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Market Assessment
RESIDENTIAL SECTOR OF UKRAINE:
LEGAL, REGULATORY, INSTITUTIONAL,
TECHNICAL AND FINANCIAL CONSIDERATIONS
FINAL REPORT
August 2011
Prepared for
European Bank for Reconstruction and Development
One Exchange Square,
London, EC2A 2JN
Prepared by:
Reading, Pennsylvania, USA
IB
MunicipalDevelopment
Institute, Ltd.
Kyiv,Ukraine
Oslo,Norway
Framework Contract FC474/EBSF-2010-08-124F
HousingInstitute
Bratislava,Slovakia
ACKNOWLEDGEMENTS
Participants in the project include the following:
Name and Position in Project
Name and Position in Project
WorleyParsons
Municipal Development Institute
Mike DeLallo, Select Director
Alyona Babak, Project Manager
Andrew Popelka, Project Manager
Gennadiy Farenyuk, Civil Engineer;
David B. Stauffer, PE, Documents review
Anatoly Kolienko, Heating Engineer
Jason L. Sweigart, Documents review
Roman Zherdystskyi, Financial Analyst
Raymond Rice, Procurement Specialist
Olga Olefirova, Lawyer
ENSI, Energy Saving International, a.s
Dmitry Levytsky, Lawyer
Trond Dahlsveen, Financial Expert
Ima Khrenova-Shimkina, Economist,
Marketing Specialist
Natalia Grytsenko, Energy Efficiency
Expert
Viktora Pogorelova, Housing Specialist
Lubomir Tchervilov, Energy Expert
Atatoly Nicheporchuk, Civil Engineer
Ministry Steering Committee
Kadria Safiulina, Sociologist
Olga Romanyuk, Deputy Minister of
Housing and Communal Economy
Housing Institute
Larisa Novikova, Head of Section on
Energy saving, Department of Heat
Energy
Jaroslava Zapletalova, PhD, Housing
regulatory expert
Irina Savinkova – Chief specialist of the
heating energy sector development,
Department of Heat Energy
Maria Savchenko-Belska, Chief specialist
of the section of housing economy sector,
Department of Housing Policy
iii
iv
TABLE OF CONTENTS
LIST OF ANNEXES ....................................................................................................... VII
LIST OF EXHIBITS ......................................................................................................... IX
EXECUTIVE SUMMARY ............................................................................................... 11
1.
1.1
1.2
INTRODUCTION .............................................................................................. 19
Background ...................................................................................................... 19
Report Structure ............................................................................................... 19
2.1
RESIDENTIAL SECTOR REVIEW ................................................................... 21
Review of Sector Statistics ............................................................................... 21
2.
2.1.1
2.1.2
2.1.3
2.1.4
2.2
Review of Tariffs............................................................................................... 27
2.2.1
2.2.2
2.2.3
2.2.4
2.2.5
2.2.6
2.3
District Heating .................................................................................................... 27
Electricity ............................................................................................................. 30
Natural Gas ......................................................................................................... 30
Water Supply ....................................................................................................... 31
Wastewater Services........................................................................................... 34
Summary of Tariff Policies .................................................................................. 36
Energy Saving Potential in the Housing Stock of Ukraine ................................. 36
2.3.1
2.3.2
2.3.3
2.4
Housing Stock in Ukraine .................................................................................... 21
Recent Housing Stock Development .................................................................. 23
Construction Activities and Volumes................................................................... 23
Energy Consumption in Ukraine ......................................................................... 25
Selection of Representative Objects ................................................................... 38
Energy Saving Potential ...................................................................................... 38
Assessment of Energy Saving Economic and Market Potential ......................... 42
Legislation on Energy Efficiency in Buildings, EPBD Transposition .................. 44
2.4.1 Main Ukrainian legislation and regulations related to energy efficiency in
buildings ........................................................................................................................... 45
3.
3.1
3.2
OWNERSHIP AND MAINTENANCE ISSUES.................................................. 47
Forms of Ownership ......................................................................................... 47
Models of Ownership and Management in Residential Sector .......................... 47
3.2.1
3.2.2
3.2.3
3.2.4
3.3
Ownership System .............................................................................................. 47
Owners Organization Structures ......................................................................... 48
Land Issues ......................................................................................................... 49
Conclusions ......................................................................................................... 50
Management Models ........................................................................................ 51
3.3.1 General Management Principles ......................................................................... 51
3.3.2 Model 1 - Apartment Building Management by Housing and Maintenance
Organization ..................................................................................................................... 51
3.3.3 Model 2 - Apartment Building Management by a Condominium......................... 53
3.3.4 Model 3 – Apartment Building Management by a Managing Company.............. 54
3.3.5 Model 4 – Apartment Building Management by a Housing and Construction
cooperative (HCC) ........................................................................................................... 55
3.4
3.5
3.6
Comparison of Ukrainian Model With Other Countries...................................... 56
Conclusions...................................................................................................... 57
Recommendations............................................................................................ 58
v
4.
4.1
4.2
RESIDENTIAL INSTITUTIONAL ARRANGEMENTS....................................... 59
Goods and Services in Housing and Communal Services Market .................... 59
Institutional Structures and Their Relationships ................................................ 61
4.2.1 Electricity and Gas Supply Contracts .................................................................. 63
4.2.2 Agreements between Customers and “Producers/Providers” of Housing and
Communal Services. ........................................................................................................ 63
4.2.3 Role of Local Self-Government ........................................................................... 64
4.2.4 Issus to be Addressed......................................................................................... 65
4.3
4.4
Price Setting in Housing and Communal Sphere .............................................. 65
Past Arrangements Used for Contracting and Financing of Building
Reconstruction in Ukrainian Municipalities ....................................................... 68
4.4.1
4.4.2
4.4.3
4.4.4
4.4.5
4.4.6
Project "Sustainable Self-Maintenance of Multi-Family Buildings" ..................... 68
Housing Rehabilitation Project in Nizhyn. ........................................................... 69
Housing Rehabilitation Project in Berdychiv. ...................................................... 70
Housing Rehabilitation Project in the City of Lutsk (2010).................................. 70
Housing Rehabilitation Project in the City of Chernivtsi (2004-2010). ................ 70
Projects Implemented by GTZ (German Technical Assistance Organization) ... 71
4.5
4.6
Summary .......................................................................................................... 71
Recommendations............................................................................................ 71
5.1
FINANCING ARRAGEMENTS FOR ENERGY EFFICICIENCY IN
RESIDENTIAL SECTOR ................................................................................. 79
Residential Sector Market Participants ............................................................. 79
5.
5.1.1
5.1.2
5.1.3
5.1.4
5.1.5
5.1.6
5.1.7
5.2
Contractors - ESCO and Construction Companies............................................. 79
Banks................................................................................................................... 80
Other Financial Institutions – Leasing Companies, Credit Unions...................... 82
Building Managers............................................................................................... 82
Market of Energy Efficiency Equipment Suppliers .............................................. 84
Market of Energy and Other Services Suppliers ................................................. 84
Summary of Findings .......................................................................................... 85
Funding Sources .............................................................................................. 87
5.2.1
5.2.2
Funding from State and Local Budgets............................................................... 87
International Development Assistance - Grants.................................................. 90
5.3
Capacity and Willingness of Residents to Fund Investment Needs................... 91
6.1
6.2
FINANCING MODELS ..................................................................................... 95
General Models ................................................................................................ 95
Credit Line Models............................................................................................ 95
6.
6.2.1
6.2.2
6.2.3
6.2.4
6.3
6.4
6.5
Model N 1: Apartment Block Connected to the District Heating System ............ 97
Model N 2: Apartment Block Not Connected to the District Heating System...... 99
Model N 3: Individual Apartment in the Apartment Block.................................. 100
Model N 4: Single Family House ....................................................................... 101
Energy Efficient Revolving Fund..................................................................... 103
ESCO Models................................................................................................. 104
Conclusions and Recommendations............................................................... 106
vi
LIST OF ANNEXES
ANNEX 1: TERMINOLOGY ............................................................................................................................. 108
ANNEX 2: ENGLISH - UKRAINIAN LEGAL TERMINOLOGY ............................................................................. 110
ANNEX 3: REFERENCES ................................................................................................................................ 116
ANNEX 4: HOUSING STOCK OF URBAN AND RURAL LOCALITIES ................................................................... 118
ANNEX 5: HOUSING STOCK OF URBAN SETTLEMENTS ................................................................................... 119
ANNEX 6: HOUSING STOCK OF RURAL LOCALITIES ....................................................................................... 120
ANNEX 7: GROWTH OF THE TOTAL FLOOR AREA OF THE HOUSING STOCK IN UKRAINE ................................ 121
ANNEX 8: STRUCTURE OF HOUSING STOCK IN URBAN AND RURAL AREA BY FORM OF OWNERSHIP .............. 122
ANNEX 9: STRUCTURE OF HOUSING STOCK IN URBAN AREAS BY FORM OF OWNERSHIP ................................ 123
ANNEX 10: STRUCTURE OF HOUSING STOCK IN RURAL AREAS BY FORM OF OWNERSHIP .............................. 124
ANNEX 11: DISTRIBUTION OF RESIDENTIAL HOUSES BY YEAR OF CONSTRUCTION (AS OF 2001) .................. 125
ANNEX 12: VOLUMES OF HOUSING BUILT BY REGIONS IN 2009.................................................................... 126
ANNEX 13: STATISTICAL DATA ON CONSTRUCTION ACTIVITIES IN 2010 ...................................................... 127
ANNEX 14: HEAT PRODUCTION AND SUPPLY BY BOILER HOUSE IN URBAN AND RURAL AREAS IN 2008........ 128
ANNEX 15: HEAT PRODUCTION AND SUPPLY BY BOILER HOUSE IN URBAN AREAS IN 2008 ........................... 129
ANNEX 16: HEAT PRODUCTION AND SUPPLY BY BOILER HOUSE IN RURAL AREAS IN 2008 ........................... 130
ANNEX 17: HEAT PRODUCTION AND SUPPLY BY BOILER HOUSE IN URBAN AND RURAL AREAS IN 2009........ 131
ANNEX 18: HEAT PRODUCTION AND SUPPLY BY BOILER HOUSE IN URBAN AREAS IN 2009 ........................... 132
ANNEX 20: HEAT PRODUCTION HISTORY ...................................................................................................... 134
ANNEX 21: HEAT AND POWER CONSUMPTION BY NON-RESIDENTIAL SECTOR IN 2008 ................................. 137
ANNEX 23: HEAT AND POWER GENERATION IN 2008.................................................................................... 138
ANNEX 24: USAGE OF SECONDARY FUEL RESOURCES IN 2008...................................................................... 138
ANNEX 25: USAGE OF SECONDARY FUEL RESOURCES IN 2008...................................................................... 139
ANNEX 26: HEAT AND WATER METERING AND CONTROLS IN RESIDENTIAL BUILDING STOCK, 2008............. 140
ANNEX 27: HEAT TARIFFS 2002-2009 .......................................................................................................... 141
ANNEX 28: ELECTRICITY PRICES FOR RESIDENTIAL CUSTOMERS .................................................................. 141
ANNEX 29: NATURAL GAS PRICES FOR RESIDENTIAL CUSTOMERS ................................................................ 142
ANNEX 30: WATER SUPPLY TARIFFS, 2002-2009 ......................................................................................... 143
ANNEX 31: WASTE WATER TARIFFS, 2002-2009 .......................................................................................... 143
ANNEX 32: DISTRIBUTION MATRIX OF RESIDENTIAL BUILDING STOCK ENERGY USE .................................... 144
ANNEX 33: CLASSIFICATION OF MULTI-STORY RESIDENTIAL BUILDINGS IN KYIV, 2004 .............................. 145
ANNEX 34: NORMATIVE MAXIMUM HEAT CONSUMPTION OF MULTI-STORY BUILDINGS ............................... 145
ANNEX 35: DISTRIBUTION OF HOUSING IN URBAN AND RURAL AREA BY TEMPERATURE ZONE ..................... 146
ANNEX 36: DISTRIBUTION OF HOUSING IN URBAN AREA BY TEMPERATURE ZONE ........................................ 147
ANNEX 37: DISTRIBUTION OF HOUSING IN RURAL AREA BY TEMPERATURE ZONE ........................................ 147
ANNEX 38: DISTRIBUTION MATRIX OF ENERGY SAVINGS BY EE MEASURES ................................................. 148
ANNEX 39: DISTRIBUTION MATRIX OF SAVINGS IN MWH ............................................................................ 149
ANNEX 40: DISTRIBUTION MATRIX OF SAVINGS IN MW PER APARTMENT AND FAMILY HOUSES .................. 151
ANNEX 41: BERDICHEV PROJECT COSTS ESTIMATES ..................................................................................... 152
ANNEX 42: BERDICHIV PROJECT FINANCING PLAN ....................................................................................... 152
ANNEX 43: LUTSK PROJECT COST ESTIMATES .............................................................................................. 152
ANNEX 44: BANKS LOAN AND INVESTMENT PORTFOLIO , 2011 .................................................................... 153
ANNEX 45: INTERVIEWS WITH BANKS .......................................................................................................... 157
ANNEX 46: DETAILED DESCRIPTION OF LEGAL AND REGULATORY NORMS FOR PROVISION OF HOUSING AND
COMMUNAL SERVICES ........................................................................................................................ 164
vii
ANNEX 47 – CONTRACTUAL DETAILS OF CONCLUDING LOAN AGREEMENTS WITH CONDOMINIUMS; LEGAL
BACKGROUND FOR LEASE AGREEMENTS .............................................................................................. 181
ANNEX 48: GAP ANALYSIS – LAW OF UKRAINE “ON ASSOCIATION OF CO-OWNERS OF RESIDENTIAL
BUILDINGS .......................................................................................................................................... 186
ANNEX 49: REVIEW OF AMENDMENT OF LAW ON CONDOMINIUMS ............................................................. 187
viii
LIST OF EXHIBITS
EXHIBIT 1: OWNERSHIP OF HOUSING STOCK IN UKRAINE BY FLOOR AREA ................................................... 22
EXHIBIT 2: DISTRIBUTION OF HOUSING STOCK IN THE UKRAINE BY NUMBER OF ROOMS ............................. 22
EXHIBIT 3: AGE GROUPS OF BUILDINGS IN SELECT EUROPEAN COUNTRIES .................................................... 23
EXHIBIT 4: HOUSING CONSTRUCTION VOLUMES IN UKRAINE 1985 - 2008 ................................................... 24
EXHIBIT 5: TOTAL CONSTRUCTION VOLUME CHANGES IN UKRAINE FROM 2009 TO 2010 ............................ 24
EXHIBIT 6: ENERGY CONSUMPTION BY RESIDENTIAL SECTOR IN UKRAINE, 2008 ......................................... 26
EXHIBIT 7: BASELINE ENERGY CONSUMPTION IN RESIDENTIAL BUILDINGS IN UKRAINE................................ 27
.EXHIBIT 8: HEAT TARIFF TRENDS IN DISTRICT HEATING SYSTEMS IN UKRAINE ............................................ 28
EXHIBIT 9: TARIFF AND PRODUCTION COSTS OF HEAT SUPPLY BY THE REGION ............................................. 29
EXHIBIT 10: STRUCTURE OF AVERAGE PRODUCTION COST OF HEAT SUPPLY IN 2009..................................... 29
EXHIBIT 11: WATER SUPPLY TARIFF TRENDS IN UKRAINE ............................................................................. 32
