will be operational through 2020.

Activity 3. Capacity Building and Dissemination

Task 3.1. Preparing a Local Nongovernmental Organization (NGO) for a Direct Award from USAID

NGOs supported by MERP are currently Participation in GOU working groups related to institutionalization and sustainable and conducting activities relevant to AEE, AEA development of energy management, EAs, and related regulatory MERP agenda and scope of work framework in Ukraine. NGOs supported by MERP are currently Support to the cities in introducing energy management and energy sustainable and conducting activities relevant to AEA monitoring, trainings in EAs and energy management67. MERP agenda and scope of work NGOs supported by MERP are currently Support to energy planning in Ukrainian municipalities and conducting sustainable and conducting activities relevant to EECU energy efficiency promotion and dissemination events. MERP agenda and scope of work NGOs supported by MERP are currently Preparation of regional biomass assessments, capacity building of sustainable and conducting activities relevant to REA municipalities in preparing biomass heat production projects. MERP agenda and scope of work

Task 4. Enhance Capacity of the Government of Ukraine in Low Emission Development Strategies

Potential discussions between MinEcology and EBRD on Paris Agreement NDC update support; Strengthening institutional capacity in planning N/A Potential discussion between EU Delegation office in Ukraine and LEDS MinEcology on new ClimaEast project for CIS countries on climate mitigation and adaptation policies and actions. Developing uniform database on LEDS and Institute of Economics and Forecasting, exchanging experiences and best practices with Transfer of web-based LEDS database support National Academy of Science of Ukraine other countries participating in EC-LEDS

66 https://www.kmu.gov.ua/en/news/yes-ifc-ta-nimechchina-pidtrimali-spivfinansuvannya-ukrayinskogo-fondu-energoefektivnosti-gennadij-zubko 67 https://aea.org.ua/projects/training-centers-for-energy-management/

140 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Annex 8. Information on loans issued under DCA agreement with Bank Lviv

Cumulative percent of max. authorized Number Borrower’s Agreement portfolio amount, # Location of Brief description of the project USAID FY USD Sector date USD Loans 8,193,415

1 SME Rivne region 1 Replacement of machinery 12.24.2013 2014 213,675 2.61 percent

Modernization of residential building’s 2 HOA Lviv city 1 06.17.2014 2014 1,849 2.63 percent internal heating network Construction of energy efficiency 3 SME Lviv region 1 07.04.2014 2014 534,188 9.15 percent greenhouses Replacement of steam supply system 4 SME Lviv region 1 07.14.2014 2014 125,740 10.68 percent using gas with solid fuel system Introduction of heating system using 5 ESCO Volyn region 1 08.12.2014 2014 27,737 11.02 percent solid fuels Replacement of gas furnace with 6 SME Lviv region 1 08.28.2014 2014 52,902 11.67 percent electrical Replacement of gas furnace with 6 SME Lviv region 1 08.28.2014 2014 18,491 11.89 percent electrical Introduction of heating system using 7 ESCO Lviv region 1 01.09.2015 2015 22,189 12.17 percent solid fuels Replacement of steam supply system 8 SME Lviv region 1 07.19.2016 2016 781,250 21.70 percent using gas with solid fuel system Purchase of equipment for furniture 9 SME Lviv region 1 12.09.2016 2017 6,102 21.78 percent production

10 SME Kyiv 1 Reconstruction of real estate 12.01.2016 2017 500,000 27.88 percent

11 SME Lviv region 1 Purchase of equipment 10.20.2016 2017 12,019 28.02 percent

12 SME Lviv region 1 Construction of car wash station 12.08.2016 2017 534,188 34.54 percent

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 141 Cumulative percent of max. authorized Number Borrower’s Agreement portfolio amount, # Location of Brief description of the project USAID FY USD Sector date USD Loans 8,193,415

Working capital for business SME Lviv region 1 12.01.2016 2017 18,491 34.77 percent development 13 Working capital for business SME Lviv region 1 07.19.2017 2017 9,246 34.88 percent development

14 SME Lviv region 1 Purchase of solar panels 12.06.2016 2017 8,184 34.98 percent

15 SME Lviv city 1 Expansion of nonresidential premises 02.21.2017 2017 50,000 35.59 percent

Purchase of equipment for furniture 16 SME Lviv city 1 12.23.2016 2017 18,491 35.82 percent manufacturing Purchase of equipment for furniture 17 SME Lviv city 1 12.06.2016 2017 18,491 36.04 percent manufacturing Purchase of equipment for furniture 18 SME Lviv city 1 06.01.2017 2017 27,737 36.38 percent manufacturing

19 SME Lviv region 1 Purchase of equipment/machinery 04.18.2017 2017 27,108 36.71 percent

20 SME Lviv region 1 Purchase of truck 08.18.2017 2017 16,272 36.91 percent

Total 22 3,024,350

142 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Annex 9. MERP Accomplishments under Activity 4. Enhance Capacity of the Government of Ukraine in Low Emission Development Strategies

Table 4-1. Accomplishments under Activity 4

MERP assistance to the GOU in Strengthening Institutional Capacity in Planning LEDS

State Climate Policy Concept until 2030, approved by Cabinet of Ministers resolution #932-p on December 7, 2016. This State Climate Policy Concept defines the national climate change policy of Ukraine until 2030 and provides grounds for development of climate change legislation, low emission development strategy, and energy efficiency and renewable energy action plans while reflecting Paris Agreement provisions. State Climate Policy Concept establishes goals on (i) enhancing institutional capacity on developing and ensuring implementation of state climate change policy; (ii) climate change mitigation through anthropogenic GHG emissions reduction and increasing GHG emissions absorptions and ensuring gradual transition to low emission development of the country; and (iii) adaptation to climate change, building resilience and mitigating the risks caused by climate change. https://menr.gov.ua/news/32001.html State Climate Policy Action Plan, approved by Cabinet of Ministers resolution #878-р on December 6, 2017. The Action Plan outlines specific activities, policies, and measures to be implemented by GOU agencies, ministries, and local authorities to transition to low emission development pathway and implement Paris Agreement provisions. The Action Plan explains to GOU agencies how to implement state climate policy in all sectors and what actions are to be taken by ministries, state agencies, and local governance bodies until 2030. https://menr.gov.ua/news/32000.html GOU side event at Marrakech Climate Conference – COP-22 “Green Economic Transition, Planning and Actions in Ukraine,” supported, 2016, to present and discuss climate and energy efficiency, renewable energy policies and measures, lessons learned and way forward to address low emission development challenges in Ukraine. LEDS capacity building training course for high-level GOU officials, ministries and agencies, developed curriculum, 3-days training conducted, post-training survey conducted. LEDS Study Tour to the United States for 13 state officials representing VR, Presidential Administration, ministries, state agencies and academia, 2017. National Low Emission Development Strategy until 2050, draft GOU resolution. Glossary Monitoring, Reporting, Verification of GHG Emissions, developed and published. Tool Kit for Monitoring, Reporting, Verification of GHG Emissions, developed and published. Monitoring, Reporting, Verification of GHG Emissions training curriculum, developed trainings conducted for three partner cities and for the cement industry. Sixth National Communication on Climate Change, developed and submitted for UNFCCC by MinEcology. The communication outlines national and regional climate change and crosscutting policy and measures, including forecasting and projections within the First Biennial Reporting period. Seventh National Communication on Climate Change, developed and submitted to UNFCCC by MinEcology. Specific input by MERP on policies and measures on GHG emissions reduction and absorption. Contributed section that outlines and analyzes national and regional policies and measures leading to GHG emissions reduction in Ukraine during 2013-2016, applying the internationally recognized modeling tool, TIMES-Ukraine. National GHG Inventory Enhancement Plan, analytical document developed. Training series for state officials on TIMES-Ukraine model tool, to be applied for macroeconomic long-term strategic forecasting, projections and modeling. Paris Agreement ratification by VR, July 14, 2016. Article 6 of Paris Agreement Analytical Report, developed by MERP, outlines the best implementations pathways of this Article in Ukraine. This analytical report was accepted by MinEcology and relevant submissions were placed on the UNFCCC website.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 143 Table 4-1. Accomplishments under Activity 4

Ukrainian INDC, placed on UNFCCC portal after it was adopted by the Cabinet of Ministers of Ukraine, with the pledge not to exceed 60 percent of GHG emissions by 2030 compared to the base year of 1990. MERP assistance to the GOU in Implementing LEDS through support in developing and introducing clean energy technologies and energy services Technology Needs Assessment (TNA) Report for the Municipal Sector. The TNA report was based on the latest UNFCCC and UNEP initiatives, and is a part of Technology Development and Technology Transfer Mechanism under UNFCCC that has not been previously applied in Ukraine. Ukraine’s TNA Report is a stepping stone in supporting clean energy/energy efficiency projects and selecting the best low emission technology applicable in the Ukrainian municipal sector, i.e., in heat production, transportation, lightning, water & sewage, and solid waste treatment systems. Sustainability Criteria for Biofuels and Bio-liquids Production, including Methodology to Calculate GHG Emission Reductions during Production and Use of Biofuels and Bio-liquids, developed. User Manual for the BioGrace-I Excel Tool, version 4d developed. The deliverable is developed to support SAEE on Directive 2009/28/EC Annex V provisions. The Project developed all documents necessary for calculating GHG emissions from biofuels and bio-liquids using the BioGrace tool, including a demo version of the calculation tool (Excel-file), BioGrace calculation rules, list of Standard Values and User Manual. MERP also conducted analysis of implementation of the measures for realization of clean energy/energy efficiency projects by the GOU, per provisions of the Directive 2009/28/EC, especially GHG emissions calculation methodology for biofuels and bio-liquids. MERP assistance to the GOU in Developing a uniform data base on LEDS and exchanging experiences and best practices with other countries participating in EC-LEDS Concept Paper on establishing the database. Development of the UA-LEDS database to assist Ukraine with selecting and applying low emissions technologies and tools in meeting its LEDS obligations. The UA-LEDS database outlines the LEDS process, conducts searches, updates documents, offers proposals, and allows exchange of experience. LEDS-Ukraine database is based on the global LEDS website, www.ledsgp.org, where all materials and tools will be available bilingually or in Ukrainian. This web-based database provides access to a general description of the LEDS process worldwide and Ukraine-specific circumstances, various tools and methodologies, legal framework, technical aspects, and related data and links. www.lowemission.org.ua/

144 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan Annex 10. List of deliverables and most important documents produced by MERP68

DEC Date of # Name of document Status69 Language upload Date due issue date

Deliverables

Municipal Energy Reform Project (MERP) 1 First Quarterly Report September 27, 2013 Y English JAN2014 2/15/2014 2/28/2014 – December 31, 2013 Municipal Energy Reform Project (MERP) 2 Second Quarterly Report January 1, 2014 – Y English APR2015 5/10/2014 5/30/2014 March 31, 2014 Municipal Energy Reform Project (MERP) 3 Third Quarterly Report April 1, 2014 – June Y English JUL2014 8/10/14 8/30/14 30, 2014 Municipal Energy Reform Project (MERP) 4 Fourth Quarterly Report July 1, 2014 – Y English OCT2014 6/24/2016 11/30/2014 September 30, 2014 Municipal Energy Reform Project (MERP) 5 Fifth Quarterly Report October 1, 2014 – Y English JAN2015 8/25/2016 2/28/2015 December 31, 2014 Municipal Energy Reform Project (MERP) 6 Sixth Quarterly Report January 1, 2015 – Y English APR2015 8/25/2016 5/30/2015 March 31, 2015 Municipal Energy Reform Project (MERP) 7 Seventh Quarterly Report April 1, 2015 – Y English JUL2015 11/1/2016 8/30/2015 June 30, 2015 Municipal Energy Reform Project (MERP) 8 Eighth Quarterly Report July 1, 2015 – Y English OCT2015 6/24/2016 11/30/2015 September 30, 2015 Municipal Energy Reform Project (MERP) 9 Ninth Quarterly Report October 1, 2015 – Y English JAN2016 6/24/2016 2/28/2016 December 31, 2015 Municipal Energy Reform Project (MERP) 10 Tenth Quarterly Report January 1, 2016 – Y English APR2016 6/23/2016 5/30/2016 March 31, 2016 Municipal Energy Reform Project (MERP) 11 Eleventh Quarterly Report April 1, 2016 – Y English JUL2016 8/25/2016 8/30/2016 June 30, 2016 Municipal Energy Reform Project (MERP) 12 Twelfth Quarterly Report July 1 – Y English OCT2016 11/25/16 11/30/2016 September 30, 2016 Municipal Energy Reform Project (MERP) 13 Thirteenth Quarterly Report October 1 – Y English JAN2017 2/26/2018 2/28/2017 December 31, 2016 Municipal Energy Reform Project (MERP) 14 Fourteenth Quarterly Report January 1 – Y English APR2017 2/26/2018 5/30/2017 March 31, 2017

68 For submission to Development Experience Clearinghouse (DEC) 69 Status as of April 30, 2018: Y – uploaded on DEC; N – not yet uploaded on DEC.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 145 DEC Date of # Name of document Status69 Language upload Date due issue date Municipal Energy Reform Project (MERP) 15 Fifteenth Quarterly Report April 1 – June Y English JUL2017 2/26/2018 8/30/2017 30, 2017 Municipal Energy Reform Project (MERP) 16 Sixteenth Quarterly Report July 1 – Y English OCT2017 2/26/2018 11/30/2017 September 30, 2017 Municipal Energy Reform Project (MERP) 17 Seventeenth Quarterly Report October 1 – Y English JAN2018 2/26/2018 2/28/2018 December 31, 2017 Municipal Energy Reform Project (MERP) 18 Eighteenth Quarterly Report January 1 – N English APR2018 - - March 31, 2018

Activity 1 documents

Report: “Analysis of the Decree of the President of Ukraine On Amendments to 20 Y English JAN2014 3/10/2014 3/30/2014 the Regulation on State Agency on Energy Efficiency and Energy Saving of Ukraine” Report: “Analysis of draft laws approval of which could essentially influence on 21 implementation of municipal energy reform Y English DEC2013 1/20/2014 1/30/2014 registered in VR of Ukraine for the reported period” Report: “Analysis of main requirements of 22 Y English FEB2014 2/20/2014 2/30/2014 the EU legislation on energy services” Sent for Presentation: Experience of EU states in 23 N English SEPT2017 - COR Organizing Solid Biomass Markets clearance Report: “Recommendations on the 24 Organization of the Solid Biofuels Market in Y Ukrainian DEC2017 2/1/2018 2/28/2018 Ukraine” Presentation: International examples of Sent for 25 supporting “green energy” (district heating) N English MAR2017 - COR projects in municipalities clearance Report: “Analysis of the Consequences of Impact of GOU Decree #217 dated June 26 Y Ukrainian SEPT2016 3/6/2018 3/5/2018 18, 2014, on Operations of Heating Companies” Presentation: Experience of EU states in Sent for 27 organizing district heating sector under N English APR2017 - COR competitive frameworks clearance Presentation: Concept Strategy for Sent for 28 Introduction of Competition in District N English FEB2017 - COR Heating Sector (Generation) Of Ukraine clearance Report: “Developing a strategy for 29 introducing competition into the district Y** English NOV2016 12/16/2016 12/30/2016 heating sector of Ukraine” Report: “Developing a strategy for 30 introducing competition into the district Y** Ukrainian NOV2016 12/7/2016 12/30/2016 heating sector of Ukraine”

146 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan DEC Date of # Name of document Status69 Language upload Date due issue date Report on the development of a model of Sent for 31 TPA to the existing infrastructure in the N Ukrainian JAN2018 - COR district heating sector clearance Report: “Review on methods of economic 32 analysis and utility efficiency calculation in Y English DEC2015 11/3/2016 11/30/2016 water & wastewater sector in EU countries” Report: “Overview of use of benchmarking results in regulatory process EU countries 33 Y English OCT2015 11/3/2016 11/30/2016 in water & wastewater and district heating sectors” Report: “Review of international experience on inclusion into tariff setting of quality of 34 services indicators and other special issues Y English DEC2015 11/4/2016 11/30/2016 in water & wastewater and district heating sectors” Report: “Overview of benchmarking 35 systems in EU countries in water & Y English OCT2015 11/3/2016 11/30/2016 wastewater and district heating sectors” Report: “Analysis of international experience in implementation of incentive- 36 Y English NOV2015 11/3/2016 11/30/2016 based regulation in EU countries in water & wastewater and district heating sectors” Report: “Recommendations of how to use 37 benchmarking results in regulatory activities Y English DEC2015 11/7/2016 11/30/2016 for water and wastewater sector” Report: “International Experience over Thermal Energy Generation Pricing 38 Y English MAR2017 4/12/2018 5/2/2018 Regulatory Methods under Incentive-Based Regulation” Report: “International Experience regarding Regulatory Analysis, Assessment and the 39 Approval of Long-Term Investment Y English APR2017 4/12/2018 5/2/2018 Programs under Incentive-Based Regulation” Report: “Rate of Return Practice for Incentive-based Regulation in District 40 Y English MAR2017 4/12/2018 5/2/2018 Heating and District Water Supply and Wastewater Treatment Sectors” Report: “Concept and action plan for Sent for introduction of incentive-based regulation in 41 N English JUN2016 - COR heating, district water supply and sewage clearance sectors” Report: “Concept for Development of the Procedure/Rules for Regulatory Accounting 42 by Licensed Type of Activity by Entities Y** Ukrainian JUL2016 11/7/2016 11/30/2016 Operating in the Heating and Centralized Water Supply and Sanitation Sectors”

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 147 DEC Date of # Name of document Status69 Language upload Date due issue date Presentation: Introduction of incentive- based regulation in heating sector and Sent for centralized water supply and sewage sector 43 N English MAR2017 - COR in the framework of the implementation of clearance the USAID Municipal Energy Reform in Ukraine Project Report: “Development of changes to Asset Sent for 44 Valuation Methodology for the purpose of N Ukrainian JUL2016 - COR incentive-based regulation” clearance Report: “Benchmarking with clusters of 45 centralized water and wastewater Y Ukrainian AUG2016 11/3/2016 11/30/2016 companies” Report: “Recommendations on calculation and use of key performance indicators in 46 Y Ukrainian SEPT2016 11/7/2016 11/30/2016 the centralized water supply and wastewater sector” Report: “Recommendations on the 47 comparative analysis (benchmarking) of Y Ukrainian DEC2017 2/26/2018 2/28/2018 heating companies within clusters” Report: “Recommendations on Considering 48 Special Aspects about Performance of Y Ukrainian JUN2017 3/6/2018 3/5/2018 Utility Companies in Tariff Model” Report: “Recommendations on the 49 publication of the results of benchmarking Y Ukrainian SEPT2016 2/15/2018 2/28/2018 in the water and wastewater sector” Report: “Methodology of Monitoring Quality 50 of Services in the area of Heating Supply, Y Ukrainian AUG2016 11/7/2016 11/30/2016 Centralized Water Supply and Sewage” Report on the survey on quality of certain 51 types of utility services and consumer Y Ukrainian FEB2017 3/7/18 3/6/18 willingness to pay for better quality services Report: “Methodology for monitoring the Sent for 52 quality of district heating and centralized N Ukrainian JAN2017 - COR water supply and wastewater services” clearance Report: “Recommendations for improving 53 transparency of regulatory decisions on Y Ukrainian JAN2017 3/6/2018 3/2/2018 tariff formation and setting” Report: “Analysis of Changes in The 54 Legislation of Ukraine Governing Social Y Ukrainian FEB2014 2/20/2014 3/10/2014 Assistance During 2011-2013” Report: “Tools for Assessing and 55 Forecasting Service Affordability for Y Ukrainian SEPT2015 11/4/2016 11/30/2016 Population” Report: “Analysis and Assessment of Outcomes of Reform of the System of 56 Y Ukrainian OCT2016 1/31/2018 2/10/2018 Social Protection for Consumers of Housing and Communal Services during 2014-2016” Report: “Analysis of Social Norms for Consumption of Housing and Communal 57 Y Ukrainian MAY2017 1/31/2018 2/10/2018 Services. Recommendations on the Improvement of the Norms”

