Deputy Mission Director Speech at the Meeting of International ESCOs and Equipment Producers with Ukrainian ESCOs and Industrial Plant Managers under the Ukraine Industrial Energy Efficiency Initiative (U-IEEI)

Good morning, ladies and gentlemen.  It is a pleasure for me to be here today to open this workshop for promoting energy efficiency partnerships between international and Ukrainian energy services companies.  Your interest and your efforts in developing energy efficiency projects in Ukraine are valued by USAID, and we are committed to supporting the growth of these partnerships.   I would also like to welcome the members of the international trade mission of energy savings companies and equipment producers, who have traveled here from the U.S.  to help us to develop Ukraine’s energy efficiency sector. As we all know, the increasing cost of energy is seriously hampering the economy.  The cost of natural gas alone is rising rapidly and has made modernization efforts both more pressing and more difficult to finance. Ukraine’s industries consume 23.2 billion cubic meters annually or over 30% of the country’s total consumption of natural gas.  In the last year, the price for imported natural gas has increased two-fold and it may well increase again.   Many companies within the most gas intensive industries – which many of you represent -- are now facing a daunting dilemma: to drastically modify operations and cut energy costs or simply go out of business. Faced with this difficult situation, the Government of Ukraine invited the U.S.  Government to help develop a response, which has become the Industrial Energy Efficiency Initiative.  This initiative is being implemented by the U.S.  Agency for International Development (USAID), in cooperation with Ukraine’s Ministry of Industrial Policy and the newly-established National Agency of Ukraine for the Efficient Utilization of Energy Resources. We expect two major outcomes to this program: First, we hope to help participating companies to significantly reduce the amount of natural gas they consume and, second, we hope to establish a model process for other Ukrainian companies -- both service and operating companies -- to quickly emulate.   The current market for energy efficiency services presents great opportunities for energy efficiency service providers and equipment manufacturers. There are numerous Energy Service Companies in Ukraine who already offer comprehensive services to industrial and municipal clients.  However, these companies often lack experience and access to funding sources that can provide low cost financing for energy efficiency projects. We hope that the international trade mission will lead to the development of partnerships between the participants, including joint ventures and joint implementation of projects. USAID is working to stimulate the establishment of such partnerships by offering grants in support of public-private partnership under our Global Development Alliance mechanism. USAID will select the proposals that have the best potential outcome in terms of increasing the sustainability of Ukrainian energy efficiency service practices, such as through project financing and implementation of new technologies, as well as by increasing the production of energy efficiency equipment and appliances.   Today in the audience we have an outstanding group of both local and international experts and business developers in the energy efficiency sector, and so I have no doubt that this meeting will result in new business models and partnerships. With the active participation and commitment of all interested parties, I am confident that we will not only achieve the program’s overall objective but also provide a real energy efficiency showcase for the rest of the country to emulate.