EXHIBIT 12: TARIFF AND PRODUCTION COSTS OF WATER BY THE REGION .................................................... 33
EXHIBIT 13: STRUCTURE OF AVERAGE PRODUCTION COST OF WATER SUPPLY IN 2009.................................. 33
EXHIBIT 14: WASTE WATER TARIFF TRENDS IN UKRAINE .............................................................................. 34
EXHIBIT 15: TARIFF AND PRODUCTION COSTS OF WASTE WATER BY THE REGION.......................................... 35
EXHIBIT 16: STRUCTURE OF AVERAGE PROCESSING COST OF WASTE WATER IN 2009.................................... 35
EXHIBIT 17: SPECIFIC ENERGY USE BY THE RESIDENTIAL BUILDINGS IN ZONE I ........................................... 37
EXHIBIT 18: MAP OF THE CLIMATIC ZONES OF UKRAINE ............................................................................... 37
EXHIBIT 19: DISTRIBUTION OF RESIDENTIAL HOUSING IN CLIMATIC ZONES ................................................... 39
EXHIBIT 20: DISTRIBUTION OF RESIDENTIAL HOUSING STOCK SPACE IN CLIMATIC ZONES ............................. 39
EXHIBIT 21: DISTRIBUTION OF RESIDENTIAL BUILDING AREA IN UKRAINE .................................................... 40
EXHIBIT 22: SPECIFIC ENERGY SAVING POTENTIAL IN RESIDENTIAL BUILDINGS IN UKRAINE ........................ 40
EXHIBIT 23: TECHNICAL ENERGY SAVING POTENTIAL FOR THE RESIDENTIAL BUILDINGS IN UKRAINE .......... 41
EXHIBIT 24: TECHNICAL ENERGY SAVINGS POTENTIAL IN RESIDENTIAL BUILDINGS BY MEASURES .............. 41
EXHIBIT 25: INVESTMENTS ASSOCIATED WITH TECHNICAL ENERGY SAVINGS POTENTIAL IN RESIDENTIAL
BUILDINGS BY MEASURES ...................................................................................................................... 42
EXHIBIT 26: MARKET ENERGY SAVING POTENTIAL ESTIMATES ..................................................................... 43
EXHIBIT 27: ENERGY SAVING POTENTIAL AND ITS ECONOMICAL BENEFITS FOR THE APARTMENT BUILDING
CONNECTED TO DISTRICT HEATING ........................................................................................................ 44
EXHIBIT 28 BARRIERS FOR OBTAINING LOANS .............................................................................................. 57
EXHIBIT 29. RESPONSIBILITIES FOR TARIFF SETTING IN HOUSING AND COMMUNAL SPHERE ........................... 66
EXHIBIT 30 – LEGISLATION ON PRICING OF GOODS AND SERVICES IN HOUSING MARKET ............................. 66
EXHIBIT 31. MODEL 1 – END USER “APARTMENT” OR A BUILDING WITHOUT CONDOMINIUM........................ 73
EXHIBIT 32. PROS AND CONS OF MODEL 1..................................................................................................... 73
EXHIBIT 33. MODEL 2 – END USER BUILDING WITH CONDOMINIUM. ............................................................. 75
EXHIBIT 34: PROS AND CONS OF MODEL 2 ..................................................................................................... 76
EXHIBIT 35: LIST OF ESCOS IN UKRAINE ...................................................................................................... 80
EXHIBIT 36: SELECTED PERFORMANCE INDICATORS OF LARGEST 20 BANKS IN UKRAINE.............................. 80
EXHIBIT 37: SUMMARY OF PRICING PROCEDURE FOR INVESTMENT RECOVERY ............................................. 84
EXHIBIT 38: ENERGY TARIFFS USED IN FINANCING MODELS .......................................................................... 95
EXHIBIT 39: ASSESSMENT OF EE MEASURES FOR MODEL 1. .......................................................................... 98
EXHIBIT 40: ASSESSMENT OF EE MEASURES FOR MODEL 2........................................................................... 99
EXHIBIT 41: ASSESSMENT OF EE MEASURES FOR MODEL 3......................................................................... 101
EXHIBIT 42: ASSESSMENT OF EE MEASURES FOR MODEL 4......................................................................... 102
EXHIBIT 43: ENERGY EFFICIENCY REVOLVING FUND SCHEME.................................................................... 103
EXHIBIT 44: ESCO SCHEME. ....................................................................................................................... 105
ix
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EXECUTIVE SUMMARY
The market assessment study presented in this report provides a comprehensive review of the
residential sector in the Ukraine including statistics related to housing stock energy use, current
tariffs policies, and estimates of realistic and sustainable energy investment potential. The
assessment covers the entire residential sector with a special effort focused on fundamental
issues governing the proper operation, maintenance and reconstruction of multi-apartment
housing stock, including ownership and maintenance models, institutional arrangements, roles
and responsibilities of residents, municipalities the state, and current building maintenance
organizations. Assessment of current institutional arrangements includes financial and legal
framework, and the means of supplying utility services.
The defined scope of the market assessment study specified five distinct tasks. Accordingly,
this report is structured into five main sections, following the requirements of the assignment.
These five sections are listed and discussed further below:
 Section 2: Residential Sector Review
 Section 3: Ownership and Maintenance Issues
 Section 4: Residential Intuitional Arrangements
 Section 5: Financing Arrangements for Energy Efficiency in the Residential Sector
 Section 6: Financing Models
Residential Sector Review
Sector Statistics
The housing sector review was based on available official statistical data1 on housing and
energy consumption maintained by the government of Ukraine, as well as on information
gathered from the EU Commission and from International Energy Agency (IEA) reports. The
residential sector review includes statistics of residential building stock, its recent development
and information on energy consumption. Included are tariffs for heat, electricity, gas and water
as they are a significant factor of economic viability of energy saving measures and are a
prerequisite for the assessment of the energy saving potential in the residential building stock in
Ukraine.
According to the state statistics, the residential building stock of Ukraine in 2009 consisted of
approximately 1,070 million m2 of total floor area in 19.3 million dwellings, with 64.2% of the
housing stock located in urban areas. Nearly 50% of the residential stock in Ukraine is
represented by single family houses. The residential housing stock is in majority - 92.2% owned
privately, 6.3% is in communal ownership and only 1.5% is state owned. The age of the building
stock in Ukraine is similar to the building stock in EU countries. While there are no official
statistics available on energy consumption by residential buildings, available documents
estimate the total energy consumption of the residential sector of Ukraine at 272 million MWh
(2008)
Tariffs
Tariff policies for energy and water in the Ukraine continue to maintain tariffs below their
production cost, which is obviously covered from other sources or subsidies and cross subsidies
of the residential sector by the non-residential consumers.
Residential customers have a much lower heat tariff compared to other categories of
consumers: 220 UAH/MWh (approximately 20 EUR/MWh) in the beginning of 2011. For
residential customers, the average tariff for heat supply has grown in Ukrainian currency by
1
The official statistical data was available only up to year 2009. Data for 2010 will not be available until the end of 2011.
11
184% since 2002. However, in terms of hard currency (EUR), the heat tariffs increased by an
average of 70% since 2002.
Tariffs for electricity for the population in the Ukraine vary from 0.18 UAH/kWh to 0.24 UAH/kWh
with an average of 0.22 UAH/kWh (0.02 EUR/kWh) which is about 4 to 13 times lower than in
the EU. If the electricity prices are converted into Euro denomination, and the latest changes of
prices are considered, it can be seen that the level of their growth varies greatly depending on
the consumption. For all categories of consumers who use less than 150 kWh/month, the
electricity prices in the last five years have decreased by 8%. For consumers who use more than
150 kWh/month, the prices have increased by 20%.
Regarding gas prices for the residential sector - since 1999 it has increased by more than 400%
in local currency. However in terms of hard currency (EUR), the average tariff increase was not
as dramatically (approximately 175%) and they are still much lower compared to what residents
pay in European countries. For an average household in the Ukraine, the current gas price is
72.54 kop/m3 (0.069 EUR/m3) for those inhabitants who consume less than 2,500 m3 of gas per
year and have an installed gas meter, and to 79.8 kop/m3 (0.076 EUR/m3) for those without an
installed gas meter.
In the majority of regions, heat tariffs are set below the cost of heat production and although
officially subsidies do not exist, the difference between the costs and revenues is “covered”
either through cross-subsidies, exploitation of depreciation, or other financial means. This in fact
constitutes tariff subsidy. Subsidized tariffs distort the economic relations in the energy sector,
diminish motivation for investing in energy efficiency in residential housing and it also puts an
unnecessary burden on the state budget. Tariff reform is very important for the introduction of a
functional system similar to the process implemented in Slovakia, considering only limited welltargeted subsidies for economically vulnerable customers.
Energy Saving Potential:
The energy saving potential was determined with respect to the existing residential housing
stock, climatic zones and current available current energy consumption data. The results of the
assessment show a substantial energy saving potential in residential stock in the Ukraine. The
results of the calculations show that the introduction of energy efficiency in existing residential
buildings in the Ukraine may technically result in savings of nearly 136 million MWh/year of
energy, which is approximately 50% of the actual baseline consumption. The monetary value of
the estimated technical savings would be about 29.9 billion UAH (€ 2.6 billion). In terms of CO2
reduction potential – this will correspond to 39 million tCO2. The investment associated with this
technical energy saving potential is nearly 42 billion EUR.
Obviously, this is only a theoretical value, as the reality in implementing the energy efficiency
potential will be substantially lower, determined by the economic performance of energy
efficiency measures and by what is realistically possible to implement under the current market
environment.
Economic energy saving potential in this study was defined as attainable energy savings by
measures that produce reasonable payback of the investment of not more than 10 years.
Considering the current low heat, gas, and electricity tariffs, combined with “regular” market
prices of energy saving measures, only a few energy savings measures are economically
feasible and worth considering for an investment. Among the measures that are economically
feasible under the current conditions are, for example, modern district heating substations with
automatic regulation of heat supply, new automated high efficiency boilers on building level,
temperature controls in the building/apartment, and high efficiency lighting. Based on the
available data and information, it is estimated that the economic energy savings potential would
be approx. 32.6 million MWh per year, resulting in monetary savings of approx. 7.18 billion
UAH (€ 624 million). In terms of CO2 reduction potential this will correspond to 11.1 million
tCO2
12
Based on the experience from other Eastern European countries, the energy efficiency
measures will be introduced gradually over several years (a 5-10 year horizon is likely) with the
penetration rate at a relatively low level, influenced by the availability of funds, availability and
pricing of the energy conservation materials and equipment (as applicable), available manpower
and public knowledge of the investment benefits and knowledge of implementation process. It
was estimated that the market potential over the next 5 years can reach approximately 9% of
total energy consumption, or 11.5 million MWh/year, representing a cumulative present value of
about 2.64 billion UAH (€ 230 million) in savings. The Government of Ukraine might be
interested in providing incentives to the population to invest in energy efficiency measures. Such
incentives can be arranged through the provision of grants to cover part of the investment costs.
Ownership and Maintenance
The residential building sector in the Ukraine is in state, municipal and private ownerships. Law
on Privatization2 provided the basis for privatization of apartments and single apartment
buildings with two or more tenants. Now, the majority of apartments in multi-apartment buildings
are privatized, with only a small number owned by municipalities. In absence of a “single owner”
of the multi-apartment building, the management role is to be assumed by the co-owners. The
relevant laws of Ukraine3 established two types of residential sector management:
 Buildings without established condominiums. Management and maintenance of these
buildings continues to be performed by the municipal maintenance organizations
 Buildings with established condominiums. Management and maintenance of these
buildings is performed or organized by the co-owners.
Privatization implies joint ownership of the common spaces by the new owners together with all
relevant rights and responsibilities4, including the responsibility to share repair and maintenance
costs for the common property, and responsibility for property maintenance. According to the
Law, the apartment owners in multi-apartment buildings may establish associations or unions of
individual apartment/building owners5 in a form of condominium or housing/construction
association, or they may chose not to organize. It should be noted that an important clause of the
Ukrainian Constitution is that participation in any union or association is voluntary. Therefore the
Law does not oblige residents to join any associations, including condominiums or any other
form of housing associations.
Co-owners of apartment buildings who chose to be organized in condominium are capable of
making all decision through the executive body and assume the responsibility for management
and maintenance of their building, as well as for interrelations with utility services providers, etc.
A different, more complicated situation is with the management and maintenance of buildings
without established condominiums (so called, non-organized co-owners). In these cases, the coowners are virtually not capable of making decisions and such buildings are managed and
maintained by housing and maintenance organizations (HMO) – so called Zhek, selected and
engaged by the local self-government.
One of the critical issues associated with the organization of co-owners is the ability to create
and maintain a capital repair fund. While the law requires condominiums to set up a capital
repairs fund6, it does not oblige non-organized owners to establish such fund.
In general the law suggests 4 different management models for apartment buildings, which are
suited for a specific ownership and organization of co-owners. The buildings with organized coowners may choose either Model that suits them the best. For the buildings with non-organized
2
Law of Ukraine on Privatisation of the State Residential Sector No. 2482-ХІІ of 19.06.1992.
3
Law of Ukraine on Privatisation of the State Residential Sector No. 2482-ХІІ of 19.06.1992, Law of Ukraine on
Condominiums No. 2866-III of 29.11.2001.
4
Articles 368 and 369 of the Civil Code of Ukraine.
5
6
Law of Ukraine on Condominiums of 29.11.2001, No. 2866-III
13
co-owners, the local self-government takes over the role of decision-maker and selects the
housing and maintenance organization. This system, while currently widely used, should be
phased out and the organization of co-owners should be promoted through various incentives,
education and mainly by removing legal barriers that hinder the process, including resolving the
issues related to:
 Land transfer to the co-owners,
 Mandatory establishment of a capital repair fund, which is protected from misuse and is
available only for agreed upon repairs,
 Introducing enforcement mechanism of dues payment by owners, and
 Gradual phase out of municipal involvement in private residential housing.
Comparison of the current models of ownership and maintenance of the multi-apartment
residential housing with relatively well functioning models applied in Slovakia shows that several
issues need to be addressed in the Ukraine’s housing policies. Comprehensive gap analysis of
the current Ukrainian Law “On Association of Co-Owners of Residential Buildings” with the
Slovak “Law on Condominiums” as well as with the Slovak Housing Policy shows that it will be
advisable to re-evaluate the approach for renovation of 90% of the privatized residential sector in
the Ukraine and create a legal and financial environment for the apartment owners, which will
allow them to make their own decisions while they are provided with required technical support
and government incentive programs for building stock renovation and energy efficiency.
Residential Institutional Arrangements
The assessment of current residential institutional arrangements provided in this report include
legal and contractual bases for required housing and communal services, description of types
of services provided, types of arrangements used in the past and points out to some
discrepancies in definitions of communal services by the law. The legal basis for contractual
arrangements for providing communal services are set by the Law of Ukraine "On Housing
and Communal Services" which classifies the services into categories according to the service
provided, payment structure and other criteria. Its provisions set the minimum quality standards
as well as the minimum qualifications of the provider. It also sets the user’s responsibilities
related to the payment for the services.