148 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan DEC Date of # Name of document Status69 Language upload Date due issue date Report: “The Concept of Monetization of 58 Subsidies for Housing and Communal Y Ukrainian SEPT2017 1/31/2018 2/10/2018 Services” Information Materials with MERP 59 Y English JAN2014 2/20/2014 3/10/2014 Description 60 Public Outreach Concept and Action Plan Y English JUL2015 11/4/2016 11/30/2016 Report on Public Opinion Survey, "Attitude 61 of Public to Problems of Energy Saving and Y Ukrainian MAY2016 12/6/2016 12/30/2016 Use of Renewable Energy Sources" Report on the public opinion survey on energy efficiency and clean energy 62 Y Ukrainian OCT2014 11/21/2016 11/30/2016 conducted in the framework of the USAID Municipal Energy Reform Project in Ukraine Report on survey of homeowners associations and housing building 63 cooperatives – participants of the National Y Ukrainian JUN2016 12/6/2016 12/30/2016 Program of Support to Energy Efficiency (“warm” loans program) Report on Survey of Participants of the State Program on Partial Reimbursement 64 Y Ukrainian DEC2016 4/20/18 3/5/2018 from the State Budget for Energy Efficiency Loans Report: “Methodology for Monitoring and 65 Assessment of the State Energy Efficiency Y Ukrainian MAR2017 4/12/2018 5/2/2018 Loans Compensation Program” Public opinion survey on effectiveness of Sent for 66 USAID Municipal Energy Reform Project in N Ukrainian 2017 - COR Ukraine Outreach Campaign clearance Poster: “Kherson Alternative Energy 67 Y Ukrainian JUN2016 11/16/2016 11/30/2016 Sources” 68 Poster: “Volyn Alternative Energy Sources” Y Ukrainian JUL2016 11/16/2016 11/30/2016 69 Poster: “Sumy Alternative Energy Sources” Y Ukrainian AUG2016 11/16/2016 11/30/2016 Infographic posters highlighting mechanism 70 on communal services subsidies allocation, Y Ukrainian 2015 11/16/2016 11/30/2016 categories of recipients, etc. 71 Poster on Energy Saving Y English NOV2014 11/16/2016 11/30/2016 72 Poster on Energy Saving Y Ukrainian NOV2014 11/16/2016 11/30/2016 Poster: “Deep retrofit or patch thermal 73 Y Ukrainian 2016 11/16/2016 11/30/2016 insulation” 74 Poster: “How to Establish HOA?” Y Ukrainian MAR2016 11/16/2016 11/30/2016 Billboard poster: “Switch to alternative 75 Y Ukrainian 2015 11/16/2016 11/30/2016 energy sources” Billboard posters and city lights that 76 promote energy efficiency in multiapartment Y Ukrainian 2015-2016 11/16/2016 11/30/2016 buildings Sent for Billboard posters and city lights: "Energy 77 N Ukrainian 2016 - COR Saving Arithmetic" clearance

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 149 DEC Date of # Name of document Status69 Language upload Date due issue date Sent for Billboard posters and city lights: "Change 78 N Ukrainian 2016 - COR the way you take care of your home" clearance Brochure: “Management of multiapartment 79 Y Ukrainian 2015 11/16/2016 11/30/2016 building: how to use your rights” 80 Brochure: “Clean Energy – Clean Future” Y English 2015 11/16/2016 11/30/2016 81 Brochure: “Clean Energy – Clean Future” Y Ukrainian 2015 11/16/2016 11/30/2016 Brochure: "Energy Efficiency in Buildings: 82 Y Ukrainian 2015 11/16/2016 11/30/2016 What to Do and Where to Get Money?" 83 Brochure: "Why tariffs go up?" Y Ukrainian 2016 11/16/2016 11/30/2016 84 Brochure: "Why tariffs go up?" Y English 2014 11/16/2016 11/30/2016 85 Brochure: "Need more heat?" Y Ukrainian 2014 11/16/2016 11/30/2016 86 Brochure: "Need more heat?" Y English 2014 11/16/2016 11/30/2016 87 Brochure: "Our home - our property" Y Ukrainian 2015 11/16/2016 11/30/2016 Sent for 88 Brochure: "Tariffs explained” N Ukrainian 2017 - COR clearance Newsletter on investment opportunities, 89 Y Ukrainian MAR2016 11/16/2016 11/30/2016 Issue 1 Newsletter on investment opportunities, 90 Y Ukrainian JUN2016 11/16/2016 11/30/2016 Issue 2 Sent for Newsletter on investment opportunities, 91 N Ukrainian SEPT2016 - COR Issue 3 clearance Sent for Newsletter on investment opportunities, 92 N Ukrainian DEC2016 - COR Issue 4 clearance Sent for 93 TV Program Your Home 3 season N Ukrainian 2017/2018 - COR clearance Sent for 94 TV Program Your Home 2 season N Ukrainian 2016/2017 - COR clearance Sent for 95 TV Program Your Home 1 season N Ukrainian 2015/2016 - COR clearance Sent for 96 Video PSAs 1-9 N Ukrainian Nov2017 - COR clearance Sent for 97 Video / Trainings for Journalists 1-6 N Ukrainian Dec2017 - COR clearance

Activity 2 documents

Cities selection and cooperation strategy in 98 Y English JAN2014 2/20/2014 3/10/2014 MERP

150 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan DEC Date of # Name of document Status69 Language upload Date due issue date Cities selection and cooperation strategy in English - 99 Y JAN2014 2/20/2014 3/10/2014 MERP Ukrainian Report: “Assessment of the Willingness of 100 Local Banks to use Development Credit Y English SEPT2014 10/20/2014 10/30/2014 Authority Loan Guarantee” Report: “Gap Analysis for energy 101 Y English JUN2014 11/4/2016 11/30/2016 management and EA standards” Report: “Practices of implementation of EU 102 Directive 2012/27 regarding energy Y English AUG2016 11/7/2016 11/30/2016 management systems and EA” Report: “Practices of implementation of EU 103 Directive 2012/27 regarding energy Y Ukrainian AUG2016 11/7/2016 11/30/2016 management systems and EA” Report: “Methodology to Monitor Energy 104 Y English DEC2015 11/4/2016 11/30/2016 Efficiency of Buildings” Report: “Assessment of Readiness/Willingness of Cities to 105 Y Ukrainian FEB2016 11/4/2016 11/30/2016 Implement Clean Energy Public-Private Partnerships” Report: “Catalogue of loan, grant and 106 technical assistance programs in energy Y Ukrainian OCT2015 11/20/15 11/30/15 efficiency area” Report on creation of PIUs in partner cities 107 and communal enterprises (including Y Ukrainian AUG2014 11/9/2016 11/30/2016 relevant instructions) Report: “Methodology of EAs 108 Y Ukrainian FEB2014 11/3/2016 11/30/2016 implementation in MERP partner cities” Report: “Technical Recommendations on 109 How to Measure Savings as a Result of Y Ukrainian MAR2016 11/7/2016 11/30/2016 Implementing Energy Service Procedures” Guidance for the project technologies 110 Y Ukrainian FEB2016 11/7/2016 11/30/2016 selection in communal sector in Ukraine Manual: Methodological recommendations 111 on public hearings on Sustainable Energy Y Ukrainian JUN2015 11/10/2016 11/30/2016 Action Plans (SEAPs) Manual: Preparation and implementation of projects on natural gas substitution with 112 Y Ukrainian JUL2016 11/8/2016 11/30/2016 biomass in heat energy production in Ukraine 113 Manual on Municipal Energy Management Y Ukrainian NOV2014 11/8/2016 11/30/2016 Manual: Preparation of project proposals for 114 Y Ukrainian MAR2015 11/8/2016 11/30/2016 clean energy projects Report: “Assessment of Current Clean 115 Y Ukrainian JUL2016 11/21/16 11/30/2016 Energy Potential of Volyn Oblast” Report: “Assessment of Current Clean 116 Y Ukrainian AUG2016 11/21/16 11/30/2016 Energy Potential of Sumy Oblast” Report: “Assessment of Current Clean 117 Y Ukrainian JUN2016 11/21/16 11/30/2016 Energy Potential of Kherson Oblast”

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 151 DEC Date of # Name of document Status69 Language upload Date due issue date Presentation: Solid Waste Management: 118 Priority Issues and Recommendations for Y English JUL2016 11/4/2016 11/30/2016 Khmelnitsky Catalogue of Investment Projects of Ivano- 119 Y Ukrainian AUG2016 11/7/2016 11/30/2016 Frankivsk Catalogue of Investment Projects of 120 Y Ukrainian DEC2014 11/7/2016 11/30/2016 Chernigiv 121 Catalogue of Investment Projects of Rivne Y Ukrainian SEPT2016 11/7/2016 11/30/2016 Catalogue of Investment Projects of 122 Y Ukrainian SEPT2016 11/7/2016 11/30/2016 Ternopol Catalogue of Investment Projects of Kryvyi 123 Y Ukrainian SEPT2016 11/7/2016 11/30/2016 Rig 124 Catalogue of Investment Projects of Dnypro Y Ukrainian SEPT2016 11/7/2016 11/30/2016 Catalogue of Investment Projects of 125 Y Ukrainian SEPT2016 11/7/2016 11/30/2016 Vinnytsia 126 Catalogue of Investment Projects of Sumy Y Ukrainian SEPT2016 11/7/2016 11/30/2016 Catalogue of Investment Projects of 127 Y Ukrainian SEPT2016 11/7/2016 11/30/2016 Khmelnytskyi 128 Catalogue of Investment Projects of Lutsk Y Ukrainian AUG2015 11/7/2016 11/30/2016 129 Investment Projects Register of Kyiv Y Ukrainian NOV2016 11/7/2016 11/30/2016 130 Investment Projects Register - Zaporizhzhia Y Ukrainian SEPT2016 11/7/2016 11/30/2016 Register of Investment Projects of 131 Y Ukrainian NOV2016 11/7/2016 11/30/2016 Kramatorsk 132 Investment Projects Register – Kherson Y Ukrainian NOV2016 11/7/2016 11/30/2016 133 Investment Projects Register - Pavlohrad Y Ukrainian SEPT2016 11/7/2016 11/30/2016 Sustainable Energy Action Plan of the City 134 Y Ukrainian MAY2016 11/4/2016 11/30/2016 of Khmelnytskyi 2016-2025 Sustainable Energy Action Plan of the City 135 Y Ukrainian OCT2016 11/4/2016 11/30/2016 of Kyiv 2016-2020 Sustainable Energy Action Plan of the City 136 Y Ukrainian APR2016 11/4/2016 11/30/2016 of Rivne 2015-2020 Sustainable Energy Action Plan of the City 137 Y Ukrainian MAR2015 11/4/2016 11/30/2016 of Dnipro 2015-2025 Sustainable Energy Action Plan of the City 138 Y Ukrainian APR2015 11/4/2016 11/30/2016 of Kramatorsk 2015-2030 Sustainable Energy Action Plan of the City 139 Y Ukrainian OCT2015 11/4/2016 11/30/2016 of Lutsk 2012-2015 Sustainable Energy Action Plan of the City 140 Y Ukrainian FEB2015 11/4/2016 11/30/2016 of Kherson 2015-2030 Sustainable Energy Action Plan of the City 141 Y Ukrainian MAR2015 11/4/2016 11/30/2016 of Ivano-Frankivsk 2015-2020 Sustainable Energy Action Plan of the City 142 Y Ukrainian SEPT2015 11/4/2016 11/30/2016 of Sumy 2015-2025 Sustainable Energy Action Plan of the City 143 Y Ukrainian MAR2015 11/4/2016 11/30/2016 of Zaporizhzhia 2016-2020

152 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan DEC Date of # Name of document Status69 Language upload Date due issue date Sustainable Energy Action Plan of the City 144 Y Ukrainian MAR2015 11/4/2016 11/30/2016 of Zaporizhzhia 2021-2030 Sustainable Energy Action Plan of the City 145 Y Ukrainian JUN2015 11/4/2016 11/30/2016 of Chernigiv 2015-2023 Sustainable Energy Action Plan of the City 146 Y Ukrainian SEPT2015 11/17/2016 11/30/2016 of Kryvyi Rih Sustainable Energy Action Plan of the City 147 Y Ukrainian AUG2015 11/17/2016 11/30/2016 of Pavlohrad Sustainable Energy Action Plan of the City 148 Y Ukrainian AUG2016 11/17/2016 11/30/2016 of Ternopil Training Presentation: Introduction to energy management system in the area of 149 Y Ukrainian NOV2015 11/4/2016 11/30/2016 central heating under the standard ISO- 50001 Training Presentation: Implementation of the Energy Management System in the 150 Area of District Heating in Accordance with Y Ukrainian 2016 11/4/2016 11/30/2016 ISO-50001 - the First Step toward Effective Energy Training Presentation: EA and energy 151 efficiency indicators in case of a fuel using Y Ukrainian JAN2015 11/4/2016 11/30/2016 system Training Presentation: Energy Efficiency in 152 Y Ukrainian DEC2015 11/4/2016 11/30/2016 Buildings Training Presentation: Utilizing Biofuels for 153 Y Ukrainian JAN2015 11/4/2016 11/30/2016 Thermal Energy Generation Training Presentation: Energy management 154 Y Ukrainian JAN2015 11/4/2016 11/30/2016 in partner cities Training Presentation: Information and 155 Y Ukrainian JAN2015 11/4/2016 11/30/2016 analytical component of energy balances Training Presentation: Complex Systems of 156 Energy Management in District Heating and Y Ukrainian JAN2015 11/4/2016 11/30/2016 Connecting to Buildings Training Presentation: Municipal System of 157 Energy Management: Goals, Objectives, Y Ukrainian JAN2015 11/4/2016 11/30/2016 Structure, Measures Training Presentation: Methodology to 158 Y Ukrainian JAN2015 11/4/2016 11/30/2016 Monitor Energy Efficiency of Buildings Training Presentation: Energy management 159 – instrument to implement Sustainable Y Ukrainian JAN2015 11/4/2016 11/30/2016 energy development plan Training Presentation: Energy Management. Practical Training on Making 160 the Baseline of Thermal Energy Y Ukrainian JAN2015 11/4/2016 11/30/2016 Consumption by the Buildings of the Department of Education in Sumy Training Presentation: Purchasing goods, 161 works and non-consultancy services Y Ukrainian JAN2015 11/4/2016 11/30/2016 financed by EBRD and WB

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 153 DEC Date of # Name of document Status69 Language upload Date due issue date Training Presentation: Purchasing goods, 162 Y Ukrainian JAN2015 11/9/2016 11/30/2016 works and services financed by EBRD Training presentation: WB Guidelines on 163 Y Ukrainian JAN2015 11/4/2016 11/30/2016 Selection of Consultants Training presentation: Selection of 164 Y Ukrainian JAN2015 11/9/2016 11/30/2016 Consultants for EBRD projects Training Presentation: “Energy days and public involvement in developing SEAP” 165 Y Ukrainian JAN2015 11/9/2016 11/30/2016 USAID Municipal Energy Reform Project in Ukraine Training Presentation: “The Main Provisions 166 Y Ukrainian JAN2015 11/4/2016 11/30/2016 of the Project Analysis” Sent for 167 SEAP Kryvyi Rih till 2025 N Ukrainian - COR clearance

168 SEAP Kyiv 2016-2020 N Ukrainian OCT2016 11/4/2016 11/30/2016

Sent for 169 SEAP Kyiv 2021-2030 N Ukrainian - COR clearance Translation of the Report on prefeasibility Sent for study on improvement of energy efficiency 170 N English - COR in 60 municipal buildings in Zaporizhzhia clearance City Summary Information on Catalogues of Sent for 171 Investment Projects for 15 MERP Partner N English - COR Cities clearance Sent for 172 SECAP of Izmail City until 2030 N Ukrainian - COR clearance Sent for Report: “Estimated resource potential of 173 N Ukrainian - COR biomass for biofuels in Odesa Oblast” clearance Sent for Sustainable Energy Action Plan until 2020 174 N Ukrainian - COR for Chernomorsk City (4 documents) clearance Sent for Sustainable Energy and Climate Action 175 N Ukrainian - COR Plan for Reni City until 2030 clearance The procedures for introducing incentives for institutions of the budgetary sphere, and Sent for 176 officials of local self-government bodies N Ukrainian - COR responsible for implementation of energy clearance efficiency measures Sent for Report: “Estimated resource potential of 177 N Ukrainian - COR biomass for biofuels in Odesa Oblast” clearance Sent for EA reports for 20 residential buildings for 178 N Ukrainian - COR the City of Ivano-Frankivsk (21 documents) clearance

154 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan DEC Date of # Name of document Status69 Language upload Date due issue date Presentation: "EU Policy on Energy Sent for 179 Efficiency and Renewable Energy Sources N Ukrainian - COR at the National and Regional Levels" clearance Presentation: "Regional Energy Planning. The sequence of actions for the Sent for 180 development of the Regional (Oblast) Plan N Ukrainian - COR for Sustainable Energy Development of the clearance Odessa Region” Presentation: "Regional Energy Planning. Sent for 181 EU Member States Experience in Regional N Ukrainian - COR Energy Planning” clearance Task 2.3 Training materials (Presentations) Sent for 182 on Energy Management (Odesa region and N Ukrainian - COR Eastern Ukrainian cities) clearance Sent for Sustainable Energy Action Plan for Bolhrad 183 N Ukrainian - COR City clearance Sustainable Energy Action Plan until 2020 Sent for 184 for Chornomorsk City with three annexes N Ukrainian - COR (in pdf and doc formats) clearance Sustainable energy action plan and climate Sent for 185 of Yuzhny City until 2030 with annexes (26 N Ukrainian - COR documents) clearance Sustainable energy action plan of united Sent for 186 territorial community of Balta till 2030 with N Ukrainian - COR annexes (11 documents) clearance Materials: "Basic training on energy management for city, district and oblast Sent for 187 administrations of Donetsk, Lugansk and N Ukrainian - COR Odessa oblasts" (two pdf documents, two clearance rar documents) Estimation of the resource potential of biomass for the production of biofuels in the Sent for 188 territories of Lugansk and Donetsk regions N Ukrainian - COR under the control of the Government of clearance Ukraine Evaluation of biomass resource potential in Sent for 189 Izmail, Bolgrad, Reni regions of Odesa N Ukrainian - COR Oblast clearance Evaluation of biomass resource potential in Sent for Bilgorod-Dnistrovsky, Ovidipolskiy, 190 N Ukrainian - COR Lymanskiy, and Baltic regions of Odesa clearance Oblast Sent for Biomass potential for energy use in Odesa 191 N Ukrainian - COR Oblast clearance Sent for Report: “Roadmap for the creation of an 192 N Ukrainian - COR energy management system in Odesa City” clearance

