Payback period of local generation loan projects for communities can be from three years - Oschadbank

This was stated by Yuriy Katsion, Deputy Chairman of the Management Board of Oschadbank, during his speech at the annual international conference on energy, Energy Security Dialogue, organized by the DiXi Group think tank. According to him, Oshchad receives many requests from municipalities and businesses to invest in the development of local generation. These requests are based on the experience of long interruptions in heat and electricity supply during the previous autumn and winter, further military threats, and the growing need for environmentally friendly energy sources, which is in line with Ukraine's European choice.

The experience of private businesses proves the practical success and payback of green generation projects, both for self-sufficiency and as a business model.

"The payback period of local generation projects can be  3–4 years for small installations, such as solar panels installed for self-consumption on large roofs. For biogas plants built at household waste landfills, this period can be 4.5–6 years," said Yuriy Katsion.

The main role in the development of decentralized generation, in addition to private business, will be played by municipalities during the war and in post-war Ukraine. For them, this area of development will solve four key tasks at once: energy supply for residents and social facilities, reduction of heat and electricity costs, improvement of the local environment and the possibility of generating additional income.

"Oschad is ready to offer local currency financing for investment projects aimed at developing local green generation at a much lower cost than attracting such financing from international financial institutions and foreign banks, which will include war risks in the cost of the loan product. The cost of financing from Oschad fo large investment projects will vary depending on the risk assessment of each specific project and borrower, but we can expect average rates of 7% in dollars and 6% in euros as of December 2023. Other instruments offered by Oschad, primarily government support programs, can significantly reduce the cost of such an investment project," Yuriy Katsion emphasized.

Over the past six years, Oschad has financed about 760 projects for municipalities, totaling more than UAH 7.7 billion. Many of them were related to energy efficiency, energy saving, and green energy.