Affairs in the housing and communal sphere are built exclusively on contractual relations,
regulated by requirements for development and approval of tariffs, quality of services, as well as
approval of typical agreements for respective services.
Over the past many years, decisions on providers of housing and communal services were made
in large part by the local self-government bodies. This was mostly due to the fact that the
maintenance companies (ZHEks) were in the role of “intermediary” between the utilities and the
end consumers. Later, the local self-governments allowed utilities to conclude direct contracts
with the end consumers in the multi-apartment buildings.
This system of a vertically integrated monopoly is now used in the majority of Ukrainian localities
with exception of some large cities such as Kyiv, Kharkiv and Lviv, and it is applied to heat
supply, water supply and sewage services. This system is also riddled with many problems, such
as deficiencies in metering, cost of heat allocations to individual apartments in the building, and
metering equipment maintenance and calibration. Moreover, local self-government bodies,
having very limited understanding of the complex ownership system in the multi apartment
buildings mistakenly began defining condominiums as “service providers.” In addition to that, the
Ukrainian mass media also contributed to the misunderstanding of the nature of condominiums
by Ukrainian households, by referring to condominiums as an “alternative to ZHEKs”. One
significant reason for such misunderstanding is the absence of clear requirements and guidance
for condominiums in organizing billing and collection.
Regarding the price setting - practically all prices in housing and communal sphere are subject to
state regulation. There are two exceptions from this rule - the price of management service and
14
the cost of capital repairs are defined by negotiation and shall be documented by respective
contracts.
The assessment of the current institutional arrangements of the residential sector in the Ukraine,
including issues related to the residential buildings (ownership and management, as well as
production, transportation and supply of water, heat, gas, electricity, sewage) showed several
issues that need to be improved to mitigate the current deficiencies in residential sector
operation. A summary of the main problems is as follows:
 Large number of participants defined by legislation for operating in the residential
sector, which significantly complicates understanding of the residential stock organization
by all stakeholders.
 Absence of clear division of responsibilities between the residential market
participants.
 Absence of entity responsible/authorized for making decisions on capital investment
and repairs in the buildings where condominiums are not established.
 Clear definition of jurisdiction of the National Regulator and local self-government to
eliminate redundancy of the regulation for the utilities.
 Payments and tariff setting practices are not meeting all market needs. The provisions
for requirement to contribute regularly to the building capital repair fund, transportation
tariffs and introduction of tariffs for renewable energy need to be improved.
 Improving the system of regulation that eliminates unnecessary and regulates only
natural monopoly services.
Financing Arrangements
This section provides information on commercial structures and availability of funding for
management and financing of energy efficiency investments for the residential buildings, and
describes experience with budgetary and donor funding for residential energy efficiency. It also
provides insight into the willingness and capacity of residents to fund investment needs obtained
through the formation of resident’s focus groups.
Review of the residential housing market has determined that relative to the size of perceived
market, that the Ukraine has a small number of specialized service companies doing business in
the residential housing sphere. The low cost of energy, service pricing policies and low
understanding of the benefits of such services by local self-governments caused ESCO
companies to re-orient themselves to other activities. Nevertheless, the situation is improving
and a number of companies are now active and ready to be engaged in providing housing and
communal services, as well as implementing energy conservation projects. The market is well
supplied with materials and equipment from numerous local and international companies.
While local banks have an active retail portfolio, lending to individuals, small and medium
enterprises, and are interested in lending for energy efficiency project to residents, they point to
lack of collateral and the inability to enforce payments by the condominium members as the main
barrier for lending to condominium as a legal entity.
Funding for energy efficiency improvement of residential housing stock is available under
specific conditions from state and local budgets under programs specifically designed to improve
residential housing and communal services. Substantial assistance is also provided by several
international donor’s programs in the form of grants.
An assessment of the capacity and willingness of residents to invest in energy performance
improvement of their buildings was performed through a survey of apartment building residents,
which showed a positive attitude of the majority of respondents towards the “concept” and a
willingness to invest to energy efficiency through an affordable loan.
Financing Models
15
This section analyses potential financing models that can be used to provide financial resources
for implementing energy efficiency measures in residential building stock in Ukraine. Several
financing models which can be used include: credit lines, an energy efficient revolving fund, and
ESCO models.
Loan financing though credit lines is the most typical model for financing energy efficient
projects, especially in the residential sector. A number of credit line facilities for residential
sectors in Slovakia and Bulgaria showed great success of such a model. However, considering
the legal arrangements, the situation in Ukraine is far behind Slovakia and Bulgaria, which has
created a number of obstacles for attracting loan funding in energy efficient projects in the
residential sector.
Under current conditions in the Ukraine, the Condominium Associations are not treated as a
viable borrower, since the Law of Ukraine does not provide a clear procedure on collecting debts
by the Condominium Associations from the individual owners. This situation has stopped the
Banks from developing activities in this market. Therefore the implementation of the credit lines
model in the apartment blocks will be complicated under current Ukrainian conditions.
Nevertheless the local Banks are interested in penetrating the residential market and are willing
to sign loan agreement with each apartment owner individually.
The Consultant developed different sub-models under the credit line model: starting for
Apartment Block connected to the District Heating System and ending with Single family houses.
Details of the proposed models are given in Chapter 6.
The lending market for implementation of energy efficient measures in the residential sector is
gradually opening up within the Ukraine. At the same time, there are a number of legal obstacles
related to Condominium Associations in multi-apartment buildings, which were mentioned above,
to open a broader market for such lending. Therefore the Government of the Ukraine will need to
take action as soon as possible with regards to improving laws on Condominium Associations to
make them viable borrowers for the local banks.
Financial education for consumers and education of the bankers with regards to investment in
energy efficiency in the residential sector also needs to be addressed in Ukraine. As seen in
other countries by international donors, the local banks will need extensive training and handholding before they will be willing/able to lend to energy efficiency projects in the residential
sector. Implementation capacity is often considered as one of the major barriers for establishing
a proper framework for energy efficiency in the residential sector.
Another possible models for energy efficiency investment are revolving funds that offers loans
under soft conditions, which are repaid from energy savings. The funds can function similar to
credit lines, and therefore would have similar barriers. In addition to these barriers, the
establishment of the Revolving Fund would require a longer time for negotiations with the main
stakeholders to establish it as a transparent financial vehicle with clear operational procedures.
The ESCO model usually includes energy auditing, arranging financing, implementation or
supervision of the implementation of the proposed measures, equipment commissioning,
maintenance of the installed equipment, measuring and verification of the savings. These
activities are usually done through the Energy Performance Contract (repayment of the
investments through the guaranteed energy savings). The ESCO model is one of the solutions
that in many markets of Europe have proved to be efficient. Whilst the ESCO is typically
considered as a good model for implementing energy efficient projects and developing the
market of energy efficient services, it is also regarded as a complicated solution, as ESCO needs
to settle down all issues related to the whole lifetime of the project, including measuring and
verifying the savings, transfer of ownership and other.
ESCO models require expertise in engineering, law and finance, and that building owners
understand how to organize and operate such scheme with energy performance contracting.
Substantial training will have to be introduced to ESCOs and Condominium Associations
(OSBBs) to be able to mutually benefit from implementation of this model.
16
Under current Ukrainian conditions, ESCO model will have additional challenges to function
mainly related to complicated and unclear procedures for Energy Performance Contracting
(related to the application in apartment block buildings): interconnection of tariffs for communal
services; schemes for investment repayment by each apartment; connection of communal
services tariffs with subsidies for the inhabitants with low income.
Therefore the Consultant proposes the preferable financing model for energy efficiency projects
in the residential sector of Ukraine to be the Credit line model.
Conclusions
The residential market assessment study of all significant aspects that influence the
developments in housing and communal services in the Ukraine is supported by a significant
amount of data and information on technical, financial and legal issues and by information on
current trends in management and maintenance of the housing stock and related communal
services. It is without surprise that the current situation is not ideal and that substantial
improvements are needed to guide the development in the right direction. As the most significant
issues, the team has identified the following:
1. The complex issue of renovation of residential housing stock and the introduction of energy
efficiency will require a complex, well designed “Master Plan” that will consider and address
all relevant issues affecting development in housing and communal services market and will
be used as a “road map”. It is suggested that the Ministry of Construction and Regional
Development, Housing and Communal Economy leads the preparation of such a plan.
2. The legal framework governing the housing and communal services market is often
confusing and ineffective, and in some instances contradicting. It is strongly suggested that
the lawmakers utilize experience from neighbouring countries and amend the current laws or
develop new, more effective legislation.
3. The role of the state and local self-government in management of private residential housing
should be gradually reduced and directed towards the role of influence by incentives.
Available state and municipal funds should be used for developing incentives for
implementation of energy efficiency projects based on competitive selection. The co-owners
of multi-apartment buildings should be encouraged and supported in taking responsibility for
their own assets.
4. Establishment and full functionality of association of apartment owners should be
encouraged and incentive programs should be introduced with support of government and
utilizing the programs of international donors. Public awareness activities, including best
international practices should also be part of the effort.
5. Implementation of energy efficiency in multi-apartment buildings is currently driven mostly by
the desire of occupants to improve indoor comfort conditions due to low quality of heat
supply. Low energy tariffs do not provide incentive for energy efficiency investment based on
its economic merit. A socially sensitive approach and implementation plan to market-wide
establishment of full cost recovery tariffs, accompanied by consideration of protection for
vulnerable population should be developed and gradually implemented.
17
18
1.
INTRODUCTION
1.1
BACKGROUND
Building on a successful approach for providing the financing for residential energy efficiency
investment that was applied in Slovakia and Bulgaria, and with an intention of creating an
enabling environment and the demand for a similar financial vehicle in the medium term, EBRD
under the agreement with the Ukrainian government initiated its support with developing a web
based information platform and by implementing a comprehensive assessment of the residential
sector in Ukraine.
One of the major constraints for financing residential energy efficiency is a lack of a supportive
legal and regulatory framework. In order to understand the current legal, regulatory and
institutional framework of the urban housing stock in the Ukraine and relevant technical,
financing and economic aspects, a gap analysis study was performed which provides insight on
how financing products could be structured in the existing legal environment and how existing
legislation needs to be optimized.
The Market Assessment Study provides a comprehensive review of the residential sector in the
Ukraine including statistics related to housing stock energy use, energy efficiency potential,
current tariff policies and discussion on sustainable energy investment potential. The
assessment focused on fundamental issues governing the proper operation, maintenance and
reconstruction of multi-apartment housing stock, including ownership and maintenance models,
institutional arrangements, roles and responsibilities of residents, municipalities and the state, as
well as current building maintenance organizations. The assessment of current institutional
arrangements includes the financial and legal framework, and the means of supplying services
and commodities.
The assessment of current practices and availability of financing for energy efficiency includes
identification of potential sources of financing for improving energy efficiency in residential block
housing, the capacity and willingness of residents’ to contribute directly to investment needs, the
interest and capability of local banks to provide financing for residential building improvements,
and the interest and capability of utilities to support energy efficiency by financing improvements
recovered through utility bills. Potential financing models for residential building stock were also
evaluated.
1.2
REPORT STRUCTURE
The defined scope of the study specifies five distinct tasks to be performed. Accordingly, this
report is structured into five main sections, following the requirement of the assignment.
Section 2 provides information on residential sector statistics related to the housing fund of the
Ukraine and provides a summary of statistical information. The statistics is analysed for the last
10 years (1999 to 2009).
Section 3 provides information on issues of ownership and maintenance of multi- apartment
residential buildings, models currently used for maintenance and for providing communal
services. It also provides comparison of the Ukrainian and Slovak models and approaches.
Section 4 provides information on residential institutional arrangements that include legal and
contractual bases for required services, types of arrangements used in the past for contracting
and for financing of building reconstruction in the Ukraine, and provides an assessment of
existing procedures in the decision making process regarding the building reconstruction effort.
Section 5 provides information on current housing policies and regulations related to investment
by apartment owners, management by condominium associations, contracts for supply of
services and commodities, funding options for energy efficiency, funding for general capital
19
repair, and different options for structuring the financing through performance contracts, grants
and bank loans.
Section 6 analyses potential financing models that can be used to provide financial resources
for implementing energy efficiency measures in residential building stock in the Ukraine.
During the performance of the Market Assessment, a large quantity of valuable information was
collected and used for analysis in all aspects of the residential housing and communal services.
Selected information that was deemed important is included in the Annexes to this report.
Terminology and vocabulary of terms used throughout the report is provided in Annex 1 and in
Annex 2.
20
2.
RESIDENTIAL SECTOR REVIEW
2.1
REVIEW OF SECTOR STATISTICS
This section provides a review of residential sector statistics related to the housing stock of
Ukraine and provides a summary of information including the number of residential buildings,
non-residential buildings and dormitories; urban and rural housing stock; number of flats;
housing construction rates; total floor area; energy use in terms of overall annual heat utilization,
fuel and electricity consumption, and also provides information on how energy use is measured.
The statistics is analysed for the last 10 years (1999 to 2009). A comparison of select sector
statistics for the Ukraine with several European countries is also provided in this section.
2.1.1
Housing Stock in Ukraine
According to the state statistics as of January 1, 2010 the housing stock of Ukraine consisted of
1,070 million m2 of the total floor area, including 1.7 million m2 of housing stock that was on the
balance sheet of bankrupt enterprises, which went bankrupt over the last several years and
enterprises that terminated their activity, as well as 30.3million m2 of unoccupied houses. On
average, there are 22.5 m2 per inhabitant. Compared to European countries, for instance
Germany, where the average area per person is 40.1 m2 (according to statistics 2002), while the
same indicator for the Czech Republic and Slovakia is approximately 27 m2 and for Latvia and
Lithuania – approximately 23 m2 per inhabitant.
As of January 1, 2010, there are 19.3 million dwellings in Ukraine. This implies an average
residential area per dwelling in the Ukraine of approximately 55 m2. Comparing with European
countries: Germany has nearly 90 m2 per dwelling, Czech Republic - approximately 76 m2,
Slovakia - approximately 56 m2, Latvia approximately - 55 m2, and Lithuania approximately - 61
m2 per dwelling.
The housing located in urban areas represented 64.2% of the total housing stock. Nearly 50% of
the residential stock in the Ukraine is represented by single family houses. The space of
dormitories and residential premises in non-residential buildings in the total housing stock
constitutes only 1.9% or 20.7 million m2.
The number of buildings that have more than 5 stories is 79.3 thousand, 78.3 thousands of
which are located in urban areas.
Occupancy averages 2.4 persons per dwelling. A comparison with European countries shows
that this indicator is quite close: for Germany – 2.1 persons per dwelling, for Latvia – 2.5 persons
per dwelling (according to statistics of 2004).
By the number of rooms, dwellings are distributed as following:
 19.3% - single room apartments
 37.2% - two rooms apartments
 33.0% - three rooms apartments,
 10.5% apartments with four and more rooms.
The average number of rooms per dwelling in the Ukraine is approximately 2.3, while for
Germany this indicator is 4.4, for Check Republic – approximately 3, Slovakia – 3.2, Latvia – 2.4,
Lithuania – 2.5.
As of the beginning of 2009, the ownership of the housing stock was distributed by number floor area
as follows:
 92.2% - privately owned
 6.3% - communal ownership
 1.5% - state ownership
21
As of January 1, 2009, the housing stock comprised 10,148,900 houses (building structures).