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 155 DEC Date of # Name of document Status69 Language upload Date due issue date Concept of improving the efficiency of Sent for public transport in Kramatorsk city (1 report 193 N Ukrainian - COR in doc format and three presentations in clearance pptx format) Sustainable Energy and Climate Action Sent for 194 Plan until 2030 for Kherson city (in pdf and N Ukrainian - COR doc formats) with SECAP Presentation clearance Sent for Catalogue of investment projects of 195 N Ukrainian - COR Kramatorsk City clearance Sent for Sustainable Energy and Climate Action 196 N Ukrainian - COR Plan until 2030 for Myrnohrad City clearance Investment Strategy for Sustainable Energy Sent for 197 and Climate Action Plan until 2030 for N Ukrainian - COR Myrnohrad City clearance Sent for Sustainable Energy and Climate Action 198 N Ukrainian - COR Plan until 2030 for Pokrovsk City clearance Sent for Sustainable Energy and Climate Action 199 N Ukrainian - COR Plan until 2030 for Rubizhne City clearance Audit report ‘Technically achievable Sent for 200 potential of solar energy in the region’ for N Ukrainian - COR Odesa Oblast clearance

Activity 3 documents

MERP Activity 3: NGO Selection and 201 Y English APR2014 11/7/2016 11/30/2016 Capacity Building Plan (SCBP) 202 MERP Activity 3: Capacity Building Report Y English SEPT2015 11/7/2016 11/30/2016

Activity 4 documents

Memo on Accomplishment of MERP Milestone 4.6. Build up working relations 203 with comprehensive and overarching Y English MAR2014 5/10/2014 5/30/2014 approach for LEDS (Low Emission Development Strategy) legal development Report: “Master catalogue of low emissions 204 Y English NOV2016 12/20/2016 12/30/2016 development (LEDS) policies & actions” Report: “National GHG Inventory 205 Y Ukrainian JUL2014 8/20/2014 8/30/2014 Enhancement Plan” Report: “Improving TIMES-Ukraine for 206 LEDS: Methodology for Adding Non-Energy Y English NOV2014 12/20/14 12/30/14 GHG Emissions Accounting” Draft Glossary on MRV Regulations for 207 Y Ukrainian Sept2015 10/20/15 10/30/15 GHG Emissions in Ukraine

156 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan DEC Date of # Name of document Status69 Language upload Date due issue date Preliminary Ukrainian draft of the Monitoring, Reporting and Verification 208 Y Ukrainian AUG2015 11/23/2016 11/30/2016 (MRV) Regulation – General guidance for installations Monitoring Plan Template developed for 209 Y Ukrainian DEC2015 11/23/2016 11/30/2016 Cement Sector Presentation: Monitoring and Reporting. 210 Methodology recommendations for Y Ukrainian Sept2015 11/4/2016 11/30/2016 Monitoring and Reporting GHG emissions Report: “Methodology for Calculation of 211 Y Ukrainian Nov2015 11/14/2016 11/30/2016 CO2 for Cement Installations” Report: “Scenarios of low emission 212 development of Ukrainian energy sector for Y Ukrainian JUL2015 11/4/2016 11/30/2016 2030 and beyond” Presentation: Expected Intended Nationally 213 Determined Contribution of Ukraine into Y Ukrainian Sept2015 11/4/2016 11/30/2016 New Climate Change Agreement Draft Resolution of the Cabinet of Ministers of Ukraine “On Approval of Intended 214 Nationally Determined Contribution of Y Ukrainian Sept2015 11/4/2016 11/30/2016 Ukraine into New Climate Change Agreement” Report: “Forecasting of GHG emissions in 215 Y Ukrainian JUL2015 11/4/2016 11/30/2016 for 2030 and beyond” Ukraine’s Greenhouse Gas Inventory 1990- 2014 Annual National Inventory Report for 216 Submission under the United Nations Y English JUL2016 11/23/2016 11/30/2016 Framework Convention on Climate Change and the Kyoto Protocol Report: “Development of the Detailed (Expanded) Baseline Scenario for 217 Y Ukrainian APR2015 11/14/2016 11/30/2016 Dynamics of Greenhouse Gas Emissions in Ukraine through 2050” Presentation: Energy Strategic Planning In 218 Ukraine: Energy-Economy-Environmental Y English MAR2016 11/4/2016 11/30/2016 optimization TIMES-Ukraine model Presentation: Low Emission Development 219 Strategies Training Series, Module 1: LEDS Y English JUN2015 11/4/2016 11/30/2016 Action Plan Overview Presentation: Low Emission Development Strategies Training Series, Module 2: LEDS 220 Y English JUN2015 11/4/2016 11/30/2016 Action Planning Startup – Preparation and Organization Presentation: Low Emission Development Strategies Training Series, Module 3: LEDS 221 Y English JUN2015 11/4/2016 11/30/2016 Action Planning Startup - Preliminary Assessment Presentation: Low Emission Development 222 Strategies Training Series, Module 4: LEDS Y English JUN2015 11/4/2016 11/30/2016 Policy Options Selection & Design

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 157 DEC Date of # Name of document Status69 Language upload Date due issue date Presentation: Low Emission Development 223 Strategies Training Series, Module 5: Y English JUN2015 11/4/2016 11/30/2016 Impact Analysis of LEDS Policy Options Presentation: Low Emission Development Strategies Training Series, Module 6: LEDS 224 Y English JUN2015 11/4/2016 11/30/2016 Plan Final Report, Transmittal and Implementation Presentation: Low Emissions Development Strategies (LEDS) Training Series, LEDS 225 Y English SEPT2016 11/4/2016 11/30/2016 Policy Option Design, Technical Webinar, September 2016 Sent for Analytical Report on results and lessons on 226 N Ukrainian - COR MRV trainings clearance Sent for Methodology of CO2 emissions calculations 227 N Ukrainian - COR for stationery fuel combustion clearance Monitoring Reports Verification Guidelines, Sent for 228 in accordance with EU Commission N Ukrainian - COR Regulation № 600/2012 clearance Sent for Draft Proposal on legislation elements of 229 N Ukrainian - COR MRV system establishment in Ukraine clearance Legislation Analysis of Ecological Taxes Sent for 230 Payment and Analysis of State and Local N Ukrainian - COR Budgets on Using of Ecological Taxes clearance Ukraine Cabinet of Ministers Decree: Action Plan on Implementation of Concept of 231 Y English NOV2017 4/20/2018 4/5/2018 Implementation of State Policy in Climate Change for the period until 2030 Ukraine Cabinet of Ministers Decree: 232 Concept of Implementation of State Policy Y English NOV2017 4/20/2018 4/5/2018 in Climate Change for the period until 2030 Sent for Ukraine Energy Sector Scenarios for draft 233 N English - COR Ukraine Energy Strategy until 2035 clearance LEDS Policies and Measures modeling Sent for 234 scenarios social-economic impact N Ukrainian - COR assessment clearance Ukraine 2050 Low Emission Development 235 Y English NOV2017 4/20/2018 4/5/2018 Strategy

158 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan

Annex 11. MERP Partner Cities Profiles Bahmut ...... 161 Balta ...... 162 Bilhorod-Dnistrovskyi ...... 163 Bolhrad ...... 165 Chernihiv ...... 166 Chornomorsk ...... 167 Dnipro ...... 168 Dobropillya ...... 171 Ivano-Frankivsk ...... 172 Izmail ...... 175 Kamianets-Podilsky ...... 176 Kharkiv ...... 177 Kherson ...... 178 Khmelnytskyi ...... 180 Kramatorsk ...... 182 Kremenchuk ...... 184 Kropyvnytskyi ...... 185 Kryvyi Rih ...... 186 Kyiv ...... 188 Lutsk ...... 190 Lviv ...... 191 Luhansk Oblast ...... 194 Mariupol ...... 195 Myrnohrad ...... 197 Odesa ...... 198 Odesa Oblast ...... 200 Pavlohrad ...... 201 Pokrovsk ...... 203 Reni ...... 204 Rivne ...... 205 Rubizhne ...... 206 Severodonetsk ...... 207

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 159

Sloviansk ...... 208 Sumy ...... 209 Teplodar ...... 211 Ternopil ...... 211 Vinnytsia ...... 214 Yuzhne ...... 216 Zaporizhzhia ...... 217

160 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan

Bahmut

Table 11-1. MERP Partner City Profile (Bahmut)

City Bahmut (Donetsk Oblast)

Tetiana Tatarynova, Head, Department of Energy Management and Ecology under Directorate of Economic Development, Bahmut City Council Energy Manager and department Contacts: (0627) 44-07-95; [email protected]; [email protected]; [email protected] Energy Audits Municipal Energy Systems Public buildings 14 Residential buildings 5 Energy Planning SEAP or SECAP Development No (Yes/No) Project Proposal 1 Modernization of district heating system Project Area District Heating MERP conducted in-depth EA of district heating system. The purpose of the project is to gain knowledge of the district heating system in Bahmut, namely:  Collection and analysis of technical, operational and financial documentation that concerns the technological and organizational structure of the enterprise, composition the main characteristics and operating modes of equipment and networks, consumption of fuel; Project Description  Definition of the cost structure for the provision of heat supply services, structure of expenses for production activity, estimation of volumes and dynamics consumption of fuel;  Analysis of the nature and patterns of consumption of fuel by individual objects heating system and/or enterprises in general using mathematical apparatus for regression analysis. It is expected that the city will use IFI’s resources to implement the project. Project Value, approx. “000” USD 25,000 Annual savings, approx. “000” USD Annual energy savings 28,483,870 m3 of natural gas Annual CO2 emissions reduction, 80,013 “000” tons Demonstration Projects Development of design and estimate documentation for the Complex Thermal Project Proposal 1 Modernization of Kindergarten Project Area Public Buildings Development of design and estimate documentation for the project Project Description Reconstruction (Complex Thermal Modernization) of Kindergarten # 52 “Raiduha” located at 166, Sybirtseva Street, Bakhmut Project Value, approx. “000” USD 1,260 Annual savings, approx. “000” USD 17.88 Annual energy savings 373,871 kW/h Annual CO2 emissions reduction, 0.147 “000” tons

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 161

Table 11-1. MERP Partner City Profile (Bahmut)

City Bahmut (Donetsk Oblast)

Energy Management Energy Management Support EM department created and functional Energy Manager Certification Yes Residential Energy Efficiency The HOA Advisory Resource Center in Bakhmut was opened on 20 August 2017. Participants of its work are the public activists and representatives of the municipal authorities. There is a section “Bakhmut HOA’s” on the official website of the Bakhmut City Council, and Facebook page https://www.facebook.com/bahmut.rcosbb Also, HOA Advisory Center for convenience of communication with the condominiums, a Viber group was created – “Bakhmut HOAs.” As of 30 September 2017, 141 HOA has been established in the city. HOA RC address: Bakhmut, 8, Soborna Street, 1st floor. Contact person – Oksana Sokolovska, tel.: (0627) 44-58-03, (0627) 44-04-81

Balta

Table 11-2. MERP Partner City Profile (Balta)

City Balta (Odesa Oblast)

Oleksii Mazur, Chief Specialist, Department of Housing and Communal Services, and Municipal Improvements, Balta City Council Energy Manager and department Contacts: (04866) 2-23-79; [email protected]; [email protected]; [email protected]; EAs Municipal Energy Systems Under SECAP development Public buildings 8 Residential buildings 5 Energy Planning SEAP or SECAP Development Yes (Yes/No) SEAP or SECAP summary Period covered Until 2030 Public Buildings, Residential Buildings, Municipal Public Lighting, Transport, Sectors covered Water Supply and Wastewater Value of investment through 2020, 8,961 approx. “000” USD Annual CO2 emissions reduction 5.114 through 2020, approx. “000” tons Approval Date October 28, 2017 Demonstration Projects Complex modernization of the building of Bendzarivska Secondary School Project Proposal 1 Project Area Public Buildings

162 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan

Table 11-2. MERP Partner City Profile (Balta)

City Balta (Odesa Oblast)

Complex modernization of the building of Bendzarivska T.P. Bondar Secondary School of Balta City Council, Odesa Oblast, with installation of ventilation systems with energy recuperation, automated control of heat consumption, Project Description energy saving lighting with solar batteries, door replacement and switching heating system from coal to electricity, with deep heat insulation of the building envelope and attic Project Value, approx. “000” USD 200 Annual savings, approx. “000” USD 23.49 Annual energy savings 1 099 388 kWh Annual CO2 emissions reduction, 0.39 approx. “000” tons Energy Management EM function introduced–specialists in several departments of city administration Energy Management Support perform EM functions. Energy Manager Certification No

Bilhorod-Dnistrovskyi

Table 11-3. MERP Partner City Profile (Bilhorod-Dnistrovskyi)

City Bilhorod-Dnistrovskyi (Odesa Oblast)

Olga Tserkovna, Chief Specialist, Energy Manager at Department of Transport, Traffic Management, Communications Systems, and Energy Saving, Bilhorod- Energy Manager and department Dnistrovskyi City Council Contacts: (04849) 2-24-44; [email protected]; [email protected]; EAs Municipal Energy Systems Under SECAP development Public buildings 10 Residential buildings 5 Energy Planning SEAP or SECAP Development Yes (Yes/No) SEAP or SECAP summary Period covered until 2030 Public Buildings, Residential Buildings, Municipal Public Lighting, Transport, Sectors covered Water Supply and Wastewater, District Heating, Solid Waste Value of investment through 2020, 104,000 approx. “000” USD Annual CO2 emissions reduction 62.04 through 2020, approx. “000” tons Approval Date April 20, 2017 Invested under SEAP (2015-2017 CY) - approx. “000” USD Projects Development

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 163

Table 11-3. MERP Partner City Profile (Bilhorod-Dnistrovskyi)

City Bilhorod-Dnistrovskyi (Odesa Oblast)

Investment project catalogue / Investment strategy under SEAP until 2030 of Bilhorod-Dnystrovskyi City Investment Program # of projects 58 projects value, approx. “000” USD 104,000 CO2 emissions reduction or energy 62.04 savings, “000” tons Project Proposal 1 Modernization of district heating system Project Area District Heating MERP conducted in-depth EA of district heating system, and compiled a list of opportunities for improving energy efficiency of the enterprise, which will be used in the elaboration of a preliminary feasibility study for the project, "Increase of the energy efficiency of the heating system of the Communal Enterprise Bilhorod-Dnistrovskteploenergo." During the energy survey, the following work was carried out:  Collection and analysis of technical, operational and financial documentation related to the technological and organizational structure of the city's district heating system, the composition, main characteristics and operating modes of the equipment and networks, and the consumption of fuel and energy resources (FER).  Determination of the structure of the cost of production, transportation and distribution of heat energy, estimation of volumes and dynamics of changes in consumption of PE.  Carrying out an instrumental survey of the actual operating conditions of Project Description the city's heat supply system.  Analysis of the results of the instrumental survey of the modes of operation of the city's district heating system.  Analysis of the technical and economic efficiency of the existing district heating system with the definition of actual volumes, sources and causes of unreasonable losses of fuel and electricity, as well as related financial losses.  Development and feasibility study of measures to improve the energy efficiency of the heat supply system.  Preparation and presentation of a technical report based on the results of the implementation of the entire complex of works on energy inspection of the district heating system in the city Bilhorod-Dnistrovskyi.  The Project value is ~UAH 127.8 million.  CO₂ emissions will be reduced as a result of the project. Project Value, approx. “000” USD 4,930 Annual savings, approx. “000” USD 862.538 Annual energy savings 2,490,000 kWh and of 2,420,800 m3 of natural gas Annual CO2 emissions reduction, 7.364 “000” tons Energy Management Energy Management Support EM function introduced Energy Manager Certification No

164 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan

Bolhrad

Table 11-4. MERP Partner City Profile (Bolhrad)

City Bolhrad (Odesa Oblast)

Vitalii Kuruch, Chief Investment Specialist, Bolhrad City Council Energy Manager and department Contacts: (04846) 4-21-14, [email protected]; [email protected]; EAs Municipal Energy Systems Under SECAP development Public buildings 9 Residential buildings 3 Energy Planning SEAP or SECAP Development Yes (Yes/No) SEAP or SECAP summary Period covered Until 2030 Public Buildings, Residential Buildings, Municipal Public Lighting, Transport, Sectors covered Water Supply and Wastewater, District Heating, Solid Waste Value of investment through 2020, 24,001 approx. “000” USD Annual CO2 emissions reduction 113.8 through 2020, approx. “000” tons Approval Date November 22, 2017 Demonstration Projects Development of design and estimate documentation for the Comprehensive Project Proposal 1 Thermal Modernization of Kindergarten Project Area Public Buildings Development of design and estimate documentation for the project Comprehensive Thermal Modernization of Kindergarten # 5 “Zhuravlyk” of Bolhrad City Council in Bolhrad, Odesa Oblast, with Installation of Solid Fuel Project Description Boiler House, Introduction of HWS System with Solar Collectors and Local Supply and Exhaust Ventilation with Recuperation, Reconstruction of Heating System, Replacement of Old Wooden Windows and Wall Insulation Project Value, approx. “000” USD 240 Annual savings, approx. “000” USD 24.785 Annual energy savings 531 856 kWh Annual CO2 emissions reduction, 0.178 “000” tons Energy Management Energy Management Support Yes Energy Manager Certification Yes

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 165

Chernihiv

Table 11-5. MERP Partner City Profile (Chernihiv)

City Chernihiv (Chernihiv Oblast)

Roman Movchan, Head of Sub-Department of Energy Saving, Directorate for Energy Manager and department Economic Development, Chernihiv City Council Contacts: (0462)77-48-56; [email protected]; [email protected] EAs Municipal Energy Systems Under SEAP preparation Public buildings 73 Residential buildings - Energy Planning SEAP or SECAP Development Yes (Yes/No) SEAP or SECAP summary Period covered 2015-2023 Public Buildings, Residential Buildings, Municipal Public Lighting, Transport, Sectors covered Water Supply and Wastewater, Energy Production, Solid Waste Value of investment through 2020, 32,773 approx. “000” USD Annual CO2 emissions reduction 297 through 2020, approx. “000” tons Approval Date June 4, 2015 Invested under SEAP (2015-2017 CY) 12,057 approx. “000” USD Projects Development Investment project catalogue / Catalogue of Investment Projects through 2023 Investment Program # of projects 72 projects value, approx. “000” USD 53,269 CO2 emissions reduction or energy 315.3 savings, “000” tons Project Proposal 1 Improvement of energy efficiency of public electric transport Project Area Transport The Project prepared a prefeasibility study (based on EIB requirements) to increase efficiency of the public transportation system. The study, including relevant technical, economic, financial, and ecological analysis, was conducted based on the city’s request to start implementation of the EIB “Municipal Public Project Description Transport of Ukraine project”. Based on USAID Project support, the city mobilized EUR 8 million (~USD 10 million) to procure 40 new trolleybuses and improve energy efficiency of the electric transportation system. The project will also result in reduced CO₂ emissions. Project Value, approx. “000” USD 10,000 Annual savings, approx. “000” USD 147 Annual energy savings 1,626,000 kWh Annual CO2 emissions reduction, 1.384 “000” tons

166 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan

Table 11-5. MERP Partner City Profile (Chernihiv)

City Chernihiv (Chernihiv Oblast)

Project Proposal 2 Support of energy efficiency measures in public buildings of the city Project Area Public Buildings

The Project prepared prefeasibility study to conduct thermomodernization of public buildings (schools, kindergartens, and medical facilities) using EIB Project Description funding under “Municipal Infrastructure Development Program”. The preparation included EA of over 70 public buildings. Based on USAID Project support, the city mobilized ~USD 8.5 million from EIB.