This number includes 9,800 houses on the balance sheet of bankrupt enterprises, those entities
that terminated their activity, as well as 598,700 unoccupied houses throughout the country.
General data on the housing stock of Ukraine and in its breakdown by regions as registered by
official statistics on January 1, 2009 are shown in Annex 4. The indicated information on urban
settlements and rural localities are provided in Annex 5, and Annex 6, respectively. The growth
of the total floor area of the housing stock in the Ukraine, in urban and rural areas for the past
18 years is shown in Annex 7.
The distribution of ownership of the housing stock in urban and rural areas as of January 1,
2009, [1] is shown in Annex 8, Annex 9 and Annex 10. The housing stock data provided in the
annexes do not include the housing stock on the balance sheet of bankrupt enterprises and
those that have completely terminated their activity. Data provided in Annex 4 through Annex 6,
are data on the general and residential space of apartments (residential premises) and are
indicated according to the rules set by the Substantive Provisions for Houses and Buildings [27].
The ownership distribution of the housing stock of Ukraine as recorded on January 1, 2009, [1] is
shown in Exhibit 1.
Exhibit 1: Ownership of Housing Stock in Ukraine by floor area
1.5%
6.3%
92.2%
State
Source [1]
The distribution of the total number of apartments in the housing stock of Ukraine and their total
floor area broken down by the number of rooms per dwelling as of January 1, 2009 [1] is shown
in Exhibit 2
Exhibit 2: Distribution of Housing Stock in the Ukraine by Number of Rooms
4-room
9%
1-room
19%
3-room
33%
5-room &
more
2%
2-room
37%
Source [1]
As of January 1, 2010, the number of buildings in urban area was 4,050,444 (or approximately
4.0 million) including 9,975 of dormitories.
22
For comparison of the Ukrainian building stock ages with other European countries, Exhibit 3
presents information on the same age categories as in Germany, Czech Republic and Lithuania.
Information is based on a 2008 European Commission Report [32]. Detailed information on the
year of construction for residential houses in Ukraine as of January 1, 2001 is provided by
regions in Annex 11.
Exhibit 3: Age groups of buildings in select European countries
Built period
Before 1919
Between 1919-1945
Between 1946 –1970
Between 1971-1980
After 1981
Ukraine
5%
13%
51%
16%
15%
Germany
14 %
14%
46%
13%
13%
Czech Rep
11%
14%
25%
22%
28%.
Lithuania
6%
23%
33%
18%
20%
% is defined from the number of buildings
As the data shows, the age of the building stock in Ukraine is similar to the building stock in EU
countries.
2.1.2
Recent Housing Stock Development
During 2009, a total of 6,399,600 m2 of the housing floor area was commissioned, which is 39%
less than the previous year. This reduction was mostly due to the reduction of individual housing
construction volume by 60.8%, noting that the share of construction of individual housing
represented 35.7% in 2009 and 55.6% in 2008. Out of the total commissioned housing, an
overwhelming share of 80.7% was located in urban settlements. Even so, when compared to the
previous year, its volume was reduced by 32.4%. In rural areas, the volume was reduced by
56.7%. Compared with 2008, housing construction was reduced in 25 regions of the country,
most of all (by 85.9%) in Lugansk Oblast, as well as in Kherson and Zhytomyr Oblasts – by
67.3% and 64.1% respectively. At the same time, volumes of new housing increased in Kharkiv
Oblast and Sevastopol City. Detailed information on the volume of new housing in 2009 by
regions is shown in Annex 12.
One quarter (25%) of the total volume of new housing was built in Kyiv City and in Kyiv Oblast,
33.2% in 5 regions (Odesa, Kharkiv, Lviv, Ivano-Frankivsk Oblasts and in the Autonomous
Republic of the Crimea). In rural localities, 1,237,100 m2, or 19.3% of the total volume of new
housing was constructed. Thus, the share of housing built in rural areas is the largest in the Kyiv
Oblast with 49.9% of the total volume in the region, followed by Zhytomyr (45.3%) and
Zakarpattia Oblasts (43.0%). On the low side, Donetsk, Kharkiv and Mykolaiv Oblasts make up
only 4.7%, 5.1% and 7.0%, respectively.
In 2009, a total of 107,600 m2 of housing stock was built with state funds, which is 37.6% less
than in 2008. The share of housing built by state funds represents only 1.7% of the national
volume (1.6% in 2008).
During 2009, 65,600 apartments were completed and commissioned. The average size of the
apartments is 96.1 m2 of total floor area, whereas in the urban areas it is 90.0 m2 and in rural
areas it is 133.4 m2. Approximately one third ( 33.9%) of newly built apartments have two (2)
rooms, 26.6% have one (1) room, 25% are with three (3) rooms and 14.5% are with four or more
rooms.
2.1.3
Construction Activities and Volumes
The construction volume of the housing stock was greatly influenced by the economic situation in
the Ukraine. The relatively high construction volumes experienced in the late 80’s sharply
declined until year 2000, followed by stagnation and a modest increase in recent years. The
construction volume of housing stock during the period of 1985 through 2008 expressed in
thousand m2 of newly constructed space is shown in Exhibit 4 [28].
23
Exhibit 4: Housing Construction Volumes in Ukraine 1985 - 2008
25000
20000
тис.кв.м
15000
10000
5000
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
0
Рис.1.1
Source: [28]
During the last two years, the construction activities in Ukraine, including the housing stock
construction have experienced yet another decline. In 2008, the volume of housing stock
construction was 1% of the total housing stock (10.5 million m2), in 2009 – 0.61% (or 6.4 million
m2) and in 2010 – 0.88% (9.4 million m2). In January 2010, construction companies performed
UAH 1.5 billion worth of construction work, which presents a 24.1% decline compared to
January 2009. The overall picture summarizing the increase/decline of construction volumes in
the Ukraine in all regions is presented in Exhibit 5 [29].
Exhibit 5: Total Construction Volume Changes in Ukraine from 2009 to 2010
Poltavska
Dnipropetrovska
39.2
15.1
Volynska
Zaporizka
Luganska
Odeska
Zhutomyrska
Kharkivska
Kirovogradska
-4.9
-9
-9.8
-10.9
-12.3
-12.6
-18.1
UKRAINE
c. Kyiv
Lvivska
-24.1
-27.4
-30.6
Ternopilska
Rivnenska
Donecka
Mykolaivska
Khersonska
c. Sevastopol
Khmelnytska
Sumska
AR Crimea
-32.2
-33.8
-35.1
-37.1
-37.8
-38.6
-40.2
-40.7
-42.1
Vinnytsa
Zakarpatska
I.-Frankivska
Cherkaska
Chernigivska
Kyivska
Chernivecka
-43.3
-44.7
-46.3
-46.9
-47.4
-55.7
-66.8
-80
-70
-60
-50
-40
-30
-20
-10
0
10
20
30
40
50
% change from January 2009 level
Source: [28]
24
In general terms, the construction companies in 25 Ukrainian regions experienced decline in
their annual construction volumes. The most dramatic decline of construction activities was a
reduction of 66.8%, mostly caused by cutback on construction works of Dniester Hydro-Nuclear
Power Plant in Chernivtsi Oblast, followed by the 55.7% decline in Kyiv Oblasts mostly caused
by the reduction related to construction of non-residential premises, highways and main
pipelines. On the other side, a 39.2% increase in construction volume was created in the Poltava
region, mostly due to reconstruction and major repairs of gas pipelines and explorative drilling
work. Also, the Dnipropetrovsk Oblast had a 15.1% increase in construction activities due to
construction of an electric steel-making complex at LLC "Metallurgical factory "Dniprostal", a coal
crusher at OJSC "Heidelberg Cement of Ukraine" (Kryvyi Rig), as well as work related to repair
and laying of railways at the "North Metallurgical enrichment plant (MEC)" and "Central MEC".
Overall, more than 60% of the total construction volume was performed by construction
companies from 5 regions of the country (Kyiv, Kharkiv, Poltava, Donetsk and Dnipropetrovsk
Oblasts). The volume of the construction work performed in the Ukraine in 2010 is characterized
by the type of construction activity as shown in Annex 13.
Reduction in construction volumes in January 2010 is mostly attributed to the decline in volumes
by companies involved in construction of buildings, as they represent 80.0% of the construction
activity. Companies involved in other civil works, such as construction of bridges, tunnels, and
underground structures also contributed to the overall decline. At the same time, construction
volume of companies engaged in the construction of power generation, mining and processing
industries increased by 42.6%, and the construction volume of main pipelines, communication
and power supply networks increased by 6.8%.
As estimated by the Chairman of National Realtors’ Board of Ukraine, the average price of 1 m2
of housing in the primary market is 1,100 EUR, and in the secondary market – 900 EUR.
There is no official data on the quantity of the thermo-modernization works of residential
buildings. Similarly, the available statistical data does not allow for one to estimate the fraction of
housing floor area in the total floor area within the existing buildings in the Ukraine.
2.1.4
Energy Consumption in Ukraine
Compared to any other separate sector in the Ukraine, the residential sector is one of the largest
consumers of energy, representing about 29.7% of the total final consumption (TFC) in 2008 with
272 million MWh, or 23.4 Mtoe. This figures did not fluctuate significantly over the past 10 years
and the share of the residential sector in TFC remained around 30 % (or about 24 Mtoe) for
every year following 2001 (Source IEA, data for 2002-2008). Consequently, in absence of the
data for the most current year, the constant pattern of residential sector consumption allows the
use of 2008 as a baseline year for further analyses.
The share of natural gas in the final residential consumption grew from 35% of the total
consumption in 1993 to 55% in 2004 and 59 % in 2008. This increase in consumption is likely
driven by the low price of natural gas. The remaining share of the heating of the residential
sector is covered by district heat supply (19 %), electricity (11%), coal (6%), oil (3%), and
renewable resources including waste (2 %).
Official statistics on the energy use in Ukraine do not include information on energy consumption
by residential sector. Only limited information on heat supply for the residential buildings by heatonly boiler houses exists, however it does not provide any information on the distribution of heat
consumption for space heating or water heating, or information on heat consumption by specific
categories of buildings. The 272 million MWh TFC is consumed by the residential building stock
of 1,066 million m2. The energy consumption of the residential buildings is provided by sources
listed in Exhibit 6 below:
25
Exhibit 6: Energy consumption by Residential Sector in Ukraine, 2008
Energy Source
Coal and Peat
Oil Products
Gas
Combustible Renewable and Waste
Electricity
Heat
Total
ktoe
1,407
667
13,822
422
2,674
4,403
23,394
MWh
16,363,410
7,757,210
160,749,860
4,907,860
31,098,620
51,206,890
272,072,220
%
6
3
59
2
11
19
100
Source: IEA, Energy statistics, 2008 Energy balance for Ukraine
In addition to information provided by the IEA, the Ministry of Housing and Communal Services
of Ukraine provided data on the production and sale of heat from boilers-only and in the regions
broken down by urban and rural areas. Detail data for 2008 is provided in Annex 14, Annex 15
and Annex 16, and for 2009 in Annex 17, Annex 18 and Annex 19. The total heat generated by
local boilers and heat received from other sources consists of heat provided to consumers, heat
for the plant’s own consumption and loses. Heat from boiler houses is delivered to consumers
(population, for communal and household needs, for production needs) and to other enterprises.
The available data indicate that approximately 86% of the heat produced by the district heating
boilers is sold to the population, approximately 11% is consumed by the boiler plants for their
own needs, and approximately 3% are regarded as losses.
The development of key indicators of production and supply of heat in boiler houses in the
Ukraine during the period of 1997-2009 is provided in Annex 20. The data presented for recent
years shows a trend towards a gradual reduction of heat consumption and consequently lower
heat production. Thus, in comparison with 1997, 40% less heat was produced and 50% less heat
was supplied to the final users.
Heat and electric power consumption by industry and by non-residential users in the Ukraine in
2008 is presented in Annex 21, Annex 22 and Annex 23. The level of utilization of other energy
resources in 2008 is presented in Annex 24 and Annex 25. Information on metering equipment
in the housing stock is provided in Annex 26.
Considering the lack of sufficient information from official statistic and from other resources for
residential stock energy consumption in Ukraine, energy consumption by representative
buildings in all four climatic zones covering Ukraine was developed using energy consumption
computer modelling7 performed in accordance with the methodology provided by EN ISO 13790.
The results of modelling and iteration that correlate the building stock distribution statistics
versus the final energy balance and software simulations results are presented in Annex 32. The
computer models were using the thermal characteristics of representative buildings, building
age, type and meteorological data for all four climatic zones in the Ukraine. Additional
information on developing baseline consumption for energy saving potential assessment is
provided in Section 2.3 of this report. Summary results are presented in the Exhibit 7:
7
EAB software developed by ENSI International was used for the modeling
26
Exhibit 7: Baseline energy consumption in residential buildings in Ukraine
Buildings
Residential sector, specific
annual energy consumption,
2
kWh/m year
Residential sector, annual
energy consumption, MWh
Zone I
Zone II
Zone III
Zone IV
209.6 – 326.5
187.5 - 294.3
148.4 - 261.2
139.0 – 226.3
179,356,307
56,465,521
29,252,114
7,194,799
Grand total, MWh, rounded
272,200,000*
* Deviation from the baseline statistic is less than 0.1%.
The baseline energy consumption for the residential sector in the Ukraine is based on the
statistical data of actual energy use in the residential sector as available from IEA, Energy
statistics, 2008 Energy balance for Ukraine. This statistics do not reflect the actual indoor
(dis)comfort and operation of building services, which very often in Ukrainian residential buildings
do not correspond to normal comfort level. The reality is that during the cold period, apartments
are often under-heated, which causes “unwilling energy saving”. Should normalized indoor
climate and building services be considered, the baseline energy consumption would very likely
increase by 50-100%. This assumption can be partially confirmed by the IEA Energy Policy
Review of Ukraine for 2006, where statistics show a reduction of energy consumption in the
residential sector of 50% during the period 1993 - 2004, which most probably was achieved at
the expense of the low indoor comfort, not by energy performance improvement of buildings.
2.2
REVIEW OF TARIFFS
2.2.1
District Heating
The weighted average tariff for district heating services in the Ukraine in 2009 was
198 UAH/MWh (229.8 UAH/Gcal) or approx 18 EUR8/MWh. Among the customer categories, the
highest tariff in 2009 was for budgetary customers at 371 UAH/MWh (432.01 UAH/Gcal) or
approximately 34 EUR/MWh. The tariff for “other” (non-budgetary, non-residential) customers in
2009 was 338 UAH/MWh (393.7 UAH/Gcal) or approximately 31 EUR/MWh. A much lower
average tariff was set for residential customers: 153 UAH/MWh (179.45 UAH/Gcal) or
approximately 14 EUR/MWh in 2009, and 220 UAH/MWh (approximately 20 EUR/MWh) in the
beginning of 2011. Detailed information on the DH tariffs is provided in Annex 27.
The trend of the weighted average tariff for district heating in Ukraine, as presented in Exhibit 8
shows that since 2005 that the tariffs have grown by 251%. The highest growth of 48% per year
was in 2007, when the weighted average tariff rose from 89.73 to 133.22 UAH/GCal (from 13 to
19.3 EUR/GCal). If converted into Euro denomination, the weighted average tariff for district
heating since 2005 has grown from 10.2 to 21.2 EUR/Gcal. This constitutes an increase by
107%.
By customer categories, the highest growth since 2002 can be observed for the average tariff on
district heating services for budgetary customers, which grew by 349% in Ukrainian currency.
Since 2002 the tariff for budgetary customers has been significantly higher than for the
residential customers, and since 2005 has remained the highest tariff of the customer categories.
8
In this section the conversion of tariff values from UAH to Euro has been done using the average exchange rate for
the corresponding period, as published on the website of the National Bank of Ukraine www.bank.gov.ua
27
For the past 5 years the tariff for budgetary customers has remained significantly higher than the
weighted average tariff.
.Exhibit 8: Heat tariff trends in district heating systems in Ukraine
400
350
UAH/Gcal
300
250
200
150
100
50
0
2002
2003
2004
2005
Weighted average
2006
Residents
2007
Budgetery
2008
2009
Others
2002 – 2009, UAH/Gcal; Source [29]
For residential customers, the average tariff for heat supply has grown in Ukrainian currency by
184% since 2002. However, it should be noted that in terms of hard currency (EUR), the heat
tariffs increased in average by 70% since 2002. The highest growth occurred in 2007, when the
tariff rose by 43% in going from 80.77 to 115.2 UAH/Gcal (from 11,7 to 16,7 EUR/Gcal). Since
2002 the tariff on district heating for residential customers has been the lowest among all the
customer categories. The residential customer category is the only customer category where the
tariff remained below the weighted average tariff.
As can be seen from Exhibit 9, when comparing the regions of the Ukraine, the highest
operational costs are in Zakarpatska oblast (533.52 UAH/Gcal or 49 EUR/Gcal), the lowest are
in Mykolayivska oblast (215.46 UAH/Gcal or 19 EUR/Gcal). The highest heat tariffs for
population are observed in Zakarpatska oblast (335.69 UAH/Gcal or approx. 30 EUR/Gcal),
Ivano-Frankivska oblast (297.92 UAH/Gcal or 27 EUR/Gcal) and Chernivecka oblast (292.13
UAH/Gcal or approximately 26 EUR/Gcal). The lowest tariffs can be seen in the city of Kyiv
(148.95 UAH/Gcal or approximately 14 EUR/ GCal), city of Sevastopol (186.76 UAH/Gcal or
approximately 17 EUR/Gcal), and in Rivenska oblast (196.24 UAH/Gcal or approximately 18
EUR/Gcal.).
Comparing heat prices in the Ukraine with heat prices, for instance, in Bulgaria (0.05 EUR/kWh)
- the prices in the Ukraine are on average 2.5 times lower. If compared with Germany – the
Ukrainian prices are 3.5 times lower.
In terms of cost coverage, the tariff in Ukraine does not cover the operational costs in the
majority of regions. Only in the single region of the Chernivecka oblast does the tariff cover
operational costs. Operational costs are least covered by tariffs in the following regions: city of
Sevastopol oblast (where the tariff is below operational costs by 45%), city of Kyiv (below costs
by 44%), and Zakarpatska oblast (below costs by 37%).
28
Exhibit 9: Tariff and production costs of heat supply by the region
Zakarpatska
335.69
Ivano-Frankivska
533.52
297.92
c. Sevastopol
352.67
186.76
338.59
Donecka
264.70
Kirovogradska
260.65
Khersonska
326.35
325.65
297.34
Lvivska
322.29
285.89
320.09
Dnipropetrovska
254.32
318.42
Luganska
257.44
318.29
Odeska
300.68
Crimean AR
318.12
256.18
Vinnitska
314.70
279.64
Sumska
304.54
285.79
Volynska
268.67
Cherkaska
270.14
Zhytomyrska
301.23
296.45
288.32
236.30
Chernigivska
283.03
250.72
Chernivecka
278.36
292.13
Ternopilska
273.07
253.83
Khmelnytska
270.56
239.27
c. Kyiv
267.85
148.95
Poltavska
265.41
243.15
Kyivska
261.49
234.69
Kharkivska
256.83
239.41
Zaporizhska
231.43
Rivenska
196.24
Mykolayivska
218.58
208.93
0
255.91
233.70
100
215.46
200
300
Weighted average tarif f
400
500
Operational Costs
2009, UAH/Gcal; Source [29]
The build up of average operational costs of district heating services in the Ukraine is provided in
Exhibit 10. The most significant operational cost component is the fuel costs at 53% of all the
operational costs. The next highest value is remuneration of labour, which constitutes 14% of the
total operational costs. These two categories compose the majority of the operational costs (67%
altogether), and as such have the highest influence on the financial state of the district heating
enterprises of Ukraine. Out of the rest, the largest operational cost components are electricity
costs (7%), other operational costs (6%), purchased heat (5%), social charges (5%). Below the
value of 5% are other material costs (4%), depreciation (3%), and purchased water (2%).
Exhibit 10: Structure of average production cost of heat supply in 2009
Other material costs;
4%
Purchased w ater; 2%
Remuneration of
labour; 14%
Social charges; 5%
Amortization; 3%
Purchased heat; 5%
Other operation costs;
6%
Electricity; 7%
Fuel; 53%
Source [29]
Information about responsible bodies for establishing and approving of the heat tariffs for
population of Ukraine is provided in Section 4.
29
2.2.2
Electricity
Tariffs for electricity for the population in the Ukraine vary depending on a number of factors: on
the availability of district heating in the area, location of the service (e.g., rural areas), and
installation of electric cooking stoves. The tariffs vary from 0.18 UAH/kWh to 0.24 UAH/kWh with
an average of 0.22 UAH/kWh (0.02 EUR/kWh) which is about 4 to 13 times lower than in the EU.
For example, in Bulgaria the price of electricity for households is approximately EUR 0.08 per
kWh, which is one of the cheapest prices in EU, while the most expensive EU Member State, like
Denmark, has the price 0.27 EUR/kWh. Average electricity price for households in EU-27 is 0.17
EUR/kWh.
The electricity prices in the Ukraine are regulated by the National Electricity Regulatory
Commission of Ukraine (NERC). The electricity prices for residential customers are set pursuant
to the Decree of NERC #309 from 10.03.99. Since 1999, there have been three (3) amendments
to the mentioned decree, which resulted in a raise of electricity prices. Altogether the electricity
prices have risen by 56% since 1999.
The Decree #309 from 10.03.99 has defined seven (7) residential customer sub-categories and
has set different prices for each of the sub-category.
With an amendment to the Decree #309, the NERC has raised the electricity prices for the first
time in May, 2006. The prices were raised by 25% for all of the customer sub-categories.
Effective from September 2006, NERC raised the electricity prices for residential customers by
another 25% for all sub-categories.
Another amendment was approved by NERC in 2009. Effective from December 2009, the
amendment did not raise electricity prices for the existing sub-categories of residential
customers, but established a new sub-category of residential customers.
The last amendment was approved by NERC in 2011. Effective from February 2011, it
implemented a diversified scale of prices according to the amount of electricity consumption per
month. As such, for those categories that consume electricity at or below a set limit (150
kWh/month for residential consumers and residential consumers in rural areas, and 250
kWh/month for residents that live in buildings equipped with electric kitchen appliances, electric
heaters, including those living in rural areas) the price was not affected by the amendment. For
consumers that use more electricity than the limit mentioned, the price has been raised by 30%.
A separate sub-category for each of the consumers was implemented for families with many
children, foster families and foster care homes with any amount of electricity consumption. For
this category of consumers, the price has not been raised by the amendment.
For the three (3) consumer categories on human settlements the prices were also raised by the
amendment in 2011. For each of these categories a sub-category has been implemented for
family type dormitories in the corresponding area. For those sub-categories the prices have
remained unchanged.
If the electricity prices are converted into Euro denomination, and the latest changes of prices
are considered, it can be seen that the level of their growth varies greatly depending on the
consumption amounts. For all categories of consumers who use less than 150 kWh/month, the
electricity prices in the last five years have decreased by 8%. For consumers who use more
than 150 kWh/month, the prices have increased by 20%.
Detail information on electricity tariffs is presented in Annex 28.
2.2.3
Natural Gas
The natural gas price for residential customers are also set by the National Electricity Regulatory
Commission of Ukraine (NERC). In 1999, NERC prices for natural gas for residential customers
30
was 17.5 kop/m3 (or 0.04 EUR/m3) if gas meters were installed, and 19 kop/ m3 (0.042 EUR/m3)
if gas meters were not installed.
In May, 2006 the gas prices were raised for the first time since 1999 with Decree #400 by 26%,
to 22 kop./m3 (with meters) and 24 kop./m3 (without meters). In terms of EUR these gas tariffs
remained at the same level.
There were four (4) more changes to the natural gas prices for residential customers in the same
year. From July 2006, the natural gas prices were raised by another 85% (Decree # 739) to 40.7
kop./m3 (0.06 EUR/m3, with meters), and 44.4 kop./m3 (0.07 EUR/m3, without meters). In
November 2006, a separate lower price in the amount of 31.5 kop./m3 (0.049 EUR/m3, with
meters) and 34.5 kop./m3 (0.05 EUR/m3, without meters) was set for customers who do not use
natural gas for heating purposes (Decree #1345).
From January 2007, the natural gas prices for all-purpose residential customers were raised by
another 70% to 68.6 kop./m3 (approximately 0.1 EUR/m3, with meters) and 75.4 kop./m3 (0.11
EUR/m3 without meters) (Decree #1672). At the same time a diverse price scale according to the
amount of natural gas a customer uses per annum was established, as presented on Annex 29.
Since 2007, the Ukraine was repeatedly raising the gas prices for the residents in the Ukraine.
The most recent Decree (June 2010) raised the price to 72.54 kop/m3 (0.069 EUR/m3) or 0.078
UAH/kWh (0.007 EUR/kWh) for those inhabitants who consume less than 2,500 m3 of gas per
year and have installed gas meters, and to 79.8 kop/m3 (0,076 EUR/m3) for those without
installed gas meters. It means that the gas price for residents was increased by more than 400%
since 1999. However in terms of hard currency, as for instance EUR, the in average tariffs did
not change so dramatically (approximately 175%) and they are still much lower compared to
what residents pay in European countries: for instance in Bulgaria it is 0.43 EUR/m3. On average
the gas price for households in EU-27 is 0.054 Euro/kWh, or approximately 0.5 Euro/m3.
According to the latest Decree, gas consumers who use between 2,500 – 6,000 m3 annually
have a tariff of 109.8 kop/m3 (0.09 EUR/m3 ); between 6,000 – 12,000 m3 – 224.82 kop/m3 (0.2
EUR/m3 ); more than 12,000 m3 – 268.56 kop/m3 (0.23 EUR/m3 )
If the price of natural gas for residential consumers is converted into Euro denomination, its
growth over the past five years has changed differently depending on the amount of
consumption and availability of metering. For consumer with meters and the lowest levels of gas
usage, the prices have increased from 0.027 to 0.069 EUR/m3, for those without meters – from
0.03 to 0.076 EUR/m3. This constitutes an increase of 152% for consumers with meters and of
155% for consumers without meters.
For consumer with meters and the highest levels of gas usage (more than 12,000 m3 annually),
the prices have increased from 0.027 to 0.255 EUR/m3, for those without meters – from 0.03 to
0.281 EUR/m3. This constitutes an increase of 831% for consumers with meters and of 844% for
consumers without meters.
Information about responsible bodies for establishing and approving gas tariffs for the population
of Ukraine is provided in Section 4.
2.2.4
Water Supply
The weighted average tariff for centralized water supply services in the Ukraine in 2009 was 1.96
UAH/m3 (0.2 EUR/m3). Among the customer categories, the highest tariff in 2009 was set for
budgetary customers at 4.03 UAH/m3 (0.4 EUR/m3). A much lower average tariff was set for
other customers at 1.91 UAH/m3 (approximately 0.2 EUR/m3) and residential customers at 1.85
UAH/m3 (approximately 0.2 EUR/m3). Detail information on water supply tariffs are presented in
Annex 30
31
The weighted average tariff for water supply in Ukraine (Figure 1.30) grew since 2005 by 161%,
with an annual growth rate for the same period of 27%. The highest growth of 30% per year
occurred in 2007, when the weighted average tariff rose from 0.92 to 1.2 UAH/m3 (0.13 to 0.17
EUR/m3).
By customer categories, the highest growth since 2002 can be observed for the average tariff on
water supply for residential customers, which has grown by 236%. The highest growth was
observed in 2007, when the tariff rose by 39% from 0.78 to 1.08 UAH/m3 (0.11 to 0.15 EUR/m3).
In 2005 the tariff for residential customers declined by 15% from 0.72 to 0.61 UAH/m3. The tariff
for residential customers has been lower than the other customer categories for the past 8 years,
and has constantly remained below the level of the weighted average tariff for the Ukraine. The
trend of weighted average growth is shown in Exhibit 11.
Exhibit 11: Water supply tariff trends in Ukraine
4
3.5
UAH/cub.m.
3
2.5
2
1.5
1
0.5
0
2002
2003
2004
Weighted average
2005
2006
Residents
2007
Budgetery
2008
2009
Others
3
2002 – 2009, UAH/m ; Source [29]
For budgetary customers, average tariff on water supply has grown by 222% since 2002. The
highest growth was observed in 2009 when the tariff rose by 30% from 3.11 to 4.03 UAH/m3
(0.31 to 0.4 EUR/m3). In 2005 the tariff for budgetary customers declined by 12% from 1.92 to
1.69 UAH/m3. Prior to 2005 the tariff for budgetary customers was significantly higher than for
residential customers, and since 2005 has remained significantly higher than the tariffs for all the
other customer categories.
For other customers, average tariff on water supply has grown by 23% since 2002. The highest
growth was observed in 2008 when the tariff rose by 31% from 1.22 to 1.59 UAH/m3 (0.14 to
0.19 EUR/m3). In 2005, the tariff for other customers declined by 59% from 2.16 to 0.89 UAH/m3
(0.33 to 0.13). Prior to 2005 the tariff on water supply for other customer was the highest among
all the customer categories. Since 2005 the tariff has been close to the weighted average.
As can be seen from Exhibit 12 at the end of 2009, when comparing regions of the Ukraine, the
highest operational costs per unit of service sold are in Lugansk oblast (4.55 UAH/m 3 or
approximately 0.45 EUR/m3), the lowest are in Dnipropetrovsk oblast (1.1 UAH/m3 or
approximately 0.11 EUR/m3). The highest tariffs can be observed in Chernivtsi (3.57 UAH/m3 or
approximately 0.36 EUR/m3), Lugansk (3.51 UAH/m3 or approximately 0.35 EUR/m3) oblasts and
in the city of Sevastopol (3.14 UAH/m3 or approximately 0.31 EUR/m3). The lowest tariffs are in
Dnipropetrovska oblast (1.06 UAH/m3 or approximately 0.12 EUR/m3) and in the city of Kyiv
(1.35 UAH/m3 or approximately 0.14 EUR/m3).
In Europe water tariffs differ significantly from country to country EUR/m3.
from 1 EUR/m3 to 3,5
In terms of cost coverage, in the majority of Ukrainian regions the tariffs do not cover operational
costs. Only in 2 regions do the tariffs cover operational costs: Rivne and Odesa oblast.