Project Value, approx. “000” USD 8,500 Annual savings, approx. “000” USD 848 Annual energy savings 15,394,400 kWh or equivalent of 1,458,258 m3 of natural gas Annual CO2 emissions reduction, 4.83 “000” tons Energy Management Energy Management Support Improved EMS documentation Energy Manager Certification Yes

Chornomorsk

Table 11-6. MERP Partner City Profile (Chornomorsk)

City Chornomorsk (Odesa Oblast)

Nataliia Hencheva, Head of Economic Department, Energy Manager and department Chornomorsk City Council Contacts: (04868) 6-00-34; [email protected]; EAs Municipal Energy Systems Under SECAP development Public buildings 11 Residential buildings 5 Energy Planning SEAP or SECAP Development (Yes/No) Yes SEAP or SECAP summary Period covered Until 2030 Public Buildings, Residential Buildings, Municipal Public Sectors covered Lighting, Transport, Water Supply and Wastewater, District Heating, Solid Waste Approval Date Not approved Invested under SEAP (2015-2017 CY) approx. “000” - USD Energy Management

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 167

Table 11-6. MERP Partner City Profile (Chornomorsk)

City Chornomorsk (Odesa Oblast)

EM function introduced (requires improvement) – specialists in Energy Management Support several departments of city administration perform EM functions Energy Manager Certification -

Dnipro

Table 11-7. MERP Partner City Profile (Dnipro)

City Dnipro (Dnipropetrovska Oblast)

Dmytro Semennikov, Director, Department for Energy Efficient Technology, Dnipro City Council Energy Manager and department Contacts: (056) 791-11-85; (056) 791 11 95; [email protected]; [email protected]; [email protected] EAs Municipal Energy Systems Under SEAP preparation Public buildings - Residential buildings - Energy Planning SEAP or SECAP Development Yes (Yes/No) SEAP or SECAP summary Period covered 2015-2025 Public Buildings, Residential Buildings, Tertiary (Non-Municipal) Buildings, Sectors covered Facilities Municipal Public Lighting, Transport, Water Supply and Wastewater, Energy Production, Solid Waste Value of investment through 2020, 292,237 approx. “000” USD

Annual CO2 emissions reduction 341.34 through 2020, approx. “000” tons Approval Date February 24, 2017 Invested under SEAP (2015-2017 CY) 9,208 approx. “000” USD Projects Development Investment project catalogue / Catalogue of Investment Projects through 2025 Investment Program # of projects 23 projects value, approx. “000” USD 185,217

168 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan

Table 11-7. MERP Partner City Profile (Dnipro)

City Dnipro (Dnipropetrovska Oblast)

CO2 emissions reduction or energy 198.83 savings, “000” tons Assistance in natural gas replacement with biomass in heat energy Project Proposal 1 production Project Area District Heating Assistance in natural gas replacement with biomass in heat energy production. Project Description The Project prepared a prefeasibility study to mobilize ~EUR 612,894 from NEFCO and local budget. Project Value, approx. “000” USD 736 Step-by-step rehabilitation and modernization of heat supply system from CHP Project Proposal 2 "Pivdenmash". Project Area District Heating

USAID project experts conducted EAs at "Yuzhmash" and "Teplotrans" with analysis of the baseline data on energy use. Based on the analysis, measures have been developed to improve the energy efficiency of the heating system. The preliminary feasibility study of the project is based on the measures proposed by the experts. Proposed measures include:

 Introduction of energy management at "Yuzhmash" and "Teplotrans";  Modernization of thermal distribution points (TDP);  Modernization of thermal inputs of buildings;  Installation of a new pumping equipment of CHP;  Automation of combustion regimes in CHP boilers; Project Description The proposed measures were included in the priority investment program for the district heating system from PJSC "Pivdenmash" based on the EA performed and the analysis of the efficiency of the use of fuel. In order to analyze the viability of financing the Priority Investment Program, the following studies conducted:

 analysis of existing situation and existing opportunities;  strategic long-term investment program plan;  program of priority investments;  economic efficiency of investments. Based on MERP support, the Enterprise need to mobilize ~EUR 2,517,490 from local budget. Project Value, approx. “000” USD 2,830 Annual savings, approx. “000” USD 2,112 Annual energy savings 36,495 megawatt hours (MWh)

Annual CO2 emissions reduction, 15.083 “000” tons Implementation of energy management system in Municipal Enterprise Project Proposal 3 "KOMENERHOSERVIS" Project Area Energy Management

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 169

Table 11-7. MERP Partner City Profile (Dnipro)

City Dnipro (Dnipropetrovska Oblast)

Providing technical assistance to the Municipal Enterprise "KOMENERHOSERVIS" in the implementation of the energy management system in accordance with ISO-50001-2014. USAID project experts conducted an analysis of the use of energy resources of the enterprise, developed the procedure for the construction and operation of the energy management system, and prepared the following priority documents that might be useful in implementing the energy management system in Project Description accordance with ISO-50001-2014:  Project of the energy policy of the enterprise  The boundaries of the functioning of the energy management system  Composition of the energy management team  Roles and responsibilities of the energy management team and other personnel of the enterprise  Energy indicators of the use of heat and electricity, which will determine the effectiveness of the energy management system. Project Value, approx. “000” USD 4,810 Annual savings, approx. “000” USD 1,102 Annual energy savings 64,452 MWh of heat energy and of 163 MWh of electricity

Annual CO2 emissions reduction, 21.8 “000” tons Demonstration Projects Development of design and estimate documentation for the project on Project Proposal 1 reconstruction of the artificial electrical lighting system Project Area Residential Buildings Development of design and estimate for the project on reconstruction of the artificial electrical lighting system in the staircase of 9-story 108-apartment Project Description building and adjacent territory with use of photovoltaic solar cells at 4A, Krasnopilska Street in Dnipro, HOA “4A, Krasnopilska Street” Project Value, approx. “000” USD 0.01 Energy Management EMS trainings and package of documents were provided, EMS concept Energy Management Support approved by the city council. Energy Manager Certification Yes Residential Energy Efficiency

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Table 11-7. MERP Partner City Profile (Dnipro)

City Dnipro (Dnipropetrovska Oblast)

In Dnipro, the HOA Resource Advisory Center was created on the basis of NGO “Modern House” Association of HOA and Housing and Construction Cooperatives Development. In the period of 2015- 2017, over 3,100 initiative groups and residents received consultations on establishment of the HOAs. The Resource Center held 253 informational meetings with the co-owners of multiapartment buildings on HOA benefits. HOA Advisory Center The Resource Center consultants conducted 80 training events in Dnipro and in Dnipropetrovsk oblast cities, and participated in the site events. Every Saturday, the Resource Center hosts workshops for initiative groups and HOA chairmen to address important issues related to operation and establishment of the HOA. As of September 30, 2017, a total of 930 HOAs operate in Dnipro.

Dobropillya

Table 11-8. MERP Partner City Profile (Dobropillya)

City Dobropillya (Donetsk Oblast)

Oleksii Kormiltsev, First Deputy Mayor of Dobropillya for Activities of City Council’s Executive Bodies Energy Manager and department Contacts: (06277) 2-78-81; [email protected]; [email protected]; EAs Municipal Energy Systems EA of district heating system Public buildings 5 Residential buildings 9 Energy Planning SEAP or SECAP Development No (Yes/No) Project Proposal 1 Modernization of district heating system Project Area District Heating The project conducted in-depth EA of district heating system with instrumental survey of energy consumption. Two meetings were held with the leadership of the City of Dobropillya in the person of the chairman and his deputies, as well as the representative of the company DTEK, which provides financial and Project Description technical assistance to the company, which discussed the preliminary findings of the energy auditors regarding the further development of the heat supply system. Based on USAID Project support, could mobilize UAH 151.8 million, or ~USD 5.86 million, from IFI’s. Project Value, approx. “000” USD 5,860 Annual savings, approx. “000” USD 2,219 Annual energy savings 29,904,000 t of coal and of 6,558,600 kWh of electricity Annual CO2 emissions reduction, 68 “000” tons Demonstration Projects

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 171

Table 11-8. MERP Partner City Profile (Dobropillya)

City Dobropillya (Donetsk Oblast)

Development of design and estimate documentation for the Complex Thermal Project Proposal 1 Modernization of Kindergarten Project Area Public Buildings Development of design and estimate for the project “Reconstruction (Complex Project Description Thermal Modernization) of Kindergarten # 35 “Kazka” located at 18a, Sonyachniy residential area, Dobropillya Project Value, approx. “000” USD 0.27 Residential Energy Efficiency The HOA Advisory Resource Center in Dobropillya was opened on 29 August 2017. HOA RC Work Plan for 2018 was approved. The RC specialists created a Facebook page, Dobropillya HOA Resource Center. As of 30 September 2017, there are in the city: 64 HOAs, 3 HOA associations, HOA Advisory Center public association “Dobropillya Territorial Association of Housing Owners “NADIIA”, on the basis of which the RC was opened. RC address: Dobropillya, 83,Street, office 111. person – Valentyna Orlova, mob.: (050)155-41-12

Ivano-Frankivsk

Table 11-9. MERP Partner City Profile (Ivano-Frankivsk)

City Ivano-Frankivsk (Ivano-Frankivsk Oblast)

Olena Ivaniv, Director, Directorate for Attracting Investments, Department of Housing and Utilities Policies and Municipal Improvements, Ivano-Frankivsk Energy Manager and department City Council Contacts: (0342)556525; [email protected]; [email protected]; [email protected] EAs Municipal Energy Systems under SEAP preparation Public buildings 50 buildings Residential buildings 20 buildings Energy Planning SEAP or SECAP Development Yes (Yes/No) SEAP or SECAP summary Period covered 2015 - 2020 Public Buildings, Residential Buildings, Municipal Public Lighting, Transport, Sectors covered Water Supply and Wastewater, Energy Production, Solid Waste Value of investment through 2020, 90,372 approx. “000” USD Annual CO2 emissions reduction 114.8 through 2020, approx. “000” tons Approval Date July 28, 2015

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Table 11-9. MERP Partner City Profile (Ivano-Frankivsk)

City Ivano-Frankivsk (Ivano-Frankivsk Oblast)

Invested under SEAP (2015-2017 33,937 CY), approx. “000” USD Projects Development Investment project catalogue / Catalogue of Investment Projects through 2020 Investment Program # of projects 25 projects value, approx. “000” USD 42,189 CO2 emissions reduction or energy 46.34 savings, “000” tons Improvement of energy efficiency of public buildings in Ivano-Frankivsk Project Proposal 1 (stage 1) Project Area Public Buildings In 2014, MERP conducted investment-grade audits of 10 public buildings, which allowed the city to secure loan and Eastern Europe Energy Efficiency Project Description and Environmental Partnership (E5P) grant funding in the amount of EUR 1.57 million Project Value, approx. “000” USD 1,800 Annual savings, approx. “000” USD 173 Annual energy savings 3033 Mw/h Annual CO2 emissions reduction, 0.703 “000” tons Creation of a degasification system at the solid waste landfill in Rybne Project Proposal 2 village and energy generation from landfill gas Project Area Solid Waste Feasibility study and legal documentation developed by MERP allowed the municipality to conduct competitive selection of a private investor to start implementing the project, “Creation of a degasification system at the solid waste landfill in Rybne village and energy generation from landfill gas.” The Project Description project envisions the installation of a gas-fired electricity generation unit (up to 1 MW) which would permit the sale of electricity using the “green tariff.” The estimated private investments are ~UAH 30 million. This project will secure the landfill and will improve environmental conditions in the region. Project Value, approx. “000” USD 1,100 Annual CO2 emissions reduction, Annual CO2 emissions reductions are estimated at 75-80 thousand tons. “000” tons Project Proposal 3 Solid waste management program Project Area Solid Waste MERP developed a solid waste management program for the city, among other measures it included waste sorting and refuse-derived fuel production (RDF) production measures. The city of Ivano-Frankivsk started working with EBRD to Project Description introduce comprehensive solutions in this area, including sorting and refuse- derived fuel production. The approximate value of proposed measures is UAH 61.5 million. Project Value, approx. “000” USD 2,800 Improved energy efficiency of public buildings of Ivano-Frankivsk Project Proposal 4 (stage 2)

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 173

Table 11-9. MERP Partner City Profile (Ivano-Frankivsk)

City Ivano-Frankivsk (Ivano-Frankivsk Oblast)

Project Area Public Buildings MERP conducted EAs prepared feasibility study for the thermal modernization of public buildings in Ivano-Frankivsk that allows the city to attract both loan and grant funds for implementing energy efficiency measures in public buildings. According to the estimates, the total cost of the proposed energy Project Description efficiency measures is EUR 6,803,400, of which: the amount of the loan from NEFCO is EUR 3,997.4; the amount of the grant from the E5P Fund is EUR 2,316,000 (taking into account the possibility of value-added tax exemption); and co-financing from the municipal budget is EUR 490,000. Project Value, approx. “000” USD 8,606.80 Annual savings, approx. “000” USD 525 Annual energy savings 1,178,980 cubic meters of natural gas; Annual CO2 emissions reduction, 3.84 “000” tons Project Proposal 5 Energy efficiency rolling stock renovation and networks modernization Project Area Transport In cooperation with the city and EBRD, MERP prepared feasibility study “Renovation of the Trolley-Bus Fleet in Ivano-Frankivsk”. The city of Ivano- Project Description Frankivsk secured loan and grant funding in the amount of EUR 9.5 million to modernize the electric transportation system, including procurement of 35 new, more efficient trolley buses. Project Value, approx. “000” USD 11,200 Annual savings, approx. “000” USD 160 Annual energy savings 915,000 kWh or equivalent of 87,393 cubic meters of natural gas Annual CO2 emissions reduction, 1.07 “000” tons Support for implementation of energy efficiency measures in residential Project Proposal 6 buildings Project Area Residential buildings MERP conducted EAs and prepared a feasibility study for the thermomodernization of 20 residential buildings in Ivano-Frankivsk. It is Project Description anticipated that the proposed energy efficiency measures will be funded by the city, residents, and potentially through the use of commercial banks and energy efficiency fund resources. Project Value, approx. “000” USD 7,500 Energy Management Energy management system established, trainings provided and package of Energy Management Support documents for EMS developed. Energy Manager Certification Yes Private Sector Participation Project 2 “Creation of a degasification system at the solid waste landfill in ESCO, PPP and other Rybne village and energy generation from landfill gas” is implemented on PPP principles.

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Izmail

Table 11-10. MERP Partner City Profile (Izmail)

City Izmail (Odeas Oblast)

Viacheslav Kroitoru, Energy Manager, Izmail Bureau for Investment Facilitation Municipal Institution, Izmail City Council Energy Manager and department Contacts: (048) 417-78-50; [email protected]; [email protected]; EAs Municipal Energy Systems Under SECAP development Public buildings 8 Residential buildings 8 Energy Planning SEAP or SECAP Development Yes (Yes/No) SEAP or SECAP summary Period covered Until 2030 Public Buildings, Residential Buildings, Municipal Public Lighting, Transport, Sectors covered Water Supply and Wastewater, District Heating, Solid Waste Value of investment through 2020, 109,339 approx. “000” USD Annual CO2 emissions reduction 5.725 through 2020, approx. “000” tons Approval Date March 31, 2017 Projects Development Investment project catalogue / Investment strategies under SECAP Investment Program # of projects 62 projects value, approx. “000” USD 109,339 CO2 emissions reduction or energy 5.725 savings, “000” tons Demonstration Projects Development of design and estimate documentation for the Complex Thermal Project Proposal 1 Modernization of Kindergarten

Project Area Public Buildings

Project “Modernization of the building of kindergarten “’Teremok’”, including: Project Description installation of helio-collectors, installation of individual heat substation, windows replacement, modernization of lighting system and kitchen equipment Project Value, approx. “000” USD 0.17 Annual savings, approx. “000” USD 23.9 Annual energy savings 488 MWh

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 175

Table 11-10. MERP Partner City Profile (Izmail)

City Izmail (Odeas Oblast)

Annual CO2 emissions reduction, 0.17 “000” tons Energy Management Energy Management Support EM function introduced in a communal enterprise Energy Manager Certification -

Kamianets-Podilsky

Table 11-11. MERP Partner City Profile (Kamianets-Podilsky)

City Kamianets-Podilsky (Khmelnytskyi Oblast)

Yurii Liahutko, Advisor to Mayor of Kamianets-Podilskyi Energy Manager and department Contacts: (03849) 5-16-50; [email protected]; [email protected] EAs Municipal Energy Systems - Public buildings - Residential buildings - Energy Planning SEAP or SECAP Development No (Yes/No) Project Proposal 1 Degasification and Landfill Gas Utilization Project Area Solid Waste USAID Project assistance covered preliminary assessment of the landfill’s capacity for generation and utilization of the landfill gas, preparation of a prefeasibility study, and assistance in searching for private investors. The city council identified this project as priority among the actions envisioned under the solid waste management program70 developed with USAID Project support. Project Description The project implementation started in 2018 on PPP principles. The project envisions the installation of a gas-fired electricity generation unit (up to 1 MW) which would permit the sale of electricity using the “green tariff.” The estimated private investments are ~UAH 30 million (~USD 1.1 million). This project will secure the landfill and will improve environmental conditions in the region. Annual CO2 emissions reductions are estimated at 75-80 thousand tons. Project Value, approx. “000” USD 1,100 Annual savings, approx. “000” USD Annual energy savings Annual CO2 emissions reduction, 75-80 “000” tons

70 The Project developed a program on solid waste management for the city of Kamianets-Podilskyi. The program was approved by the city council and envisions UAH 55.5 million funding (~USD 2 million).