32
Operational costs are least covered by tariffs in the following regions: Zakarpattia oblast (where
the tariff is below operational costs by 25%), Donetsk oblast (by 24%), Lugansk and
Khmelnytsky oblast (by 23%).
Exhibit 12: Tariff and production costs of water by the region
Lugans ka
3.51
Chernivecka
4.55
3.57
Zakarpats ka
3.92
2.88
Donecka
3.85
2.80
Kirovograds ka
3.68
2.98
c. Sevas topol
3.49
3.14
Ivano-Frankivs ka
3.33
2.42
Odes ka
2.91
2.90
Kyivs ka
2.87
2.45
Crim ean AR
2.85
2.62
Poltavs ka
2.84
2.55
Zaporizhs ka
2.77
2.67
2.70
Lvivs ka
2.07
2.66
Khm elnyts ka
2.05
2.66
Zhytom yrs ka
2.13
Kharkivs ka
2.61
2.43
Cherkas ka
2.54
2.40
Mykolayivs ka
2.52
2.03
Sum s ka
2.46
2.14
Chernigivs ka
2.02
Vinnits ka
1.99
Rivens ka
2.36
2.21
2.17
2.15
Ternopils ka
2.09
1.93
Khers ons ka
2.07
1.99
Volyns ka
2.06
1.76
c. Kyiv
1.93
1.35
Dnipropetrovs ka
1.06
0.00
1.52
1.10
1.00
2.00
Weighted average tariff
3.00
4.00
Operational Cos ts
3
2009, UAH/m ; Source [29]
The cost components of the average operational cost of water supply services in the Ukraine is
provided in Exhibit 13. The largest operational cost components belong to electricity costs, which
constitute 26% of the total operational costs, and to labour costs, which constitute 24%, other
material costs constitute 14%, purchased water – 13%, labour related social charges – 9%, other
operational costs – 8%, and depreciation – 7%.
Exhibit 13: Structure of average production cost of water supply in 2009
Other operation costs;
8%
Amortization; 7%
Electricity; 26%
Social charges; 9%
Remuneration of
labour; 24%
Purchased water; 13%
Other material costs;
14%
Source [29]
33
Information about responsible bodies for establishing and approving of the water supply tariffs
for population of Ukraine is provided in Section 4.
2.2.5
Wastewater Services
As can be seen from Annex 31, the weighted average tariff for wastewater services in the
Ukraine in 2009 was 1.81 UAH/m3 (0.16 EUR/m3). Among the customer categories, the highest
tariff in 2009 was set for other customers at 3.14 UAH/m3 (0.3 EUR/m3). The tariff for budgetary
customers in 2009 was 3.09 UAH/m3 (0.3 EUR/m3). A much lower average tariff was set for
residential customers at 1.32 UAH/m3 (0.1 EUR/m3).
The trend of the weighted average tariff for wastewater treatment in Ukraine, as presented in
Exhibit 14 indicates that since 2005 the tariffs have grown by 199%. The highest growth of 37%
per year was in 2007, when the weighted average tariff rose from 0.77 to 1.05 UAH/m 3 (0.12 to
0.16 EUR/m3). If converted into Euro denomination, the weighted average tariff for wastewater
services since 2005 has grown from 0.09 to 0.17 EUR/m3, or increased by 78%.
By customer categories, the highest growth since 2002 is observed for the average tariff on
wastewater services for budgetary customers, which grew by 267% in Ukrainian currency. The
highest growth can be observed in 2006, when the tariff rose by 39% from 1.03 to 1.43 UAH/m3
(0.16 to 0.22 EUR/m3). Since 2002 the tariff for budgetary customers has been significantly
higher than for residential customers.
For residential customers, the average tariff on wastewater services has grown in Ukrainian
currency by 229% since 2002. The highest growth can be seen in 2009, when the tariff rose by
46% from 0.90 to 1.32 UAH/m3 (0.08 to 0.12 EUR/m3). The tariff for residential customers has
been lower than the other customer categories for the past 8 years, and has constantly remained
below the level of the weighted average tariff.
Exhibit 14: Waste water tariff trends in Ukraine
3
UAH/cub.m.
2.5
2
1.5
1
0.5
0
2002
2003
2004
Weighted average
2005
2006
Residents
2007
Budgetery
2008
2009
Others
3
A comparison of the regions within the Ukraine shows that the highest operational costs of
wastewater services are in Kyivska oblast (3.43 UAH/m3 or approximately 0.32 EUR/m3), while
the lowest are in the city of Kyiv (1.26 UAH/m3 or approximately 0.12 EUR/m3). The highest
tariffs can be observed in Luganska (2.88 UAH/m3 or approximately 0.26 EUR/m3) and Kyivska
(2.81 UAH/m3 or approximately 0.26 EUR/m3) oblasts. The lowest tariffs are in the city of Kyiv
(1.02 UAH/m3 or approximately 0.1 EUR/m3) and in Lvivska oblast (1.36 UAH/m3 or
approximately 0.1 EUR/m3). In terms of cost coverage, in the majority of regions the tariff does
not cover the operational costs. Only in the following four (4) regions does the tariff cover
operational costs: Kharkivska, Cherkaska, Zaporizhska and Luganska oblast. Operational costs
34
are least covered by tariffs in the following regions: Ivano-Frankivska oblast (where the tariff is
below operational costs by 30%), Poltavska oblast (by 20%), and in the city of Kyiv (by 19%).
The Exhibit 15 shows the tariff and the production cost in all regions in 2009.
Exhibit 15: Tariff and production costs of waste water by the region
Kyivska
2.81
Kirovogradska
3.43
2.63
Khersonska
3.17
2.55
Luganska
2.83
2.88
Rivenska
2.75
2.38
Poltavska
2.74
2.16
Zhytomyrska
2.70
2.27
Sumska
2.68
2.19
Ivano-Frankivska
2.53
1.76
2.50
Zakarpatska
1.90
Khmelnytska
1.94
Donecka
2.29
2.23
2.15
Odeska
2.22
2.15
Chernigivska
2.20
1.88
Crimean AR
2.18
1.93
Zaporizhska
2.13
2.08
Mykolayivska
2.09
1.74
Cherkaska
2.03
2.12
Ternopilska
2.02
1.93
Volynska
1.95
1.79
Vinnitska
1.73
Chernivecka
1.73
Dnipropetrovska
1.89
1.88
1.88
1.69
c. Sevastopol
1.79
1.61
Kharkivska
1.75
1.83
Lvivska
1.72
1.36
c. Kyiv
1.49
1.02
0.00
0.50
1.26
1.00
1.50
2.00
Weighted average tarif f
2.50
3.00
3.50
Operational Costs
3
The cost components for the average operational costs of waste water supply services in
Ukraine is provided in Exhibit 16. The highest operational cost component belongs to labour
costs, which constitute 33% of the total operational cost, and to electricity costs, which constitute
22%. Other costs contribute to the average operational cost as follows: other material costs 13%, labour related social charges – 12%, other operational costs – 10%, and depreciation –
9%.
Exhibit 16: Structure of average processing cost of waste water in 2009
Other operation
costs; 10%
Amortization; 9%
Electricity; 22%
Purchased water;
0%
Social charges;
12%
Other material
costs; 13%
Remuneration of
labour; 33%
Source [29]
35
2.2.6
Summary of Tariff Policies
In conclusion, a review of energy tariffs provides information on current rates (tariffs) which are in
most cases lower than the production cost. This will be a significant factor during the process of
bringing the tariffs in line with the reality and will have a significant impact on the improvement of
energy utilization efficiency in residential housing, similarly to what happened in Slovakia. Low
prices of electricity and gas for the residential sector were not in line with the cost of production,
transportation and distribution and thus did not allow the energy companies proper asset
renovation and investment into the environmental improvements. The energy tariff policy
therefore required gradual changes to provide the citizens with an incentive to save energy. It is
well known that the cleanest and the cheapest is the energy that does not have to be produced.
The result of “under-priced” subsidized energy prices is a lack of interest and lack of incentive for
citizens to save energy. This is a reason why the Ukrainian tariff policies should follow the path
to undistorted tariffs by removing subsidies and to bring the tariffs up to the level of full cost
recovery with sufficient funds for reinvestment.
Energy production companies will maintain their mostly monopolistic position within the market
(as it happened in Slovakia and in other countries), thus it will be necessary to maintain
regulatory policies to prevent abuse of this monopoly position. The most important part of the
regulatory effort is to protect the socially vulnerable part of the population (households) who
cannot afford the market prices of energy. For this part of the population, targeted direct
subsidies should be applied. Currently within the scope of USAID project “Municipal Heating
Reform” the assistance to the Government of Ukraine is provided to develop effective social
safety net to make sure that the population would be able to pay their heat bills after the tariff
rise.
2.3
ENERGY SAVING POTENTIAL IN THE HOUSING STOCK OF UKRAINE
As mentioned earlier, official statistics on energy use by the residential sector is not maintained
within the Ukraine, let alone the subdivision of energy use by different types of residential
buildings in different climatic zones. Therefore the presented results on the energy saving
potential in this report are approximate and are based on the baseline energy consumption data
based on information provided by other studies in the Ukraine (IEA) and supported by energy
consumption modelling of energy consumption by representative buildings in all climatic zones,
projected to the entire building stock.
According to the IEA energy statistics for 2008, “Energy balance for Ukraine” the total final
energy consumption of the residential sector of the Ukraine in 2008 was 272 million MWh,
consumed by residential building stock of 1,066 million m2. This data was used as the baseline
for this study. The resulting specific energy consumption (EP – energy performance indicator) in
average for the Ukraine is 255 kWh/m2 delivered energy and varies from 139 to 327 kWh/m2
depending on the type of building and climatic zone where the building is located. For instance,
for climatic zone I, which is the coldest and covers the largest part of the Ukraine, the energy use
can be summarized as shown in Exhibit 17:
The year 1980 was selected as a milestone since in 1979 the Building Codes setting the new
requirements on thermal properties of buildings were approved, even though in general the new
requirements did not significantly improve the construction practices in Ukraine and the energy
performance of buildings did not seem to improve. Selection of 1980 as milestone is based also
on observation that construction of high rise residential buildings started to be a more frequent
practice after this year. The software model of such buildings assumed that the overall structure
of the building in combination with thermal bridges between wall panels was not favourable for
36
improvement of energy performance; therefore the model shows slight increase in the energy
consumption.
In 1994 the Ministry of Construction and Architecture of Ukraine issued an Order N 247, carrying
stronger requirements on thermal insulation of buildings. However, the statistical information on
buildings constructed between 1995 and 2009 shows that such multi-story buildings constitute
only about 4% of the total building stock (in terms of floor area) in Ukraine. Thus, this year was
not considered as milestone for energy conservation analysis.
Exhibit 17: Specific energy use by the Residential Buildings in Zone I
Single family houses
Delivered energy in kWh/m2
Apartment blocks
construction after 1980
Delivered energy in
kWh/m2
Space heating (incl. vent.)
Domestic Hot Water
Lighting
Various equipment
165,0
22,0
10,0
12,6
172,0
22,0
10,0
12,6
289,9
14,0
10,0
12,6
Total
209,6
216,6
326,5
Climatic Zone I
Apartment blocks construction
before 1980
Delivered energy in
kWh/m2
For the warmest climatic zone, Zone IV, the specific energy consumption by the residential
sector is estimated to be approximately 145 kWh/m2 for the apartment building and 225 kWh/m2
for the single family house. Detailed information about baseline consumption of the residential
buildings in different climatic zones of Ukraine is provided in Annex 32.
The map of the Climatic Zones of Ukraine, as specified by the Ukrainian Building Codes (DBN
B.2.6.-31:2006) is presented In Exhibit 18.
Exhibit 18: Map of the Climatic Zones of Ukraine
Comparing the energy use with that of European countries, for example Norway – the statistic
shows that the total energy use by households in the Oslo area is in average 140 – 170 kWh/m2.
The Oslo climate is characterized by approximately 4,000 degree days, while for the coldest
climatic zone I in the Ukraine, is characterized by 3,501 degree days.
Comparing the specific energy consumption with other European country with a warmer climate,
for instance Bulgaria, reveals an average specific energy consumption for the residential sector
37
of 100 – 120 kWh/m2. On average, the climate of Bulgaria corresponds to the Ukrainian climatic
zones III- IV.
The baseline in this study is based on the data of actual energy consumption in Ukraine, which
does not reflect the proper maintenance of indoor conditions and building services in the
residential facilities. Very often it is the case in the Ukraine that such conditions and services are
not properly maintained (and sometimes are even missing). If the proper indoor climate and
services in the buildings would be assumed, the reference energy consumption in Ukrainian
households would be even higher, and the baseline would increase by 50 to 100%.
2.3.1
Selection of Representative Objects
Based on statistical data [1], a single story, private residential houses with an average living area
of 62.5 m2 is the most common type of house in rural localities. Thus, it is considered to be a
representative object for rural localities for the assessment of the potential energy saving.
Urban areas have both, multi-apartments residential houses, as well as single family houses.
Available official statistical sources have no information on the structural distribution of apartment
buildings and single family residential houses in urban settlements, and only very general
information is available. Thus, without an exhaustive new statistical effort, it is virtually
impossible to exactly define the type of housing and to estimate heat consumption for space
heating by the type of the housing. It is also not possible to define the percentage distribution of
the typical objects compared to the total number of residential houses. This fact, in its turn,
prevents a reasonable assessment of the percentage of every type of representative objects in
the total amount of estimated specific costs of heating of the housing fund of urban settlements
and some assumptions had to be made.
Existing statistical data for Kyiv for 2004 presented in Annex 33 define the residential housing
stock and its classification for multi-storey multi-apartments residential houses. According to this
data, there are 12,062 multi-apartment residential houses in Kyiv, which is 36.4 % of the total
amount of residential houses of Kyiv [5]. Thus, taking Kyiv data as the basis for calculations, we
assume that the total amount of multi-apartment residential houses makes up approximately
30% of the number of residential houses in urban settlements overall in Ukraine.
Based on the above, the following houses are considered as representative objects for
calculation of specific heat consumption for heating of apartment dwellings in urban settlements:
 Single family house in rural area with floor size of 60 m2
 5-storied residential building with 4 entrances,
 6-storied residential building with one entrance,
2.3.2
Energy Saving Potential
The main operating cost of the existing residential sector of the Ukraine is the cost of heating.
This cost can be reduced by proper application of energy saving measures, mainly including
improved thermal properties of the building envelope, new automated heat stations, thermostatic
control, replacement of lighting, new high efficiency boilers on building level and other. The
repair and reconstruction should be executed in accordance with the requirements of state
construction norms and indicators for engineering systems providing the energy efficiency of
buildings will not be lower than the minimum requirements set, as in SCN B.2.6-31 [30].
Development of the baseline heat consumption of the selected representative objects within
each climatic zone in the Ukraine was carried out in accordance with the methodology provided
by EN ISO 13790. Calculations produced average indicators of estimated specific consumption
for different energy budget items in the building. The energy saving potential in the housing stock
38
was then determined for applicable energy saving measures that will produce efficient housing
stock.
Average normative characteristics of maximum heat consumption for heating residential houses
of urban settlements and rural localities set for every temperature operation zone of Ukraine
pursuant to Ukrainian Building Codes are shown in Annex 34.