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Table 11-11. MERP Partner City Profile (Kamianets-Podilsky)

City Kamianets-Podilsky (Khmelnytskyi Oblast)

Demonstration Projects Development of design and estimate documentation for the project on Project Proposal 1 reconstruction of the artificial electrical lighting system Project Area Development of design and estimate documentation for the project on reconstruction of the artificial electrical lighting system in the staircase of 5- Project Description story 30-apartment building and adjacent territory with use of photovoltaic solar cells at 2A, Lermontova Street in Kamianets-Podilsky, condominium “Lermontova-2” Project Value, approx. “000” USD 0.01

Private Sector Participation

Project 1 “Degasification and Landfill Gas Utilization” is implemented on PPP ESCO, PPP and other principles.

Kharkiv

Table 11-12. MERP Partner City Profile (Kharkiv)

City Kharkiv (Kharkiv Oblast)

Kostiantyn Demenkov, Deputy Head of Sub-Department for Support of International Projects, Department for International Cooperation, Kharkiv City Energy Manager and department Council Contacts: (057) 760 74 46 [email protected]; Olha Demyanenko - (057) 7607442; [email protected] EAs Municipal Energy Systems - Public buildings 15 Residential buildings 5 Energy Planning SEAP or SECAP Development No (Yes/No) Complex thermomodernization of 51 public buildings (educational and health Project Proposal 1 care facilities) in Kharkiv Project Area Public Buildings MERP conducted EAs and prepared prefeasibility study for complex thermomodernization of 51 public buildings (educational and health care facilities) in Kharkiv using IFI resources. The project proposal covers four Project Description alternative options (packages of energy efficiency measures) valued at USD 3– 16 million (most feasible option is valued at USD 7.25 million). The project proposal was presented to the city in December 2017. It is expected that the city will use its own and IFI’s resources to implement the project.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 177

Table 11-12. MERP Partner City Profile (Kharkiv)

City Kharkiv (Kharkiv Oblast)

Project Value, approx. “000” USD 7,250

Kherson

Table 11-13. MERP Partner City Profile (Kherson)

City Kherson (Kherson Oblast)

Larysa Leonova, Director of Kherson City Energy Service Company Contacts: Energy Manager and department (0552) 456-44; [email protected]; [email protected] EAs Municipal Energy Systems Under SEAP preparation Public buildings - Residential buildings - Energy Planning SEAP or SECAP Development Yes (Yes/No) SEAP or SECAP summary Period covered 2015 - 2030 Municipal Buildings, Tertiary Buildings, Municipal Public Lighting, Transport, Sectors covered Water Supply and Wastewater, Energy Production, Solid Waste Value of investment through 2020, 44,610.42 approx. “000” USD Annual CO2 emissions reduction 95 through 2020, approx. “000” tons Approval Date February 20, 2015 Invested under SEAP (2015-2017), 2,427.19 approx. “000” USD Projects Development Investment project catalogue / Registry of Investment Projects for 2015-2030 Investment Program # of projects 16 projects value, approx. “000” USD 261,738.46 CO2 emissions reduction or energy 350.70 savings, approx. “000” tons Project Proposal 1 Improved energy efficiency of district heating sector in Kherson Project Area District Heating

178 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan

Table 11-13. MERP Partner City Profile (Kherson)

City Kherson (Kherson Oblast)

Based on the agreed scope of assistance, MERP supported local PIU of WB District Heating energy efficiency project in Kherson. The project experts from OptimEnergo conducted detailed EAs of boiler houses suggested by the WB investment program to specify key technical parameters of new installations and equipment. The project experts reviewed central heating units and their interconnection with the heating network and buildings to better specify technical design parameters. Collected data from the detailed EA will be a basis for technical specifications needed at the design and procurement phases. In addition, project experts conducted a training seminar for staff of the Project Description local PIU covering the topic of “Selection of consultants and procurement of goods, works, and non-consulting services in accordance with WB Procurement Guidelines.” The Project value is USD 21.6 million. To support natural gas substitution in the district heating system of Kherson, MERP prepared two prefeasibility studies for the following projects:  Assistance in natural gas replacement with biomass in heat energy production (approx. project value USD 0.22 million); and  Construction of biofuel boiler based on "Tavriyska" boiler house in Kherson (approx. project value USD 4.47 million). Project Value, approx. “000” USD 21,600 Annual CO2 emissions reduction, 10,399 “000” tons

Energy Management

EMS concept approved by the city council; Trainings and package of documents Energy Management Support provided; Energy Management system established

Energy Manager Certification Yes

Residential Energy Efficiency

The HOA Advisory Resource Center of Kherson is supported by the Kherson City NGO “Side by Side” HOA Development Center. Since 2015, 282 initiative groups obtained consultations from the Resource Center team. The experts held 244 informational meetings on establishment of the HOA’s in different parts of Kherson and organized 41 training events: workshops and round tables on the HOA activities. HOA Advisory Center As of September 30, 2017, there have been a total of 717 HOAs established in the city of Kherson. The Resource Center initiated development and adoption of the municipal program on compensation of part of loan amount for the loans received by the HOAs in the banking institutions, and of the oblast program on compensation of interest rates.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 179

Khmelnytskyi

Table 11-14. MERP Partner City Profile (Khmelnytskyi)

City Khmelnytskyi (Khmelnytskyi Oblast)

Nataliia Plekanets, Head of Department of Energy Saving and Investment Policies Energy Manager and department Contacts: (0382)651259; [email protected]; [email protected] EAs Municipal Energy Systems Under SEAP preparation Public buildings 39 Residential buildings - Energy Planning SEAP or SECAP Development Yes (Yes/No) SEAP or SECAP summary Period covered 2016-2020, 2021-2030 Public Buildings, Residential Buildings, Municipal Public Lighting, Transport, Sectors covered Water Supply and Wastewater, Energy Production, Solid Waste Value of investment through 2020, 87,124 approx. “000” USD Annual CO2 emissions reduction 210.12 through 2020, approx. “000” tons Approval Date May 18, 2016 Invested under SEAP (2015-2017 8,792 CY), approx. “000” USD Projects Development Investment project catalogue / Catalogue of Investment Projects through 2025 Investment Program # of projects 60 projects value, approx. “000” USD 79,794.23 CO2 emissions reduction or energy 212 savings, “000” tons Improvement of Energy Efficiency of Budgetary Institutions in the City of Project Proposal 1 Khmelnytskyi Project Area Public Buildings MERP conducted EAs and prepared a business plan that allowed the city to Project Description mobilize UAH 16.7 million, or ~USD 0.6 million, (NEFCO loan and E5P grant) for implementation of energy efficiency measures in public buildings. Project Value, approx. “000” USD 0.6 Annual savings, approx. “000” USD 0.1 Annual energy savings 1 678 000 kWh

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Table 11-14. MERP Partner City Profile (Khmelnytskyi)

City Khmelnytskyi (Khmelnytskyi Oblast)

Annual CO2 emissions reduction, 0.47 “000” tons Creation of biofuel-fired cogeneration unit at 2, Pivnicha Street, for Project Proposal 2 communal utility “South-Western Heat Networks” Project Area District Heating

The project developed prefeasibility study for construction of biofuel mini-CHP. The project value is estimated at UAH 78 million, or ~USD 3 million. The city Project Description (utility company), with the Project support, initiated negotiations with EBRD regarding potential loan funding.

Project Value, approx. “000” USD 3,000 Annual CO2 emissions reduction, 42.3 “000” tons Project Proposal 3 Collection and use of landfill gas in Khmelnytskyi solid waste landfill Project Area Solid Waste USAID Project assistance covered preliminary assessment of the landfill’s capacity for generation and utilization of the landfill gas, preparation of a prefeasibility study, and assistance in searching for private investors. The project implementation started in 2017 on PPP principles. The project envisions Project Description the installation of a gas fired electricity generation unit (up to 1 MW) which would permit the sale of electricity using the “green tariff.” The estimated private investments are in the area of UAH 30 million (~USD 1.1 million). This project will secure the landfill and will improve environmental conditions in the region. Project Value, approx. “000” USD 1,100 Annual CO2 emissions reduction, 75-80 “000” tons Improvement of Energy Efficiency of Budgetary Institutions in the city of Project Proposal 4 Khmelnytskyi Public Buildings Project Area Public Buildings MERP conducted EAs of 31 public (schools, kindergartens, and medical facilities) and prepared prefeasibility study which allowed the city to mobilize Project Description ~USD 7.9 million under EIB “Municipal Infrastructure Development Program” for implementation of energy efficiency measures in public buildings. Project Value, approx. “000” USD 7,900 Annual savings, approx. “000” USD 606 Annual energy savings 16,552,053 kWh Annual CO2 emissions reduction, 4.92 “000” tons Energy Management Energy Management system established, trainings provided and package of Energy Management Support documents for EMS developed. Energy Manager Certification Yes

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 181

Table 11-14. MERP Partner City Profile (Khmelnytskyi)

City Khmelnytskyi (Khmelnytskyi Oblast)

Private Sector Participation Project 3 “Collection and use of landfill gas in Khmelnytskyi solid waste landfill” ESCO, PPP and other is implemented on PPP principles. Residential Energy Efficiency The Resource Advisory Center in Khmelnytskyi initiated development and adoption of the municipal Program on promotion of HOA activities, development of self-organization of the housing owners in multiapartment buildings of Khmelnytskyi for 2016-2018, and implementation of energy efficiency measures in housing. NGO “Resource Center - Khmelnytskyi HOA Association” provided assistance HOA Advisory Center in establishing HOA to 236 initiative groups. The Resource Center team held 144 informational meetings for the co-owners of multiapartment buildings. In order to support the established HOAs, the Resource Center consultants organized 72 training events: workshops, round tables and conferences. Active work is also conducted in the information space of the city. As of September 30, 2017, there have been a total of 333 HOAs registered in the city.

Kramatorsk

Table 11-15. MERP Partner City Profile (Kramatorsk)

City Kramatorsk (Donetsk Oblast)

Olha Saikova, Head, Energy Section, Department of Transport, Communications, and Energy, Kramatorsk City Council Energy Manager and department Contacts: (06264) 2-19-97; [email protected]; [email protected]; EAs Municipal Energy Systems under SEAP preparation Public buildings - Residential buildings - Energy Planning SEAP or SECAP Development Yes (Yes/No) SEAP or SECAP summary Period covered 2015-2025 Public Buildings, Residential Buildings, Municipal Public Lighting, Transport, Sectors covered Water Supply and Wastewater, Energy Production, Solid Waste Value of investment through 2020, 207,286.62 approx. “000” USD Annual CO2 emissions reduction 298.22 through 2020, approx. “000” tons

182 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan

Table 11-15. MERP Partner City Profile (Kramatorsk)

City Kramatorsk (Donetsk Oblast)

Approval Date April 22, 2015 Invested under SEAP (2015-2017 14,795.63 CY), approx. “000” USD Projects Development Investment project catalogue / Registry of Investment Projects for 2017-2031 Investment Program # of projects 49 projects value, approx. “000” USD 101,565 CO2 emissions reduction or energy 89.90 savings, “000” tons Project Proposal 1 Electric Transport Traction Substation Modernization Project Area Transport Based on the EA results conducted by the Project and SEAP the city was able to develop a concept and apply for funding under EU CoM grant program. As a Project Description result, the city mobilized ~USD 1.4 million for electric transport traction substation modernization. Project Value, approx. “000” USD 1,400 Project Proposal 2 Increasing Effectiveness of Public Transport of Kramatorsk Project Area Transport The Project developed a Concept Paper for Increasing Effectiveness of Public Transport of Kramatorsk. The concept reflects the results of the comprehensive analysis and modeling for the transport system of Kramatorsk. It contains several project proposals and recommendations for the following areas:  Recommendations on development of the municipal street and road system;  Recommendations on improvement of the route network, public transport stock structure, and improved functioning of the public transportation system;  Project proposal on capital renovation and modernization of trolleybuses;  Project proposal on installation of electricity meters on rolling stock and incentivizing the drivers to save electricity;  Project proposal on introduction of the automated dispatch and control systems (ADCS) and recordkeeping of fare payment (RFP); Project Description  Project proposal on organization of transport connection between Kramatorsk and Sloviansk by trolleybuses with possibility of autonomous power supply;  Comprehensive project proposal for development of bicycle infrastructure;  Project proposal on construction, expansion, reconstruction of road sections, improvement of traffic management;  Comprehensive project proposal for development of the automated traffic control system;  Project proposal on reconstruction and renovation of the main traffic arteries of Kramatorsk. The overall value of the proposed measures is ~USD 62 million. The city will use the results of the analysis, project proposals, and recommendations in the new strategic programs and to attract loans, grants, and public funds for the development of the transport infrastructure.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 183

Table 11-15. MERP Partner City Profile (Kramatorsk)

City Kramatorsk (Donetsk Oblast)

Project Value, approx. “000” USD 60,000 Energy Management Energy Management Unit within City Administration established; trainings Energy Management Support provided and package of documents for EMS developed. Energy Manager Certification Yes Residential Energy Efficiency In Kramatorsk of Donetsk Oblast, the HOA Advisory Resource Center operates as part of the Department of Housing and Communal Services of the City Council. Starting from 2015, the Center consultants provided assistance to representatives of 107 initiative groups in establishing HOAs and held 71 field informational meeting with the co-owners of multiapartment buildings. The HOA Advisory Center Resource Center experts organized and conducted 29 training events for the HOA’s chairmen and other stakeholders, participated in TV programs, and provided support and expertise to media representatives in preparation of the materials for the newspapers and websites. As of September 30, 2017, a total of 109 HOAs have been created in Kramatorsk.

Kremenchuk

Table 11-16. MERP Partner City Profile (Kremenchuk)

City Kremenchuk (Poltava Oblast)

Tetiana Andriievska, Head, Department for Energy Management and Energy Industry Energy Manager and department Contacts: (0536) 74-38-64; [email protected]; [email protected]; [email protected]; [email protected] EAs Municipal Energy Systems - Public buildings 50 Residential buildings - Energy Planning SEAP or SECAP Development No (Yes/No) Project Proposal 1 Kremenchuk Public Buildings EE Project Area Public Buildings

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Table 11-16. MERP Partner City Profile (Kremenchuk)

City Kremenchuk (Poltava Oblast)

The Project delivered the EAs and feasibility study for thermomodernization of public buildings in Kremenchuk. The feasibility study was prepared to secure EBRD, CTF and Eastern Europe Energy Efficiency and Environmental Partnership (E5P) financing to implement energy efficiency measures in public buildings, including schools and medical institutions. MERP developed several options (packages) to be considered for funding. The suggested options predict CO₂ emissions falling by 4 to 5 thousand tons annually and financing (project value) of USD 9 million to 11 million. Based on feasibility study developed by MERP, EBRD approved the project to provide a senior loan of up to EUR 6 million to the City of Kremenchuk set up to Project Description manage energy-saving projects in public buildings in the city. The loan is to be complemented by a grant of up to EUR 1.5 million, proposed for co-financing from the EBRD SSF, and a concessional loan of up to EUR 1.5 million from the CTF. The proposed investment will enable the city to finance energy efficiency measures in 66 public buildings, including 38 kindergartens, 23 schools, and 5 hospitals through energy performance contracts implemented by private construction/engineering or energy service companies selected by competitive tender. It is envisaged that the project will lead to reductions in energy consumption of approximately 20,000 MWh per year, CO₂ savings of approximately 5,000 tons per year, and improved comfort levels at kindergartens, schools, and hospitals. Project Value, approx. “000” USD 9,000-11,000 Annual savings, approx. “000” USD Annual energy savings 20,000 MWh Annual CO2 emissions reduction, 4 - 5 “000” tons

Kropyvnytskyi

Table 11-17. MERP Partner City Profile (Kropyvnytskyi)

City Kropyvnytskyi (Kirovohrad Oblast)

Andrii Palyvoda, Director of Department for Economic Development, Trade, Energy Manager and department and Investment; Head of Economic Directorate, Kirovohrad City Council Contacts: (0522) 24-48-50; [email protected]; [email protected] EAs Municipal Energy Systems - Public buildings 35 (10 – in Project Pipeline) Residential buildings 15 (9 – in Project Pipeline) Energy Planning SEAP or SECAP Development No (Yes/No) Project Proposal 1 Support in Implementation of Energy Efficiency Measures in Buildings Project Area Public Buildings

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 185

MERP experts conducted EAs of 50 public and residential buildings for the city. Based on EA results and IFI (EBRD) lending options, the Project prepared a prefeasibility study for complex thermomodernization of 38 public buildings. Project Description The prefeasibility study envisions four financing options (variations of city and grant funding levels) for the project valued at approximately USD 12.5 million, with the payback ranging from 9 to 12 years. Project Value, approx. “000” USD 12,500

Kryvyi Rih

Table 11-18. MERP Partner City Profile (Kryvyi Rih)

City Kryvyi Rih (Dnipropetrovsk Oblast)

Vitaliia Sicheva, Head, Department for Energy Management and Implementation of Energy Saving Technology, Executive Committee, Kryvyi Energy Manager and department Rih City Council Contacts: (0564)74-32-63; 92-13-16; [email protected]; [email protected] EAs Municipal Energy Systems Under SEAP preparation Public buildings 52 Residential buildings - Energy Planning SEAP or SECAP Development Yes (Yes/No) SEAP or SECAP summary Period covered 2016-2025 Municipal Buildings, Tertiary Buildings, Residential Buildings, Municipal Public Sectors covered Lighting, Transport, Water Supply and Wastewater, Energy Production, Solid Waste Value of investment through 2020, 110,007 approx. “000” USD Annual CO2 emissions reduction 212.4 through 2020, approx. “000” tons Approval Date April 26, 2017 Invested under SEAP (2015-2017), 5,253 approx. “000” USD Projects Development Investment project catalogue / Catalogue of Investment Projects through 2025 Investment Program # of projects 31 projects value, approx. “000” USD 194,610.77 CO2 emissions reduction or energy 431.13 savings, approx. “000” tons

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Table 11-18. MERP Partner City Profile (Kryvyi Rih)

City Kryvyi Rih (Dnipropetrovsk Oblast)

Comprehensive thermal modernization of buildings and networks in Project Proposal 1 kindergartens 15 and 231of Dzerzhinsky district in Kryvyi Rih Project Area Public Buildings MERP conducted EAs and prepared business plan for comprehensive thermal Project Description modernization of buildings - kindergartens #15 and #231 using NEFCO and E5P funding in the amount of ~USD 0.4 million. Project Value, approx. “000” USD 400 Annual savings, approx. “000” USD 57.2 Annual energy savings 964,060 kWh or equivalent of 91,585 cubic meters of natural gas Annual CO2 emissions reduction, 0,22 “000” tons Improving the Energy Efficiency of Buildings of the Budget Sphere of Project Proposal 3 Kryvyi Rih Project Area Public Buildings Project: MERP finalized the prefeasibility study for the potential IFI-funded project “Improving the Energy Efficiency of Buildings of the Budget Sphere of Kryvyi Rih”. The project covers implementation of energy efficiency measures in 50 public buildings. The feasibility study covers three alternative packages Project Description (options) valued between USD 4 and 25 million depending on the set of measures to be implemented and funding sources. The energy savings for the options are estimated at 11–31 million kWh on an annual basis. The city is expected to use its own and existing IFIs programs resources (EBRD) for project implementation.

Project Value, approx. “000” USD between 4,000 and 25,000

Annual energy savings 11–31 million kWh

Energy Management

Energy Management Unite within City Administration established; Trainings Energy Management Support and package of documents provided

Energy Manager Certification Yes

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 187

Kyiv

Table 11-19. MERP Partner City Profile (Kyiv)

City Kyiv (Kyiv Oblast)

Olena Malezhyk, Deputy Department Director, Head of Directorate for Energy Saving, Fuel and Energy Complex, and Potable Water, Kyiv City State Administration Energy Manager and department Contacts: (044) 279-29-21; [email protected]; [email protected]; [email protected] Maryna Stotska: 044-235-92-39, [email protected] EAs Municipal Energy Systems Under SEAP preparation Public buildings Residential buildings - Energy Planning SEAP or SECAP Development Yes (Yes/No) SEAP or SECAP summary Period covered 2016-2020, 2021-2030 Municipal Buildings, Residential Buildings, Municipal Public Lighting, Transport, Sectors covered Water Supply and Wastewater, Energy Production, Solid Waste Value of investment through 2020, 309,692 approx. “000” USD Annual CO2 emissions reduction 442.7 through 2020, approx. “000” tons Approval Date Not approved Invested under SEAP (2015-2017), - approx. “000” USD Projects Development Investment project catalogue / Registry of Investment Projects for 2015-2030 Investment Program # of projects 34 projects value, approx. “000” USD 5,528,769.23 CO2 emissions reduction or energy 3,265.60 savings, approx. “000” tons Project Proposal 1 Development and introduction of ESCO mechanism in Kyiv public sector Project Area Public Buildings

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Table 11-19. MERP Partner City Profile (Kyiv)

City Kyiv (Kyiv Oblast)

MERP conducted detailed analysis of legal and regulatory issues to enable the implementation of energy efficiency projects in public buildings in the city of Kyiv. MERP assisted Kyiv City Administration on updating the legal and financial documentation needed for implementing EnPC for Kyiv ESCO. The Project Description Project developed and presented draft Energy Service Agreements, recommendations on the procurement process, a road map for budgeting and payment of the Energy Service Agreements. As a result of MERP assistance, the city was able to start project implementation. The project value (NEFCO loan, E5P grant and city funding) is EUR 9.3 million, or ~USD 10.5 million. Project Value, approx. “000” USD 1050 Introduction of alternative energy sources for heat supply of public Project Proposal 2 buildings according to PPP scheme

Project Area X

MERP prepared the feasibility study for the project “Modernization of interior heating systems to use biomass for the production of heat energy and reconstruction of public buildings based on clean energy PPPs”. As a part of the feasibility study preparation, MERP experts conducted examinations of boiler houses supplying heat energy to public buildings and EAs of 19 buildings owned by four budgetary institutions, and developed preliminary technical solutions for the modernization of heating systems to use biomass for the production of heat energy. In December 2016, MERP held presentations of the feasibility study to staff of the relevant departments of Kyiv City State Administration, Deputy Mayor of Kyiv, local council deputies, factions and other stakeholders. As a result of the Project Description presentations, it was agreed that Kyiv City State Administration will earmark in the city’s budget amounts for quick payback period projects which will be implemented in the buildings owned by three budgetary institutions:  Darnytsia Orphanage located at 58/60 Yalynkova St.  Kyiv Boarding House of Labor Veterans located at 2 Zhukova St.  Svyatoshyn Psychoneurology Boarding House located at 16 Kramskoho St. MERP prepared a plan of priority actions for the establishment of clean energy PPPs and templates of documents which should be approved and adopted by an appropriate resolution of Kyiv City Council. The project value is UAH 128 million, or ~USD 4.9 million.

Project Value, approx. “000” USD 4,900

Energy Management

Trainings and package of documents provided; Energy Management system is Energy Management Support functional.

Energy Manager Certification Yes

Private Sector Participation

Project 2 “Introduction of alternative energy sources for heat supply of public ESCO, PPP and other buildings according to PPP scheme” is implemented on PPP principles.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 189

Lutsk

Table 11-20. MERP Partner City Profile (Lutsk)

City Lutsk (Volyn Oblast)

Kostiantyn Patrakeiev, Deputy Director, Department for Economic Policies, Energy Manager and department Head of Energy Saving Sub-Department, Lutsk City Council Contacts: (0332) 777934; [email protected]; [email protected] EAs Municipal Energy Systems Under SEAP preparation Public buildings 8 Residential buildings - Energy Planning SEAP or SECAP Development Yes (Yes/No) SEAP or SECAP summary Period covered 2015 - 2025 Municipal Buildings, Residential Buildings, Municipal Public Lighting, Transport, Sectors covered Water Supply and Wastewater, Energy Production, Solid Waste Value of investment through 2020, 34,989 approx. “000” USD Annual CO2 emissions reduction 193.8 through 2020, approx. “000” tons Approval Date October 6, 2015 Invested under SEAP (2015-2017), 9,986 approx. “000” USD Projects Development Investment project catalogue / Catalogue of Investment Projects through 2025 Investment Program # of projects 89 projects value, approx. “000” USD 47,262.69 CO2 emissions reduction or energy 192.09 savings, approx. “000” tons Project Proposal 1 Improved energy efficiency of public buildings in Lutsk Project Area Public Buildings

190 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan

Table 11-20. MERP Partner City Profile (Lutsk)

City Lutsk (Volyn Oblast)

MERP prepared a business plan to enable implementation of energy efficiency measures in public buildings in Lutsk. The mobilized funding (NEFCO loan and E5P grant) is ~USD 0.48 million. In November 2015, Lutsk City Council presented Lutsk SEAP to NEFCO. As a result of SEAP presentation, NEFCO expressed an interest in issuing a EUR 5 Project Description million loan to Lutsk for increasing energy efficiency in public buildings, with the possibility of receiving about EUR 2 million as a grant from E5P. It is anticipated that the above-mentioned loan will be spent for the thermal modernization of over 40 public buildings in Lutsk (out of 77 public buildings included into the Lutsk SEAP). This means that energy efficiency measures will be implemented in over two-thirds of the public buildings in Lutsk. Project Value, approx. “000” USD 480 Annual savings, approx. “000” USD 80 Annual energy savings 1 320 MWh Annual CO2 emissions reduction, 0.398 “000” tons

Energy Management

Trainings and package of documents provided; Energy Management system Energy Management Support established; Improved EMS documentation is submitted to the city.

Energy Manager Certification Yes

Residential Energy Efficiency

In Lutsk, the HOA Clean Energy Resource Center is established on the basis of the “Luchany” HOA Association. In the period of 01/01/2015 to 09/30/2017, 299 initiative groups asked the Resource Center for assistance in establishment of the condominiums. Over the same period of time, the Resource Center experts held 233 field informational meetings for the residents of Lutsk. The CERC consultants organized 122 training events: tours, workshops and round tables on establishment and functioning of the HOA’s, clean energy HOA Advisory Center technologies and energy efficiency measures. Every week, the team takes part in the local TV programs. The CRC representatives share successful experiences in energy efficiency measures with the resource centers from other USAID Project partner cities by arranging tours not only for the resource center employees but also for the mayors and employees of city administration. The RC consultants cooperate with the local media. As of September 30, 2017, there have been a total of 398 HOAs established in Lutsk.

Lviv

Table 11-21. MERP Partner City Profile (Lviv)

City Lviv (Lviv Oblast)

Iryna Kulynych, Director of Department for Economic Development Contacts: Energy Manager and department (032)2975857; [email protected];

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 191

Table 11-21. MERP Partner City Profile (Lviv)

City Lviv (Lviv Oblast)

Vaskovets Roman: (032)2975857; 2546057; [email protected] EAs Municipal Energy Systems Public buildings Residential buildings Energy Planning SEAP or SECAP Development No (Yes/No) Project Proposal 1 Energy-efficient reconstruction of public buildings Project Area District Heating For the city of Lviv, the Project developed the strategy document for the energy-efficient reconstruction of public buildings, including the modernization of heating systems, on the basis of clean energy PPPs and the feasibility study for the “Installation of heat pumps for the heating system of two educational institutions of Lviv” project (Lviv Technological Lyceum and kindergarten #14). Project Description The city confirmed its readiness to co-finance the project within the project financing plan and to conduct a state expert review of the feasibility study. MERP also prepared a list of potential investors, an information leaflet for investors and a strategic paper for project implementation on PPP principles. The project value is ~USD 0.2 million. Project Value, approx. “000” USD 200 Construction of heat pumping station at Lviv sewage treatment facilities Project Proposal 2 and utilization of sludge deposits for energy production

Project Area District Heating

The project aimed at replacing natural gas with waste thermal energy, reducing the fuel component of the cost of heat energy, reducing CO2 emissions into the atmosphere, as well as utilizing sludge sediments of urban sewage. The project concept is to utilize the waste heat of purified sewage effluents of COS LCME LC "Lvivvodokanal" in the nearby district heating system (SCT) of Project Description LCME "Lvivteploenergo" based on the application of heat pumps. Heat pumps are used in combination with cogeneration units on natural gas. The cogeneration units provide heat pumps with electric energy, and their waste heat used for additional heating of the coolant. Based on USAID Project support, the city mobilized ~USD 8,65 million from EBRD.

Project Value, approx. “000” USD 8,650

Annual energy savings 50 percent reduction of natural gas consumption

Annual CO2 emissions reduction, 15.691 “000” tons

Project Proposal 3 EE Measures in Public Buildings

Project Area Public Buildings

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Table 11-21. MERP Partner City Profile (Lviv)

City Lviv (Lviv Oblast)

The EA carried out with the assistance of USAID experts. In the course of the work, the current state of the facility and energy consumption were analyzed. The EA report provided measures to optimize energy consumption, improve the Project Description microclimate, and management recommendations for equipment operation and service. Based on USAID Project support, the city need will mobilize ~USD 0.4 million (city budget).

Project Value, approx. “000” USD 400

Annual savings, approx. “000” USD 15.231

Annual energy savings 372.138 MWh of heat energy and of 5.73 MWh of electricity

Annual CO2 emissions reduction, 0.122 “000” tons

Demonstration Projects

Project Proposal 1 Project on reconstruction of the artificial electrical lighting system

Project Area Residential Buildings

Development of design and estimate documentation for the project on reconstruction of the artificial electrical lighting system in the staircase with use Project Description of photovoltaic cells, and of the hot water supply system with use of solar collectors in 9-story 107-apartment building at 25, Skrypnyka Str. in Lviv, condominium “Initsiatyva”

Project Value, approx. “000” USD 21

Project Proposal 2 Project on reconstruction of the heating system

Project Area Residential Buildings

Development of design and estimate documentation for the project on Project Description reconstruction of the heating system in 1-4 entrances of 212-apartment building at 39, Chervonoi kalyny ave in Lviv, condominium “MJK-1”

Project Value, approx. “000” USD 140

Project Proposal 3 Project Reconstruction of Heat Supply System in Kindergarten # 14

Project Area Public Buildings

Development of Design and Estimate Documentation for Project Project Description Reconstruction of Heat Supply System in Kindergarten # 14 Located at 42, Novoznesenska Street, Lviv

Project Value, approx. “000” USD 70

Energy Management

Energy Management Support Yes

Energy Manager Certification Yes

Residential Energy Efficiency

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 193

Table 11-21. MERP Partner City Profile (Lviv)

City Lviv (Lviv Oblast)

The HOAs of Lviv are supported by the HOA Department, HOA Resource Center of the Lviv City Council. Since 2015, 2,357 initiative groups and citizens obtained assistance in establishing condominiums from the Resource Center. The Resource Center consultants held 149 informational meetings on condominium establishment with co-owners of multiapartment buildings in different parts of the city. The Resource Center consultants organized 120 free training events (roundtables, workshops, conferences, trainings) on legal HOA Advisory Center aspects of HOAs, additional fundraising opportunities for the HOAs, etc. The Resource Center consultants cooperate with local media: TV channels, radio stations, newspapers and websites. As of September 30, 2017, a total of 1,114 HOAs operate in the city. The city has adopted the program on capital renovation and modernization of the elevators for 2017-2023.

Luhansk Oblast

Table 11-22. MERP Partner City Profile (Luhansk Oblast)

Rubizhne, Severodonetsk, Lysychansk, and Pryvillya of Luhansk City Oblast

Energy Manager and department EAs Municipal Energy Systems Public buildings 60 Residential buildings Energy Planning SEAP or SECAP Development No (Yes/No) Project Proposal 1 Improvement of heating services in public buildings sector Project Area Solid Waste In cooperation with Oblast Administration, the Project conducted assessment of 60 public buildings in Luhansk Oblast (Rubizhne, Severodonetsk, Lysychansk, and Pryvillya). The assessment covered walk-through EAs of 60 public buildings and development of typical technical solutions for installation of more efficient gas-fired boilers and replacement of fossil fuels used for heating with Project Description locally available renewable sources (biomass). The project value is UAH 257 million, or ~USD 9.9 million. To support substitution of fossil fuels with biomass, the Project conducted biomass potential assessment for Donetsk and Luhansk oblasts. The comprehensive assessment covered regional, district, and producer levels. Both assessments were presented in December 2017. Project Value, approx. “000” USD 9,900

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Mariupol

Table 11-23. MERP Partner City Profile (Mariupol)

City Mariupol (Donetsk Oblast)

Vaagn Mnatsakanian, Director of Department for Ecology, Energy Management, Occupational Safety, and Civil Defense Contacts: [email protected]; Energy Manager and department [email protected]; [email protected]; Serhii Kazaku – (0629) 33-63-60; [email protected]; [email protected] EAs Municipal Energy Systems EA of District Heating systems; Water supply Wastewater systems Public buildings 40 Residential buildings - Energy Planning SEAP or SECAP Development No (Yes/No) Support to implementation of energy efficiency measures in public Project Proposal 1 buildings Project Area Public Buildings This feasibility study was developed with the technical support of the MERP, initiated by USAID for submission to the EIB to attract loan funds for the project "Improvement of Energy Efficiency of Budgetary facilities in the city of Mariupol." Project Description Three packages of EEM were recommended, which differ by scope of measures and/or facilities, investment needs and the main technical and economic indicators. Depending on the requirements of potential lenders, any one of the three packages can be used. The project value is ~USD 20 million. Project Value, approx. “000” USD 20,000 Annual savings, approx. “000” USD 1,346 Annual energy savings 23,398,028 kWh Annual CO2 emissions reduction, 7.51 “000” tons

Project Proposal 2 Modernization of district heating system

Project Area District Heating

The preliminary feasibility study for the modernization of the district heating system of the municipal commercial enterprise "Mariupolteplomerezha" completed with the assistance of USAID experts. "Mariupolteplomerezha" covers 30 percent of consumers of district heating services in the city of Project Description Mariupol. Based on the EA, measures to modernize the heat supply systems from 14 boiler houses of the enterprise have been developed. The main task of modernization is to reduce the consumption of energy resources while simultaneously improving the level of thermal comfort in the buildings of the city of Mariupol.

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 195

Table 11-23. MERP Partner City Profile (Mariupol)

City Mariupol (Donetsk Oblast)

Project Value, approx. “000” USD 36,000

Annual savings, approx. “000” USD 5,792,430 m3 natural gas

Annual energy savings 10.99

Project Proposal 3 EE in Water Supply and Sanitation

Project Area Water / Wastewater

MERP presented the results of the development of a preliminary feasibility study of the project "Improving the energy efficiency of water supply and water disposal systems of the ME "Mariupol VU VKG" of the city of Mariupol”. During the EA of ME "Mariupol VU VKG" of the city of Mariupol, USAID experts analyzed the initial energy consumption data. Based on the analysis, measures to improve the energy efficiency of water supply and water disposal systems have been developed. The preliminary feasibility study of the project is based on the energy efficiency improvements proposed by the experts. Proposed improvements include:  Energy management implementation;  Installation of new pumping units at the WPS “Sartanska” and WPS №5; Project Description  Installation of new pumping units at the SPS №№ 1-1А, 2, 6, 8, 9, 11, 12;  Automation of waste aeration at biological wastewater treatment plant;  Installation of a new pumping unit of active sludge at the biological wastewater treatment plant. To analyze the viability of financing the priority investment program, the following investigations should be conducted:  analysis of the existing situation and existing opportunities;  the plan of the investment program is developed;  financial evaluation of the energy efficiency improvement package;  analysis of the sensitivity of the energy efficiency improvement package;  the impact of the project activity on the environment. It is expected that the city will use IFI’s resources to implement the project. Project Value, approx. “000” USD 20,000 Annual savings, approx. “000” USD USD 1,979,627 Annual energy savings 7,271 MWh

Annual CO2 emissions reduction, 6.63 tons “000” tons

Demonstration Projects

Developing Design Estimate Documentation for Comprehensive Thermal Project Proposal 1 Modernization Project of Mariupol General Educational School

Project Area Public Buildings

Developing Design Estimate Documentation for Comprehensive Thermal Project Description Modernization Project of Mariupol General Educational School of Levels I-III, #52, at 57, Troitska St.

Project Value, approx. “000” USD 690

196 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan

Table 11-23. MERP Partner City Profile (Mariupol)

City Mariupol (Donetsk Oblast)

Developing Design Estimate Documentation for Comprehensive Thermal Project Proposal 2 Modernization Project of Mariupol Technology Lyceum

Project Area

Developing Design Estimate Documentation for Comprehensive Thermal Project Description Modernization Project of Mariupol Technology Lyceum at 133, Nikopolskyi Ave.