The difference between the values of estimated baseline consumption and consumption after
implementation of the measures determines the potential energy conservation in the housing
stock. For defining quantitative characteristics and economic indicators, statistical data was used
in relation to the structure of the housing stock by regions and the locality type, as well as
indicators of average tariffs of Ukraine.
According to the official statistics, the structure of the housing stock of Ukraine distribution by
temperature zones in urban and in rural areas are illustrated in Exhibit 19 with detailed data as of
January 1, 2009 shown in Annex 35, Annex 36 and Annex 37. There is a very small variation in
housing stock distribution between the urban and rural areas, with differences not exceeding a
few percentage points in each zone. Similarly, the variation of the housing stock living area
correlates with the building stock distribution, as shown in Exhibit 20.
Exhibit 19: Distribution of residential housing in climatic zones
Source [1]; Data as of 1. January 2009
Exhibit 20: Distribution of residential housing stock space in climatic zones
Distribution structure of the general space of residential
houses by temperature zones of Ukraine
I
60.1%
II
23.0%
IV
4.5%
III
12.4%
Source [1]; Data as of 1. January 2009
The main drawback of the official statistics is the lack of data sorted by types of residential
housing.
Nevertheless, based on the available statistic information, the following assumption can be made
for the distribution of residential building area between the climatic zones, urban and rural
buildings, different apartment blocks and single family houses as presented in Exhibit 21.
39
Exhibit 21: Distribution of residential building area in Ukraine
Building stock distribution, thousands m
2
In urban areas
Zone I
Zone II
Zone II
2
2
2
000'm
Apartment blocks construction before 1980
Apartment blocks construction after 1980
Sum urban areas
In rural areas
Sum rural areas
Total urban and rural
000'm
000'm
Zone
IV
2
000'm
Total
000'm
2
251 379
52 710
131 111
435 200
2
000'm
80 631
16 907
42 055
139 592
2
000'm
48 616
10 194
25 356
84 166
2
000'm
14 624
3 066
7 628
25 318
2
000'm
395 250
82 877
206 150
684 277
2
000'm
11 387
2 333
213 018
226 738
661 938
4 455
913
83 339
88 707
228 299
2 688
551
50 291
53 530
137 696
672
138
12 573
13 383
38 701
19 202
3 935
359 222
382 358
1 066 634
The technical energy saving potential that is attainable based on application of available practical
and proven technical solutions regardless of the economic characteristics and market constrain,
such as:
 insulation of walls
 insulation of roof
 installation of new energy efficient windows
 automatic controls for heat supply and installation of thermostatic valves
 energy efficient indoor lighting
The results of modelling and iteration matrixes which satisfy mutually the building stock
distribution statistics versus final consumption energy balance and software simulations are
presented in Annex 38. The computer models utilized the thermal characteristics of
representative buildings before and after the mentioned Energy Efficient measures accounting
for norms, age, type and for all four climatic zones in Ukraine. The estimation of specific and final
energy consumption for heating, hot water preparation, lighting and various equipment of the
existing residential building stock was defined for several representative building characteristics.
A summary of the results are presented in Exhibit 22.
Exhibit 22: Specific energy saving potential in residential buildings in Ukraine
Savings in kWh/m2:
Apartment blocks up to 7
floors construction*
Apartment blocks more than
7 floors construction**
Zone I
Zone II
Zone II
Zone IV
97.2
81.8
54.7
53.3
111.6
97.8
81.8
68.9
173.5
152.9
131.8
105.4
* mostly before 1980
**mostly after 1980
As noted earlier in this report, these savings could increase by 50-100% if the “normalized”
baseline of theoretical energy use (not actual) in the building that account for proper indoor
climate and proper building services is used. Such a baseline would be accomplished if
appropriate heat supply would be provided to heat apartments to the proper temperature as
required by indoor quality standards.
40
In terms of total technical energy saving potential, expressed in MWh and distributed between
the Energy Efficient measures, apartment blocks and single family houses – the information is
presented in Annex 39 and Annex 40. A summary of these annexes is provided in Exhibit 23.
Exhibit 23: Technical energy saving potential for the residential buildings in Ukraine
Sum savings
Zone I
Zone II
Zone II
Zone IV
Total
MWh
MWh
MWh
MWh
MWh
3 685 000
1 036 700
45 109 800
2 129 340
90 987 300
For the apartment blocks
31 687 000
8 700 250
For the single family houses
59 715 400
19 173 400
9 969 000
Total savings in MWh
91 402 400
27 873 650
13 654 000
3 166 040 136 096 100
The distribution of these savings between the energy efficient measures is presented in Exhibit
24:
Exhibit 24: Technical Energy Savings potential in residential buildings by measures
Total for Ukraine
Measures/Savings
Additional insulation of
walls
New windows
Additional insulation of
roof
New automated
substation and TRV
Indoor lighting
replacement
Replacement heat
generator with high
efficient boiler
Total savings, Ukraine
Zone I
MWh
Zone II
MWh
Zone II
MWh
Zone IV
MWh
Total
MWh
31 459 667
18 382 920
9 872 246
4 914 563
4 903 306 1 175 135
2 108 286
509 115
47 410 354
25 914 884
17 490 317
5 496 734
2 759 613
563 310
26 309 974
9 991 139
2 999 030
1 457 147
353 415
14 800 732
3 243 497
1 118 667
674 711
189 634
5 226 509
10 834 820
91 402 000
3 472 376
27 873 650
1 750 974
375 469 16 433 639
13 654 000 3 166 040 136 096 100
The results of the calculations of technical energy saving potential show that the introduction of
improvements in energy efficiency in existing residential buildings in the Ukraine and enhancing
their energy efficiency will result in nearly 136 million MWh of total energy consumption
reduction, which is approximately 50% from the actual baseline consumption (272 million MWh
according to IEA, Energy statistics, 2008 Energy balance for Ukraine).
Considering the low quality of input data based on official statistics that is lacking numerous
information required for more accurate calculations, it is necessary to view the results of
calculations as best estimates. However, the results should be sufficient to support the claim that
the energy saving potential is very large and an effort to reduce heat consumption in residential
sector is much needed. It can also be concluded that in order to make a more accurate
assessment of the energy saving potential, a detailed analysis of housing stock by regions of
Ukraine would be required.
Investment potential, associated with this theoretical energy saving potential can be summarized
as shown in Exhibit 25:
41
Exhibit 25: Investments associated with Technical Energy Savings potential in residential
buildings by measures
Total for Ukraine
Measures/Savings
Additional insulation of walls
New windows
Additional insulation of roof
New automated substation and TRV
Indoor lighting replacement
Replacement heat generator with high
efficient boiler
Total Investments, Ukraine
2.3.3
Total
mln UAH
173 860
121 600
101 800
19 700
2 700
75 400
Total
mln EUR
14 700
10 300
8 600
1 700
200
6 400
495 060
41 900
Assessment of Energy Saving Economic and Market Potential
Economic energy saving potential is defined as the energy saving potential which can be
achieved when economic parameters of the energy saving measures are considered. In general,
this means that not all the technical potential available in energy savings measures can be
achieved due to multiple reasons. When, for example a simple payback of all the applied
measures would be five years, then theoretically the total investment in a single year to
accomplish the technical energy saving potential would be about 29.9 billion UAH (€2.6 billion).
The other issue hindering investment in energy efficiency is that the heat tariffs are still being
held below the production cost, thus making investment in energy efficiency less economically
attractive (or even economically unattractive under the current tariffs in Ukraine). Comparing
heat prices in the Ukraine with heat prices, for instance, in Bulgaria - where energy efficiency
measures are being actively implemented in residential sector, the prices in the Ukraine in
average are 2.5 times lower. With regard to the electricity prices, they are nearly 4 times lower
compared to Bulgaria.
For the purpose of estimating the current monetary value of heat savings, the average cost of
heat and heat from gas can be set at 220 UAH (€19.5) per MWh and for electricity at 224 UAH
(€19.8) per MWh. The electricity prices are nearly the same in terms of kWh as for the heat. With
the estimated technical energy saving potential of 136 million MWh per year, the monetary
savings based on technical saving potential would be about 29.9 billion UAH (€ 2.6 billion). In
terms of CO2 reduction potential – this will correspond to 39 million tCO2.
Obviously, this is only a theoretical value, as the reality in implementing the energy efficiency
potential will be substantially lower, determined by the economic performance of energy
efficiency measures and by what is realistically possible to implement under the current market
environment.
Economic energy saving potential in this study was defined as attainable energy savings by
measures that produce reasonable payback of the investment of not more than 10 years.
Considering the current low heat, gas, and electricity tariffs, combined with “regular” market
prices of energy saving measures, only a few energy savings measures are economically
feasible and worth considering for an investment. Among the measures that are economically
feasible under the current conditions are, for example, modern district heating substations with
automatic regulation of heat supply, new automated high efficiency boilers on building level,
42
temperature controls in the building/apartment, and high efficiency lighting. Based on the
available data and information, it is estimated that the economic energy savings potential would
be approx. 32.6 million MWh per year, resulting in monetary savings of approx. 7.18 billion
UAH (€ 624 million). In terms of CO2 reduction potential this will correspond to 11.1 million
tCO2
Based on the experience from other Eastern European countries, such as the Czech Republic,
Slovakia and Poland, the energy efficiency measures will be introduced gradually over several
years (a 5 - 10 year horizon is likely) and the penetration rate will be at relatively low level.
Penetration rate of implementing the measures will be influenced by the availability of funds,
availability and pricing of the energy conservation materials and equipment (as applicable) and
public knowledge of the investment benefits and knowledge of implementation process. The role
of the government and international donors and IFI’s is very important in the later. It was
estimated that the economics and market situation will have an impact on implementation that
will follow the trend presented in Exhibit 26.
Exhibit 26: Market energy saving potential estimates
Based on Technical Potential (136 mln MWh)
Year
Percent
each year
MWh/year
saved,
cumulative
Percent
cumulative
Value of savings,
cumulative
EUR/year
Investment
EUR
st
0.5 %
0.5 %
680 000
13 600 000
200 000 000
nd
1%
1.5 %
2 040 000
40 800 000
400 000 000
rd
2%
3.5 %
4 760 000
95 200 000
800 000 000
th
2%
5.5 %
7 480 000
149 600 000
800 000 000
th
3%
8,5 %
11 560 000
231 200 000
1 200 000 000
1
2
3
4
5
In general the following measures are considered for market potential:
 New automated substation
 Thermostatic valves
 Indoor lighting replacement
 New high efficient boilers
 New energy efficient windows
 Insulation of walls
 Insulation of roof
Economical benefits from these measures will very depending on location and type of building
where they will be applied, as well as depending on combination of measures into the project
package. Information about economical benefits from these measures are presented in Chapter
6 “Financing Models”.
If to make an analysis of the economical benefits of energy efficient measures in the Ukrainian
residential market, most of the measures (especially related to improvement of the building
envelope) show quite long simple payback period. As an example, the results for the model of
typical apartment block in Climatic Zone I is presented in Exhibit 27:
43
Exhibit 27: Energy Saving potential and its economical benefits for the apartment building
connected to district heating
EE Measures
Investments per
heated area
2
[UAH/m ]
1.
2.
3.
4.
5.
6.
New windows
New automated substation
Thermostatic valves
Total
143.7
91.7
80.0
23.0
14.3
2.1
354.8
2
[EUR/m ]
12.3
7.9
6.9
2.0
1.2
0.2
30.3
Net savings
Payback
per heated area
2
2
[kWh/m UAH /m .year] [EUR
2
]
/m .year]
32.8
27.0
12.8
9.8
9.8
4.9
97.2
7.2
5.9
2.8
2.2
2.2
1.1
21.4
0.6
0.5
0.3
0.2
0.2
0.1
1.9
[years]
19.9
15.4
28.3
10.7
6.6
2.0
16.6
It means that under current tariff conditions it will take quite a long period of time before the
investments into energy efficiency measures are repaid due to the energy savings. As the tariffs
most probably will increase significantly in the future, the Government of Ukraine might be
interested to provide incentives to the population to invest in energy efficiency measures by
meantime. Such incentives can be arranged through the provision of grants to cover part of the
investment costs, especially where related to the investments into improvement of building
envelopes, where the payback periods are too long to get the inhabitants’ interest for such
investments.
More information about economic benefits for different measures under different models is given
in Chapter 6 “Financing Models”.
2.4
LEGISLATION ON ENERGY EFFICIENCY IN BUILDINGS, EPBD TRANSPOSITION
In 2002, the EU adopted the Energy Performance of Buildings Directive No 2002/91/EC (EPBD),
which set minimum efficiency standards for both residential and commercial buildings. The
EPBD was revised in May 2010.(2010/31/EU). In September 2010 the Ukraine became a
Contracting Party to the Energy Community Treaty and committed to implement relevant EU
Directives, including the EPBD.
This Directive mainly focuses on the following topics:
 the general framework for a methodology of calculation of the integrated energy
performance of buildings,
 the application of minimum requirements on the energy performance of new buildings,
 the application of minimum requirements on the energy performance of large existing
buildings that are subject to major renovation,
 energy certification of buildings,
 regular inspection of boilers and of air-conditioning systems in buildings and an assessment
of the heating installation in which the boilers are more than 15 years old,
 necessity of involving independent experts for energy performance certification and drafting
inspection reports.
The EU Directive requires that the member states achieve certain end results and that national
authorities adopt relevant laws to meet these goals. It is the responsibility of individual member
44
states to decide how the process will be organized (EU Directives often refer to a number of EU
Standards). In the case of the EPBD, more than 50 Standards providing specifications and
methods to be used are referenced. These EN Standards propose different methods and
approaches allowing certain flexibility for National Authorities to select the most suitable
approach for their respective country. Therefore, National Authorities of the Member States are
supposed to reflect these EN Standards into their National Building Regulations depending on
accepted calculation methods, accepted way of expression of minimum energy performance
requirements, and energy performance certificates, as well as accepted procedures for
inspection of boilers, heating systems, ventilation, and air conditioning.
2.4.1
Main Ukrainian legislation and regulations related to energy efficiency in buildings
The Law on Energy Savings, enacted in 1994, defined the strategy of technical development in
this sector as well as the main principles of the state policy for energy savings. However this Law
has quite a declarative character and does not describe solution mechanisms for achieving the
goals. Currently the Government of the Ukraine is preparing a revision of the Law “On Efficient
Utilization of Fuel and Energy Resources.”
It should be noted that since 2010 several Draft Laws on Energy Efficiency in Buildings intending
to reflect the EPBD requirements were submitted to the Parliament by different parties for
approval, and none of the versions has yet to be adopted. The Ministry of Housing and Municipal
Economy of the Ukraine, being one of the main responsible authorities for the building stock in
the Ukraine, also developed its Draft Law on Energy Efficiency in Buildings and submitted it for
approval. However, it has been returned by the Cabinet of Ministries for further development.
In terms of Building Codes, the first step to improve energy efficiency in buildings in the Ukraine
was made in 1993–1995 when normative thermal requirements to building envelopes were
significantly increased. In 2006-2007 the new standards for building envelope (ДБН В.2.631:2006 “Building Structures Thermal Insulation of the Buildings”), were introduced and are
enforced since 1.04.2007.