Project Value, approx. “000” USD Public Buildings

Annual savings, approx. “000” USD 280

Energy Management

Energy Management Support EM department created and functional

Energy Manager Certification Yes

Residential Energy Efficiency

Opening of the HOA Advisory Resource Center in Mariupol took place on 22 August 2017. It is expected that premises of the Resource Center will be used for training events and consultations for the initiative groups and already- HOA Advisory Center existing condominiums. As of 30 September 2017, 428 HOAs have been established in Mariupol. HOA ARC address: Mariupol, 93B, Myru Ave. Contact persons – Halyna Drot, Anastasiia Bohdanova, mob.: (068) 649-64-14

Myrnohrad

Table 11-24. MERP Partner City Profile (Myrnohrad)

City Myrnohrad (Donetsk Oblast)

Alla Matiushkina, Head of Department for Innovative Policies and Investment Activity Energy Manager and department Contacts: (06239) 6-11-22, (06239) 6-10-20, (06239) 61122 [email protected]; [email protected] EAs Municipal Energy Systems Public buildings 4 Residential buildings 8 Energy Planning SEAP or SECAP Development Yes (Yes/No) SEAP or SECAP summary Period covered Until 2030

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 197

Table 11-24. MERP Partner City Profile (Myrnohrad)

City Myrnohrad (Donetsk Oblast)

Municipal Buildings, Tertiary Buildings, Residential Buildings, Municipal Public Sectors covered Lighting, Transport, Water Supply and Wastewater, Energy Production, Solid Waste Value of investment through 2020, 33,800 approx. “000” USD Annual CO2 emissions reduction 28 through 2020, approx. “000” tons Approval Date December 13, 2017 Projects Development Investment project catalogue /

Investment Program # of projects 79 projects value, approx. “000” USD 33,800 CO2 emissions reduction or energy 28 savings, approx. “000” tons

Odesa

Table 11-25. MERP Partner City Profile (Odesa)

City Odesa (Odesa Oblast)

Vitalii Savych, Deputy Director, Agency for Odesa Municipal Development Energy Manager and department Programs Municipal Enterprise, Odesa City Council Contacts: (048)737-7924; [email protected]; [email protected]; EAs Municipal Energy Systems Public buildings 40 Residential buildings Energy Planning SEAP or SECAP Development No (Yes/No) Support for implementation of energy efficiency measures in public Project Proposal 1 buildings Project Area Public Buildings

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Table 11-25. MERP Partner City Profile (Odesa)

City Odesa (Odesa Oblast)

The project provides for EA in 40 public buildings of Odesa. These buildings have outdated energy systems:  insufficient level of thermal protection, which leads to significant overheating of heat energy for heating needs;  lack of effective systems of temperature and hourly regulation of heat energy consumption;  operation of old lighting systems with incandescent and fluorescent lamps; and Project Description  noncompliance of the specific energy consumption level with the current and future ones, which is caused by significant losses of heat energy. A list of energy-efficient measures was provided, aimed at increasing EE, as well as improving the microclimate parameters in the premises of the buildings. In general, the proposed measures aimed at conducting repair and construction works to improve the thermal engineering parameters of the building envelope, modernization of engineering systems, and replacement of energy sources. Based on USAID Project support, the city need to mobilize ~EUR 16,255,790 from EBRD. Project Value, approx. “000” USD 19,182 Annual savings, approx. “000” USD 1,188 Annual energy savings 20,577.182 MWh Annual CO2 emissions reduction, 6.69 “000” tons Independent Hot Water Supply Program for public buildings of the Project Proposal 2 Department of Education in the City of Odesa in the period 2018-2020

Project Area Water Supply

The Concept of the program for the decentralized hot water supply system for schools year-round, using solar energy in Odesa City. The program also provides organizational, managerial, financial, and economic, educational, and informational and advertising measures to ensure year-round high-quality hot water supply for schools in Odesa. Realization of the main Project Description directions of strategic development of the sphere of integration of renewable energy sources, through the phased implementation of measures for the replacement of electricity with the use of solar energy and other alternative energy sources. Based on USAID Project support, the city need to mobilize ~EUR 3.96 million from city budget.

Project Value, approx. “000” USD 4,673

Annual savings, approx. “000” USD 469

Annual energy savings 5,392,600 MWh

Project Proposal 3 Modernization of district heating system in Odesa City

Project Area District Heating

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 199

Table 11-25. MERP Partner City Profile (Odesa)

City Odesa (Odesa Oblast)

Modernization of district heating system in Odesa City. The Project conducted EAs of district heating system in Odesa City to identify measures that allow cutting energy consumption and expenses for heating Project Description generation and transportation. The proposed project envisions a set of measures such as optimization and renovation of heating networks, installation of IHUs, replacement of old boilers, introduction of EM system, etc. Overall cost of suggested measures is over USD 28 million.

Project Value, approx. “000” USD 28,000

Annual savings, approx. “000” USD 4,000

Annual energy savings 35,128 mWt and 4,582 cubic meters of natural gas

Evaluation of the Odesa landfill solid waste potential and identification of Project Proposal 4 waste recycling plant building technology to generate heat and electricity Project Area Solid Waste

The Project prepared a prefeasibility study to evaluate the Odesa City landfill solid waste potential and identification of waste recycling plant building technology to generate heat and electricity. The proposed project cost is USD Project Description 6.8 million. If successfully installed, it allows reducing СО2 equivalent emissions of landfill solid waste polygon by thousand tons annually, produce 24,000 MWt of electric energy, and generating savings of about USD 2.8 million each year. Project Value, approx. “000” USD 6,800

Annual savings, approx. “000” USD 2,800

Annual energy savings 24,000 MWt

Annual CO2 emissions reduction, 466 “000” tons

Energy Management

Energy Management Support Yes

Energy Manager Certification Yes

Odesa Oblast

Table 11-26. MERP Partner City Profile (Odesa Oblast)

City Lyubashivka Village (Odesa Oblast)

Energy Manager and department EAs Municipal Energy Systems Public buildings 1

200 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan

Table 11-26. MERP Partner City Profile (Odesa Oblast)

City Lyubashivka Village (Odesa Oblast)

Residential buildings Energy Planning SEAP or SECAP Development No (Yes/No) Project Proposal 1 EE measures in public buildings, Lyubashivka Village Project Area Public Buildings The Project prepared an EA of public building in Lyubashivka Village. The project prosed a combination of reconstruction and energy efficiency measures for an abandoned social building with total cost of about USD 0.35 million. Project Description Once implemented, the project allows to reconstruct buildings according to Class B standard of energy efficiency of the building, consuming 50 percent less energy resources than buildings of Class F. Project Value, approx. “000” USD 350 Annual savings, approx. “000” USD Annual energy savings 50 percent reduction in energy consumption Annual CO2 emissions reduction, 6.69 “000” tons

Energy Management

Energy Management Support Yes

Energy Manager Certification Yes

Pavlohrad

Table 11-27. MERP Partner City Profile (Pavlohrad)

City Pavlohrad (Dnipropetrovsk Oblast)

Andrii Zavhorodnii, Director, Directorate of Municipal Utilities and Construction, Pavlohrad City Council Energy Manager and department Contacts: (05632) 6-28-04; [email protected]; [email protected]; [email protected] EAs Municipal Energy Systems Under SEAP preparation Public buildings 8 Residential buildings - Energy Planning SEAP or SECAP Development Yes (Yes/No) SEAP or SECAP summary

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 201

Table 11-27. MERP Partner City Profile (Pavlohrad)

City Pavlohrad (Dnipropetrovsk Oblast)

Period covered 2015 - 2020 Municipal Buildings, Residential Buildings, Municipal Public Lighting, Transport, Sectors covered Water Supply and Wastewater, Energy Production, Solid Waste Value of investment through 2020, 5,934 approx. “000” USD Annual CO2 emissions reduction 6.39 through 2020, approx. “000” tons Approval Date May 24, 2017 Invested under SEAP (2015-2017), 789 approx. “000” USD Projects Development Investment project catalogue / Registry of Investment Projects for 2015-2030 Investment Program # of projects 13 projects value, approx. “000” USD 179,376.92 CO2 emissions reduction or energy 69.60 savings, approx. “000” tons Project Proposal 1 Improved energy efficiency of public buildings in Pavlohrad Project Area Public Buildings MERP experts prepared a business plan to allow thermal modernization of eight public buildings in the city. It is expected that the city will use NEFCO loan Project Description and E5P grant to implement plan. The project value is UAH 13.35 million or ~USD 0.5 million. Project Value, approx. “000” USD 500

Energy Management

Trainings and package of documents provided; EMS is functional for public Energy Management Support buildings sector

Energy Manager Certification Yes

Residential Energy Efficiency

202 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan

Table 11-27. MERP Partner City Profile (Pavlohrad)

City Pavlohrad (Dnipropetrovsk Oblast)

In Pavlohrad of Dnipropetrovsk Oblast, the HOA Advisory Resource Center operates on the basis of Pavlohrad City NGO “HOAs: Future of Pavlohrad.” Since 2015, 323 initiative groups obtained assistance from the Resource Center in establishing HOAs. The Resource Center consultants held 129 informational meetings in different parts of the city and oblast. As of September 30, 2017, a total of 365 HOAs had been established in the city of Pavlohrad. HOA Advisory Center The Resource Center helps not only to establish, but also support HOAs. In 2015, it conducted free workshops for accountants and HOA chairmen, training sessions on project proposal development, and personal consultations. In 2016, in addition to large number of personal consultations, three seminars on preparation of project proposals for participation in different contest programs were conducted, as well as working meetings for resolving the problems. The Resource Center actively cooperates with local media to highlight its work and raise awareness of current issues in HOA’s activities not only in Pavlohrad but also all over the Dnipropetrovsk region.

Pokrovsk

Table 11-28. MERP Partner City Profile (Pokrovsk)

City Pokrovsk (Donetsk Oblast)

Yevhen Speranskyi, Chief Specialist, Department for Coordination of Municipal Enterprises Energy Manager and department Contacts: 0623 52-19-90; [email protected]; [email protected]; [email protected]; [email protected] EAs Municipal Energy Systems Under SEAP preparation Public buildings 7 Residential buildings 5 Energy Planning SEAP or SECAP Development Yes (Yes/No) SEAP or SECAP summary Period covered Until 2030 Municipal Buildings, Residential Buildings, Municipal Public Lighting, Transport, Sectors covered Water Supply and Wastewater, Energy Production, Solid Waste Value of investment through 2020, 60,669 approx. “000” USD Annual CO2 emissions reduction 67.2 through 2020, approx. “000” tons Approval Date December 12, 2017 Projects Development

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 203

Table 11-28. MERP Partner City Profile (Pokrovsk)

City Pokrovsk (Donetsk Oblast)

Investment project catalogue / Investment strategy under SEAP until 2030 of Pokrovsk City Investment Program # of projects 69 projects value, approx. “000” USD 148,923

Energy Management EM function introduced (requires improvement) – specialists in several Energy Management Support departments of city administration perform EM functions

Energy Manager Certification -

Reni

Table 11-29. MERP Partner City Profile (Reni)

City Reni (Odesa Oblast)

Khrystyna Radu, Chief Specialist for Economy and Investment, Reni City Energy Manager and department Council Contacts: (04840) 4-02-19; [email protected]; [email protected] EAs Municipal Energy Systems Under SECAP preparation Public buildings 3 Residential buildings 14 Energy Planning SEAP or SECAP Development Yes (Yes/No) SEAP or SECAP summary Period covered Until 2030 Municipal Buildings, Residential Buildings, Municipal Public Lighting, Transport, Sectors covered Water Supply and Wastewater, Energy Production, Solid Waste Value of investment through 2020, 22,610 approx. “000” USD Annual CO2 emissions reduction 14,03 through 2020, approx. “000” tons Approval Date July 26, 2017

Energy Management EM function introduced (requires improvement) – specialists in several Energy Management Support departments of city administration perform EM functions

Energy Manager Certification -

204 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan

Rivne

Table 11-30. MERP Partner City Profile (Rivne)

City Rivne (Rivne Oblast)

Ihor Pavliuk, Head, Department of Industry and Entrepreneurship, Directorate of Municipal Economy Energy Manager and department Contacts: (0362)225946; [email protected]; [email protected]; nzag@city- adm.rv.ua EAs Municipal Energy Systems Under SEAP preparation Public buildings - Residential buildings - Energy Planning SEAP or SECAP Development Yes (Yes/No) SEAP or SECAP summary Period covered 2016-2020, 2021-2030 Municipal Buildings, Residential Buildings, Municipal Public Lighting, Transport, Sectors covered Water Supply and Wastewater, Energy Production, Solid Waste Value of investment through 2020, 67,240 approx. “000” USD Annual CO2 emissions reduction 107,3 through 2020, approx. “000” tons Approval Date April 21, 2016 Invested under SEAP (2015-2017), 11,722 approx. “000” USD Projects Development Investment project catalogue / Catalogue of Investment Projects through 2020 Investment Program # of projects 32 projects value ~USD 85,671 CO2 emissions reduction or energy 90.16 savings, approx. “000” tons

Energy Management

Energy Management system established; Trainings provided; Improved EMS Energy Management Support documentation is submitted to the city and district heating company.

Energy Manager Certification -

Residential Energy Efficiency

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 205

Table 11-30. MERP Partner City Profile (Rivne)

City Rivne (Rivne Oblast)

In Rivne, the HOA Advisory Resource Center operates on the basis of NGO “Council of Rivne Condominium Chairmen”. During the course of the Project, 715 initiative groups obtained RC assistance in establishing condominiums. In addition, the Resource Center team held 474 information meetings on HOA Advisory Center condominium establishment for the co-owners of multiapartment buildings of the city. Resource Center experts provide consultations on establishment and functioning of the condominiums; they conducted 71 training events, including workshops and trainings for the stakeholder population.

Rubizhne

Table 11-31. MERP Partner City Profile (Rubizhne)

City Rubizhne (Luhansk Oblast)

Nataliia Kovalenko, Head, Department of Economic Analysis and Investment Energy Manager and department Policies Contacts: (06453) 6-47-03; [email protected]; [email protected] EAs Municipal Energy Systems Under SEAP preparation Public buildings 7 Residential buildings 10 Energy Planning SEAP or SECAP Development Yes (Yes/No) SEAP or SECAP summary Period covered Until 2030 Municipal Buildings, Residential Buildings, Municipal Public Lighting, Transport, Sectors covered Water Supply and Wastewater, Energy Production, Solid Waste Value of investment through 2020, 48,153 approx. “000” USD Annual CO2 emissions reduction 43.2 through 2020, approx. “000” tons Approval Date November 29, 2017 Projects Development Investment project catalogue / Investment strategy under SEAP until 2030 of Rubizhne City Investment Program # of projects 56 projects value, approx. “000” USD 104,173 CO2 emissions reduction or energy 44.6 savings, approx. “000” tons

206 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan

Table 11-31. MERP Partner City Profile (Rubizhne)

City Rubizhne (Luhansk Oblast)

Project Proposal 1 Modernization of district heating system Project Area District Heating The Project prepared EA of district heating system in Rubizhne City. The project prosed a combination of energy efficiency measures with total cost Project Description about USD 2.4 million. If successfully implemented, the project would enable savings of approximately USD 0.5 million annually, and would reduce СО2 emissions equivalent by 4,608 tons each year. Project Value, approx. “000” USD 2,400 Annual savings, approx. “000” USD 500 Annual energy savings Annual CO2 emissions reduction, 4.61 “000” tons Project Proposal 2 Improvement of street lighting system Project Area Municipal lighting MERP prepared prefeasibility study for modernization of outdoor lighting Project Description systems of Rubizhne City with LED lights. The proposed project cost is USD 0.24 million. Project Value, approx. “000” USD 240 Annual savings, approx. “000” USD 13 Annual energy savings 112,000 kWt Annual CO2 emissions reduction, 0.131 “000” tons

Energy Management EM function introduced (requires improvement) – specialists in several Energy Management Support departments of city administration perform EM functions

Energy Manager Certification

Severodonetsk

Table 11-32. MERP Partner City Profile (Severodonetsk)

City Severodonetsk (Luhansk Oblast)

Nataliia Koliesnik, Director, Department for Economic Development, Sevierodonetsk City Council Energy Manager and department Contacts: (06452) 4-30-05; [email protected]; [email protected]; [email protected]; [email protected] EAs Municipal Energy Systems Public buildings 7

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 207

Table 11-32. MERP Partner City Profile (Severodonetsk)

City Severodonetsk (Luhansk Oblast)

Residential buildings 5 Energy Planning SEAP or SECAP Development No (Yes/No) Energy Scanning of Buildings and Development of project design and Project Proposal 1 cost documentation Project Area Public Buildings Energy Scanning of Buildings and Development of project design and cost Project Description documentation, Volodymyr Dal Eastern Ukrainian National University (ENU) Project Value, approx. “000” USD 6,280

Residential Energy Efficiency The HOA Advisory Resource Center in Severodonetsk was opened on 28 August 2017. The HOA RC plans include: holding seminars, preparation of the HOA housing stock to winter season, work with HOA co-owners, initiative groups, establishment of new HOA, cooperation with the grantors and banks in co-financing of energy efficiency measures in the HOA residential stock, receipt HOA Advisory Center of “warm loans”. The HOA RC has a Facebook page, Severodonetsk HOA Resource Center. As of 30 September 2017, 56 HOAs have been established in residential buildings, which is 10.7 percent of total housing stock in the city. HOA RC address: Severodonetsk, 115, Haharina Street, 3rd floor, office 14. Contact person – Roman Krasiuk, tel.: (06452) 3-21-17

Sloviansk

Table 11-33. MERP Partner City Profile (Sloviansk)

City Sloviansk (Donetsk Oblast)

Oleksandr Korchma, Energy Manager, Sloviansk City Council Energy Manager and department Contacts: (06262) 3-45-52; 3-35-22; [email protected]; [email protected]; [email protected] EAs Municipal Energy Systems Public buildings 18 Residential buildings 8 Energy Planning SEAP or SECAP Development No (Yes/No)

Energy Management

Energy Management Support EM function introduced – EM specialist in city administration

208 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan

Table 11-33. MERP Partner City Profile (Sloviansk)

City Sloviansk (Donetsk Oblast)

Energy Manager Certification Yes

Sumy

Table 11-34. MERP Partner City Profile (Sumy)

City Sumy (Sumy Oblast)

Maryna Dranichenko, Head of Ecology Section Energy Manager and department Contacts: (0542) 700-395; [email protected]; [email protected]; [email protected] EAs Municipal Energy Systems Under SEAP preparation Public buildings 33 Residential buildings 7 Energy Planning SEAP or SECAP Development Yes (Yes/No) SEAP or SECAP summary Period covered 2015 - 2023 Municipal Buildings, Tertiary Buildings, Residential Buildings, Municipal Public Sectors covered Lighting, Transport, Water Supply and Wastewater, Energy Production, Solid Waste Value of investment through 2020, 27,762 approx. “000” USD Annual CO2 emissions reduction 68 through 2020, approx. “000” tons Approval Date September 28, 2016 Invested under SEAP (2015-2017), 13,264 approx. “000” USD Projects Development Investment project catalogue / Catalogue of Investment Projects Investment Program # of projects 25 projects value, approx. “000” USD 68,627 CO2 emissions reduction or energy 125.66 savings, approx. “000” tons Project Proposal 1 Construction of mini-CHP using solid waste in Sumy Project Area District Heating

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 209

Table 11-34. MERP Partner City Profile (Sumy)

City Sumy (Sumy Oblast)

MERP prepared a prefeasibility study for construction of a mini-CHP using solid waste in Sumy city. The proposed project cost is USD 12.8 million. If successful, the project could save USD 2.4 million annually, substitute 7,490 Project Description thousand cubic meters of natural gas, and reduce electric energy consumption by 10,887 MWt per year. This will lead to reduction of СО2 emissions equivalent by 26,230 tons annually. Project Value, approx. “000” USD 12,790 Annual savings, approx. “000” USD 2,400 7,490 thousand cubic meters of natural gas, and electric energy consumption Annual energy savings of 10,887 MWt Annual CO2 emissions reduction, 26.23 “000” tons Implementation of the energy efficiency measures in public buildings in Project Proposal 2 the educational sector Project Area Public buildings MERP conducted EAs and prepared prefeasibility study which allowed the city to mobilize ~USD 6.9 million under EIB “Municipal Infrastructure Development Program” for implementation of energy efficiency measures in public buildings. The complex thermal modernization of 33 public buildings will result in (on Project Description annual basis):  Energy savings of or equivalent of 1,275,819 m3 of natural gas;  Reduce energy costs by USD 638,970;  CO₂ emissions reduction of 3,366 tons. Project Value, approx. “000” USD 6,880

Annual savings, approx. “000” USD 638.97

Annual energy savings 13,468,454 kWh or equivalent of 1,275,819 m3 of natural gas

Annual CO2 emissions reduction, 3.366 “000” tons

Energy Management

Energy Management Support EM system established, Trainings and package of documents provided

Energy Manager Certification Yes

Residential Energy Efficiency

The HOAs of Sumy are supported by the HOA Advisory Resource Center operating under the “Sumshchyna” HOA Association. Starting from 2015, 184 initiative groups obtained consultations form the resource center. The Resource Center team conducted 172 field consultative and informational meetings with the co-owners of multiapartment buildings. The center is actively involved in HOA Advisory Center public awareness activities. The HOA Resource Center experts conducted 117 training events, including workshops, trainings and round tables. As of September 30, 2017, there have been a total of 218 HOAs established in the City of Sumy.

210 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan

Teplodar

Table 11-35. MERP Partner City Profile (Teplodar)

City Teplodar (Odesa Oblast)

Energy Manager and department - EAs Municipal Energy Systems - Public buildings - Residential buildings - Energy Planning SEAP or SECAP Development No (Yes/No) Project Proposal 1 Modernization of district heating system Project Area District Heating MERP prepared a prefeasibility study for building a heating station using solid biomass fuel for modernization of district heating system Teplodar City. The prosed project cost is USD 2.95 million. In case of successful implementation, Project Description the project allows to produce 15 MWt of heat energy, 600 kWt of electric energy per hour, and generate USD 578,000 of net income annually. The project installation started in 2017 with support from a private investor. Project Value, approx. “000” USD 2,950 Annual savings, approx. “000” USD 578 Annual energy savings 15 mWt of heat energy, 600 kWh per hour

Energy Management

Energy Management Support Yes

Energy Manager Certification Yes

Ternopil

Table 11-36. MERP Partner City Profile (Ternopil)

City Ternopil (Ternopil Oblast)

PAVLO SAVECHKO, Head of Section for Energy Supply, Directorate of Energy Manager and department Housing and Communal Services, Municipal Improvements, and Ecology Contacts: (0352) 525833; [email protected]; [email protected] EAs Municipal Energy Systems Under SEAP preparation Public buildings 93 Residential buildings - Energy Planning

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 211

Table 11-36. MERP Partner City Profile (Ternopil)

City Ternopil (Ternopil Oblast)

SEAP or SECAP Development Yes (Yes/No) SEAP or SECAP summary Period covered 2015 – 2030 Municipal Buildings, Residential Buildings, Municipal Public Lighting, Transport, Sectors covered Water Supply and Wastewater, Energy Production, Solid Waste Value of investment through 2020, 107,490 212pprox.. “000” USD Annual CO2 emissions reduction 102.3 through 2020, 212pprox.. “000” tons Approval Date August 18, 2016 Invested under SEAP (2015-2017), 2,020 212pprox.. “000” USD Projects Development Investment project catalogue / Catalogue of Investment Projects through 2020 Investment Program # of projects 28 projects value, 212pprox.. “000” USD 115,496 CO2 emissions reduction or energy 111.15 savings, 212pprox.. “000” tons Project Proposal 1 Modernization of District Heating System in Ternopil Project Area District Heating

212 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan

Table 11-36. MERP Partner City Profile (Ternopil)

City Ternopil (Ternopil Oblast)

The project envisions installation of individual heating substations, installation of a biofuel boiler, modernization and rehabilitation of existing boilers and sections of networks, and installation of controlling and monitoring equipment. It aims at significantly improving the energy efficiency, reducing energy losses, lowering gas and electricity consumption and improving the quality of heat and hot water supply services in the City of Ternopil. MERP provided project implementation support to communal utility “Ternopilmiskteplokomunenergo” of Ternopil City Council. In particular, this included:  Technical assistance in development of the specifications for the planned procurements: o Lot # 1 – Installation of 8 MW boiler on wood chips along with the condensation unit for fume gas utilization in the boiler house at 3, Kurbasa Street; Project Description o Lot # 2 – Installation of the building level individual heat substations for heating and hot water supply in Ternopil; o Lot # 3 – Arrangement of the system of dispatch management for heat supply process (SCADA) in boiler houses of CU TMTKE; o Lot # 4 – Installation of pumping units and frequency converter in boiler houses of CU TMTKE.  Assessment of Project Implementation Unit status and training of personnel of the Project Implementation Unit on the issues of international procurement (EBRD procurement procedures). Due to timely assistance in 2016, tender procedures started for implementation of the project on modernization of Ternopil heat supply system from the grant funds. The project is valued at EUR 15 million (EBRD loan and E5P)

Project Value, 213pprox.. “000” USD 17,000 Annual CO2 emissions reduction, 10,399 “000” tons

Project Proposal 2 Ukraine District Heating Energy Efficiency Project

Project Area District Heating

The project aims at reconstruction of municipal district heating system to increase energy efficiency, reducing energy losses, lowering gas and electricity consumption and improving the quality of heat and hot water supply services. MERP provided project implementation support to communal utility “Ternopilmiskteplokomunenergo” of Ternopil City Council. In particular, this included: Project Description  Technical assistance in development of the specifications and tender documentation for the planned procurements of services and installation of the building level individual heat substations for heating and hot water supply in Ternopil;  Training of personnel of the Project Implementation Unit on the issues of international procurement (WB procurement procedures). Project will be funded from IBRD and CTF loans

Project Value, 213pprox.. “000” USD 24,600

Project Proposal 3 Thermal modernization of schools and kindergartens in Ternopil

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 213

Table 11-36. MERP Partner City Profile (Ternopil)

City Ternopil (Ternopil Oblast)

Project Area Public Buildings

MERP conducted Eas and prepared a prefeasibility study, which allowed the city to mobilize ~EUR 30.5 million under EIB “Municipal Infrastructure Project Description Development Program” for implementation of energy efficiency measures in public buildings. The complex thermal modernization of 93 public (schools and kindergartens) will result in (on annual basis):

Project Value, 214pprox.. “000” USD ~USD 37 million

Annual savings, 214pprox.. “000” USD USD 1,979,627

Annual energy savings 33,833,412 kWh or equivalent of 3,204,921 cubic meters of natural gas

Annual CO2 emissions reduction, 11,348 tons “000” tons

Energy Management

Trainings and package of documents provided; Energy Management system Energy Management Support established; Improved EMS documentation is submitted to the city and district heading company for review and approval

Energy Manager Certification Yes

Residential Energy Efficiency

The HOAs of Ternopil are supported by the HOA Advisory Resource Center. The Project Resource Center provided assistance to 206 initiative groups. The RC consultants also conducted 114 informational meetings for the co-owners of multiapartment buildings all over the city. The Resource Center consultants organized 77 training events, including trainings and workshops (had several HOA Advisory Center meetings with the city mayor to discuss pressing issues of the condominium activities). As of September 30, 2017, a total of 466 HOAs have been established in Ternopil.

Vinnytsia

Table 11-37. MERP Partner City Profile (Vinnytsia)

City Vinnytsia (Vinnytsia Oblast)

Viktoriia Dembitska, Director, Department for Energy Efficiency, Vinnytsia City Energy Manager and department Council Contacts: (0432) 59-52-66 [email protected]; [email protected] EAs Municipal Energy Systems Under SEAP preparation Public buildings - Residential buildings -

214 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan

Table 11-37. MERP Partner City Profile (Vinnytsia)

City Vinnytsia (Vinnytsia Oblast)

Energy Planning SEAP or SECAP Development Yes (Yes/No) SEAP or SECAP summary Period covered 2015 - 2030 Municipal Buildings, Residential Buildings, Municipal Public Lighting, Transport, Sectors covered Water Supply and Wastewater, Energy Production, Solid Waste Value of investment through 2020, 104,926 approx. “000” USD Annual CO2 emissions reduction 370.2 through 2020, approx. “000” tons Approval Date February 24, 2017 Invested under SEAP (2015-2017 CY) 22,263 approx. “000” USD Projects Development Investment project catalogue / Catalogue of Investment Projects through 2020 Investment Program # of projects 50 projects value 104,787 CO2 emissions reduction or energy 447.02 savings, “000” tons Creation of energy complex on the basis of municipal purification facilities for Project Proposal 1 district heating in Vinnytsia Project Area District Heating Project Value, approx. “000” USD 13,930 Project Proposal 2 Construction of biomass boiler house in Vinnytsia, 13, 600-Richia Street Project Area District Heating Project Value, approx. “000” USD 2,410 Energy Management EMS concept approved by the city council. EM system is established. Trainings Energy Management Support and package of documents provided. Improved EMS documentation is submitted to the city. Energy Manager Certification Yes Residential Energy Efficiency

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 215

Table 11-37. MERP Partner City Profile (Vinnytsia)

City Vinnytsia (Vinnytsia Oblast)

HOA Advisory Resource Center in Vinnytsia (on the basis of Vinnytsia City Council) provides support to activities of the condominiums in the city. Since 2015, 3,798 initiative groups and residents have obtained consultations on establishment and operation of the HOAs. In addition, the Resource Center HOA Advisory Center team held 286 informational meetings on HOA establishment. The Resource Center representatives organized 57 training events. As of September 30, 2017, a total of 467 HOAs have been established in the city.

Yuzhne

Table 11-38. MERP Partner City Profile (Yuzhne)

City Yuzhne (Odesa Oblast)

Dmytro Liubivyi, Deputy Mayor for Activities of Executive Bodies of City Council, Director of Directorate for Housing and Communal Services, Yuzhne Energy Manager and department City Council Contacts: (048)4221290; [email protected]; [email protected] EAs Municipal Energy Systems Under SECAP preparation Public buildings 7 Residential buildings 7 Energy Planning SEAP or SECAP Development Yes (Yes/No) SEAP or SECAP summary Period covered Until 2030 Municipal Buildings, Residential Buildings, Municipal Public Lighting, Transport, Sectors covered Water Supply and Wastewater, Energy Production, Solid Waste Approval Date Not approved Invested under SEAP (2015-2017 CY) - approx. “000” USD Projects Development Support energy-efficient modernization of the system of thermal energy Project Proposal 1 transportation Project Area District Heating The Project prepared EAs and a prefeasibility study of the system of thermal energy transportation in Yuzhne City. The proposed project cost is USD 0.21 Project Description million. If successfully implemented, it is expected to reduce consumption by 849,000 kWt and save ~USD 71,000 on an annual basis. Project Value, approx. “000” USD 210

216 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan

Table 11-38. MERP Partner City Profile (Yuzhne)

City Yuzhne (Odesa Oblast)

Annual savings, approx. “000” USD 71 Annual energy savings 849,000 kWh Project Proposal 2 Improvement of street lighting system Project Area Street Lighting

MERP prepared a prefeasibility study for modernization of outdoor lighting systems of Yuzhne City with LED lights. The proposed project cost is USD 0.14 Project Description million. If successfully implemented, it is expected to reduce consumption of 180,000 kWt, cut СО2 emissions equivalent by 210 tons annually, and save about USD 16,000 each year.

Project Value, approx. “000” USD 140 Annual savings, approx. “000” USD 180,000 kWh Annual energy savings 0.21 Annual CO2 emissions reduction,

“000” tons Project Proposal 3 Reconstruction of water pumping station Project Area Water / Wastewater MERP prepared a prefeasibility study on the water supply and sanitation stations of Yuzhne City. The prosed project cost is USD 0.14 million. The Project Description project, if successful, is expected to reduce consumption by 324,000 kWt and save about USD 18,000 on an annual basis. Project Value, approx. “000” USD 140 Annual savings, approx. “000” USD 18 Annual energy savings 324,000 kWh Energy Management EM function introduced (requires improvement) – specialist in EM city Energy Management Support administration. Energy Manager Certification Yes

Zaporizhzhia

Table 11-39. MERP Partner City Profile (Zaporizhzhia)

City Zaporizhzhia (Zaporizhzhia Oblast)

Viktor Bondarenko, Head of Sub-Department for Energy Management, Department for Economic Development Energy Manager and department Contacts: (061) 224-19-72; [email protected]; [email protected]; [email protected]; [email protected] EAs Municipal Energy Systems Under SECAP preparation

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 217

Table 11-39. MERP Partner City Profile (Zaporizhzhia)

City Zaporizhzhia (Zaporizhzhia Oblast)

Public buildings 100 Residential buildings Energy Planning SEAP or SECAP Development Yes (Yes/No) SEAP or SECAP summary Period covered 2016-2020, 2021-2030 Municipal Buildings, Residential Buildings, Municipal Public Lighting, Transport, Sectors covered Water Supply and Wastewater, Energy Production, Solid Waste Value of investment through 2020, 124,200 approx. “000” USD Annual CO2 emissions reduction 296.2 through 2020, approx. “000” tons Approval Date March 25, 2015 Invested under SEAP (2015-2017 CY) 7,656 approx. “000” USD Projects Development Investment project catalogue / Registry of Investment Projects for 2015-2030 Investment Program # of projects 16 projects value, approx. “000” USD 732,165 CO2 emissions reduction or energy 880.5 savings, “000” tons Implementation of energy saving and energy efficiency measures in Project Proposal 1 public buildings Project Area Public Buildings The Project updated EAs of public buildings and prepared a prefeasibility study for Zaporizhzhia potentially funded by Kreditanstalt für Wiederaufbau (KfW). Two options/projects, consistent with the city’s objectives approved in the SEAP, were proposed for implementation:  Implementation of energy efficiency measures in 40 public buildings (comprehensive thermomodernization) with an estimated value of USD 11 million; the option should achieve up to 70 percent savings of fuel and energy resources, and reduce annual energy costs by ~USD 0.9 million. Project Description  Implementation of energy efficiency measures in 89 public buildings (comprehensive thermomodernization) with an estimated value of USD 28 million; the option should enable up to 69 percent savings in fuel and energy resources, and reduce annual energy costs by ~USD 2.1 million. In September 2017, the Project conducted a meeting with a KfW technical expert. The Project informed KfW that post-signing support will not be provided because the project is nearing completion. The City of Zaporizhzhia was identified as the top candidate for the loan with priority given to thermomodernization of the public buildings.

218 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan

Table 11-39. MERP Partner City Profile (Zaporizhzhia)

City Zaporizhzhia (Zaporizhzhia Oblast)

Project Value, approx. “000” USD 11,000 – 28,000 Annual savings, approx. “000” USD 900 – 2,100 Annual energy savings ~70 percent of savings in fuel and energy resources Annual CO2 emissions reduction,

“000” tons Installation of Individual Heating Stations in the Buildings of the Project Proposal 2 Aleksandrovsky, Voznesensky, Dniprovsky, and Komunarivsky districts of the City of Zaporizhzhia Project Area District Heating At the request of the city, MERP prepared a comprehensive technical analysis and prefeasibility study. The project, valued at about USD 15 million, envisions installation of 1,030 individual heating substations in public, residential, and Project Description tertiary buildings. The estimated energy savings (natural gas and electricity) are about 12,000 kWh on an annual basis. It is expected that the city will use IFI’s resources to implement the project. Project Value, approx. “000” USD 15,000 Annual energy savings 12,000 kWh Project Proposal 3 Improved energy efficiency of 60 public buildings in Zaporizhzhia Project Area Public Buildings MERP conducted EAs and prepared a prefeasibility study for thermomodernization of public buildings (schools, kindergartens, medical Project Description facilities) using EIB funding under “Municipal Infrastructure Development Program”. Preparation included EA of 60 public buildings. Based on USAID Project support, the city mobilized ~USD 19.7 million from EIB. Project Value, approx. “000” USD 19,700 Annual savings, approx. “000” USD 1,083 Annual energy savings 22,344,440 kWh or equivalent of 2,116,611 cubic meters of natural gas Annual CO2 emissions reduction, 6.66 “000” tons Support in implementation of energy efficiency measures in heating Project Proposal 4 system of Zaporizhzhia Project Area District Heating The city plans to mobilize (preliminary approval received) UAH 100 million or ~USD 3.7 million to finance IHS installation. The other projects prepared by MERP included: Project Description  Construction of sludge utilization facility after mechanic dehydration of wastewater at Zaporizhzhia Left Bank Treatment Facilities # 1  Modernization of Zaporizhzhia outdoor lighting system based on use of LED lighting units (with solar energy use) Project Value, approx. “000” USD 3,700 Demonstration Projects

USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan 219

Table 11-39. MERP Partner City Profile (Zaporizhzhia)

City Zaporizhzhia (Zaporizhzhia Oblast)

Development of design and estimate documentation for the project on Project Proposal 1 reconstruction of the heating system in Residential House Project Area Residential Buildings Development of design and estimate for the project on reconstruction of the Project Description heating system in 144-apartment 9-story Residential House at 153A, Charivna street in Zaporizhzhia, Condominium “Charivnuy Svitanok” Project Value, approx. “000” USD 260 Energy Management EMS concept approved by the city council. The implementing entity is not Energy Management Support functional. Trainings and package of documents were provided. Energy Manager Certification Yes Residential Energy Efficiency Activities of the HOAs of Zaporizhzhia are supported by Public Association of Housing and Construction Cooperatives and HOAs “Victoria” Resource Center. Since 2015, the Resource Center team held meetings with 2,615 co-owners of multiapartment buildings and initiative groups to discuss establishment of HOA Advisory Center HOAs. Resource Center representatives organized 107 training events (workshops and round tables), in particular devoted to energy saving and energy efficiency, and HOA law changes. As of September 30, 2017, a total of 866 HOAs operate in the city.

220 USAID Municipal Energy Reform Project (MERP) Report for Activities Ended on March 31, 2018 Hand-Over Action Plan