After introduction of standard “ДБН В.2.6-31” during 2008-2010, the Ukraine started preparing a
new set of norms and regulations that are supporting implementation of energy efficiency. New
standards introduced requirements on energy efficiency in buildings, as well as classification of
buildings with energy performance rates and procedures for issuing energy passports of
buildings for new or reconstructed buildings. The new standards introduced a flexible approach
of designing thermal protection of building envelope based on minimum requirements for the
building elements or total maximum specific energy use for heating.
However, the current Ukrainian regulations do not reflect the EN Standards and do not fully
support implementation of the EPBD. Therefore a lot of effort is required from the Ukrainian
Government to harmonize its legislative basis with the EPBD, including secondary legislation
and regulations. In general, energy certification procedures for buildings are not yet established
in the Ukraine. Thus, it is necessary to develop corresponding normative documents that will
establish methodological principles, procedures, and legislation basis for energy certification of
buildings, including but not limited to selection of energy rating, selection of calculations
method/measurement method with adjustments, adjustment of national reference values
according to newly accepted calculation method, defining procedures and rules for energy
auditing and certification of buildings, defining national conversion factors (for primary energy
and CO2 emissions), defining training requirements for certification experts and energy auditors,
defining inventory of certified auditors, buildings, benchmarks, progress reporting, etc.
45
Also, the Ukraine needs regulations for inspection of heating and air-conditioning systems in
buildings, as well as relevant framework for independent verification of such inspections and
energy performance certificates being performed by qualified experts.
It is highly recommended that the following assistance is provided to the Ministry to ensure
gradual transposition of the EPBD requirements to Ukrainian legislation and building regulation:
 Support the Ministry in further development of the Law on Energy Performance of Buildings,
to reflect the EPBD articles.
 Introduce calculation methods for energy need and energy use that follows EU
methodologies, as indicated in EN ISO 13790 “Energy Performance of Buildings –
Calculation of energy use for space heating and cooling” and EN 15603 “Energy
performance of buildings – overall energy use and definition of energy ratings”, together with
all necessary supportive EN Standards.
 Recalculate minimal energy performance requirements (currently presented in “ДБН В.2.6 –
31:2006”) in accordance with the new calculation methodology, taking into account
modifications to the minimal requirements on building envelope and building technical
systems and components, as mentioned in “Immediate” recommendations.
 Conduct a number of capacity building activities to enhance working knowledge of national
building authorities and to raise awareness of the approach and impact of the revised
standards.
The next steps in supporting transposition of EPBD in the Ukraine could involve:
 Gradual acceptance of EU standards supporting the EPBD (in ventilation; domestic hot
water, heat, and power generation; lighting; cooling; etc.). These accepted standards shall
have corresponding national annexes or specifications. Energy Performance requirements
for these systems will have to be developed.
 Introduce regulations stipulating main input parameters for feasibility assessment of energy
efficiency solutions, with intention to establish a common basis for comparison of economics
of energy savings interventions.
 Introduce legislation and regulatory basis for obligatory inspection of heating, air
conditioning, and ventilation systems with the focus on energy efficiency, as described
above in EU countries according to EN 15239 on inspection of ventilation systems and in EN
15240 on inspection of air conditioning systems.
 Introduce obligatory requirements for application of renewable energy sources for both heat
and power generation and for new construction or reconstruction, unless it can be
determined that such applications are not feasible for specific objects.
 Revise the Ukrainian standard for thermal protection of buildings, aiming at introducing
“near-zero buildings” as it is currently stipulated in the EPBD of 2010 for EU Member States.
 Provide capacity building activities to and raise awareness of the approach and impact of the
revised standards.
46
3.
OWNERSHIP AND MAINTENANCE ISSUES
This section describes the issues of ownership and maintenance of multi apartment buildings,
models currently used for maintenance of residential buildings and models for providing housing
and communal services. It also provides comparison of the Ukrainian and Slovak management
models and approaches.
3.1
FORMS OF OWNERSHIP
The residential sector in Ukraine is in general comprised of residential buildings and residential
premises in other-then-residential buildings. By ownership, the residential sector is classified as:
 State sector - residential buildings and residential premises in other buildings belonging
to the state, managed and maintained by public authorities and by other entities in the
cases established by law;
 Municipal sector - residential buildings and residential premises in other buildings
belonging to territorial communities, managed and maintained by such communities and
local self-governance bodies
 Private sector - residential buildings, or parts of buildings and apartments owned by
individuals and by legal entities
Adoption of the Law on Privatization9 provided basis for privatization of apartments in multiapartment buildings, rooms in apartments and a single apartment buildings with two or more
tenants. Today, the majority of apartments in multi-apartment buildings are privatized, with only a
small number owned by municipalities.
In absence of a “single owner” of the multi-apartment building, the management role is to be
assumed by co-owners. The privatization and condominium related laws of Ukraine10 established
two types of the residential sector management:
 Buildings without established condominiums. Management and maintenance of these
buildings continues to be performed by the municipal maintenance organizations
 Buildings with established condominiums. Management and maintenance of these
buildings is performed or organized by the co-owners.
3.2
MODELS OF OWNERSHIP AND MANAGEMENT IN RESIDENTIAL SECTOR
3.2.1
Ownership System
In principle, apartment buildings consist of apartments, common use premises and structural and
engineering elements (internal engineering systems, stairs, elevators etc). Before privatization,
buildings were fully owned and managed by the state. By privatization, the titles to the
apartments were transferred to their respective tenants who became the new owners of the
apartments and also joint owners of the common spaces of the apartment building with all
relevant rights and responsibilities11 including the responsibility to share the cost of repairs and
maintenance of the common property, in a level according to their respective share of ownership.
9
10
Law of Ukraine on Privatisation of the State Residential Sector No. 2482-ХІІ of 19.06.1992, Law of Ukraine on
Condominiums No. 2866-III of 29.11.2001.
11
Articles 368 and 369 of the Civil Code of Ukraine.
47
The apartment ownership is confirmed by the title deed, while the ownership of the joint property
in an apartment building does not need to be attested by any documents.12 Owners of buildings
or complexes of buildings and structures can be individuals or legal entities. The Civil Code of
the Ukraine establishes13 that the owners are free to possess, to use, and to dispose of their
property at their discretion. All owners are ensured equal opportunity for the exercising their
rights.
The legislation also establishes owners responsibility to maintain their property unless another
entity is assigned by agreement or by the law14 to do so. It should be noted that the owners of
non-privatized apartments in apartment buildings own auxiliary premises under the same
conditions as the owners of the privatized apartments.15 Thus, all apartment owners in apartment
buildings are obliged to maintain the commonly owned property. Private property (apartments) is
managed by its owners (individuals and legal entities). Joint property (auxiliary premises in
apartment buildings, etc.) is managed by a legal entity which holds the relevant apartment
building on its balance.
The Ukrainian system of apartment ownership is of a dual nature with private ownership of
residential and non-residential premises in residential buildings alongside with the joint
ownership of the common use property as established by the Civil Code of Ukraine.
3.2.2
Owners Organization Structures
For the purpose of efficient management and maintenance of their buildings, apartment owners
in multi apartment buildings may establish associations or unions of individual apartment/building
owners16 in a form of condominium or housing/construction association, or they may chose not to
organize. One of the features of the Ukrainian system is that participation in any union or
association is voluntary, as it is envisaged by the Ukrainian constitution. The law does not oblige
residents to join any associations, including condominiums or any form of housing associations.
Condominiums
Condominiums are established for the purpose of securing and protecting the rights of its
members and to ensure execution of their obligations to properly maintain and use of the
indivisible, joint property, to ensure timely receipt of funds for all payments envisaged by the law
and by statutory documents.
Co-owners of apartment buildings which are organized in condominium assume responsibility for
management and proper maintenance of their building, for establishing and maintaining
procedures for members relations and dealing with each other and to support relations with
producers and providers of utility services, etc. The condominium and its “general meeting” as
the management body operates in accordance with the law of Ukraine and its charter approved
by the general meeting. The charter establishes all the procedure for decision- making process,
including decisions related to capital repair of the building and on implementation of energy
efficiency measures.
Housing and Construction Cooperatives
12
Constitutional Court Judgement No. 4-рп/2004 of 02.03.2004.
13
Art. 319 of the Civil Code of Ukraine.
14
Art. 22 of the Civil Code of Ukraine.
15
Constitutional Court Judgement No. 4-рп/2004 of 02.03.2004 р.
16
48
Another form of association of apartment owners is the “Housing and Construction Cooperatives”
(HCC) that is registered and operates on the basis of its charter approved in accordance with the
HCC Model Charter17 by its general meeting of the citizens joining the cooperative. The HCC
members, who have fully paid for the residential premises and their share in non-residential
premises and other property share, own such premises. HCC may be reorganized into
condominiums by the decision of the general meeting.
Non-Organized Owners
The management and maintenance of buildings without organized condominiums should also be
performed by the apartment owners. Currently, buildings without organized management body
are maintained by housing and maintenance organizations (HMO) – so called Zhek (HMO),
selected and engaged by the local self-government. HMO is contractually required to keep the
respective buildings on their balance sheet, however, in most cases no such contract exists. It is
usual occurrence that while the HMO performs the regular maintenance of buildings, they mostly
fail to fulfill their management role and are not capable of performing or organizing the capital
repairs.
3.2.3
Land Issues
Use of the land plots, where the residential buildings and adjacent territories are located, remain
to be an important issue for buildings with organized and non-organized owners. The Land Code
of Ukraine establishes that18 local self-government bodies provide land plots to residential
housing and construction cooperatives free of charge or lease them in the size established in
accordance with the city development documentation.
If an apartment building is privatized, the land plot where it is located, as well as the auxiliary
premises and adjacent territories may be transferred into ownership of new owners free of
charge or provided to condominiums for their use. If a number of persons acquire titles to a
residential building or construction, the land titles are distributed in proportion to such persons
ownership rights to the building or construction.19 The land plot becomes joint property of the
residential building co-owners. The ownership titles and the right to use the land plot are
confirmed by a relevant state deed. The size and configuration of such land plots are defined on
the basis of the city block and micro-district designs and land arrangement documentation
The procedure for the use of the land plots where residential apartment buildings are located, as
well as use of auxiliary premises, constructions and adjacent territories is then established by the
co-owners.
The law grants the apartment building co-owners an explicit right to acquire the land plots on
which the residential building is located, as well as the auxiliary premises and adjacent
territories. In practice, however, co-owners of residential buildings are prevented from exercising
their right to acquire such land due to lack of definition of borders of the “adjacent territories”.
Such land plots have not been allocated, and thus there is no technical documentation for such
land plots.
17
Resolution No. 186 of the Council of Minister of the Ukrainian Soviet Socialist Republic on Approval of the
Model Charter for a Residential and Construction Cooperative of 30.04.1985.
18
Art. 41 of the Land Code of Ukraine.
19
Art.120 of the Land Code of Ukraine.
49
3.2.4
Conclusions
Dual Ownership System
The dual nature of ownership introduces certain complications to management and maintenance
of the multi apartment buildings, related premises and technical equipment. This is exaggerated
by the lack of technical documentation of common property and lack of legal documents to its
ownership that are essential for the common property disposal process.
In reality, in spite of the legislative requirements, apartment owners fail to perform their
obligations and buildings continue to be managed by the local self-government bodies. One of
the substantial reasons is that apartment buildings co-owners are not used to be responsible for
the condition of their building and are not very active in getting involved in the management and
maintenance of their building, especially when it comes to capital repairs. The second, very
important reason is that the law does not define co-owners’ direct liability for poor management
and maintenance of their buildings. Thus, it is impossible to force co-owners of apartment
buildings to engage in a process of executing capital repairs.
Decision-Making Procedure
There are considerable differences in the legal bases and in a practical process between the
decision making by organized co-owners of multi-apartment building and those not organized. It
is indisputable fact that organized co-owners enjoy many advantages.
In case of organized co-owners, the condominium association or HOA and its executive body
(general meeting) is authorized to make decisions on implementation of energy efficiency
measures. The rules on eligibility of the meeting to vote, required number of votes for decision to
pass in regular and in important issues is set by the Model Charter. Meeting vote is based on
principle of “one-member-one-vote”20. The same decision-making procedure has been
established also for the Housing and construction associations.
The situation in decision making process is quite different in case of non-organized owners. The
law does not provide any guidance for clear decision-making procedure for the owners of
residential and non-residential premises in the residential buildings that are not organized either
in condominium or in other form. In principle, decision making process by non-organized coowners should be governed by the Civil Code of Ukraine21. Civil Code states that any decision
related to a joint property, including its disposal, modification or capital improvements requires
agreement of all co-owners and in certain cases the agreement must be in writing and notarized.
In reality, obtaining agreement on such issues is unrealistic and makes it impossible to
materialize any such activity as capital repairs of the building.
Capital repair fund
One of the mechanisms to ensure funding for energy efficiency measures in apartment buildings
is establishment of a capital repair fund.
The law establishes an obligatory requirement for condominiums to set up a capital repairs
fund22 to accumulate funds for repairs of the indivisible joint property and for urgent repairs of
any damage that may have been caused by an accident or unforeseen circumstances. This fund
may as well be used for funding capital improvements and energy efficiency measures. The
assets for such funds are deposited in the condominium’s bank account and are used only for
the targeted purpose.
The list of the obligatory payments for maintenance and repair of the indivisible and joint
property, as well as the payment procedure are established by the condominium charter. In order
to ensure that the owners fulfil their obligations, the condominium is entitled to demand timely
20
Law of Ukraine on Condominiums of 29.11.2001, No. 2866-III.
21
Art.369 of the Civil Code of Ukraine.
22
50
and full payment of contributions to the repairs funds. Condominium is entitled to file claims with
courts against the property of the owners who refuse to make timely and full payments to the
repairs funds.
Establishment of a capital repairs fund in the buildings with non-organized owners could help to
accumulate assets to finance energy efficiency measures. The law, however, does not oblige
non-organized owners to establish such fund. Lack of understanding of their responsibility for
maintenance of the joint property, gives no incentive to non-organized owners to make a
voluntary decision on establishment of a capital repair fund and the procedure for its
replenishment. Inability to establish and operate capital repair fund in this case is exaggerated by
the inability of non-organized owners to make any decisions.
Land Issues
The Land Code of Ukraine establishes only general rights of the owners of residential buildings
to own the land plot on which the building and the adjacent territory are located. It also sets the
general procedure of the land allocation, which is far too complicated. Residential building
owners could better exercise their rights to a land title if there were clear and transparent
procedures for the definition of borders of adjacent territories and allocation of relevant land plots
and other technical documentation.
In relation to the energy efficiency improvements financing, it is important to note that as the
procedure for the use of the land plots should be defined by the co-owners23, the land plot owned
by the residential building co-owners may be used as collateral for securing loan for capital
repairs and for implementing energy efficiency measures.
The law grants the right to acquire and use the land only to the co-owners organized in
condominium or in other forms only. The co-owners of buildings that are not organized do not
have that right.
3.3
MANAGEMENT MODELS
3.3.1
General Management Principles
The law defines that housing stocks are managed by balance keepers24 and that the indivisible
joint property in a residential buildings is managed by the manger. The “balance keeper” is the
owner or a legal entity which keeps the relevant property on its balance sheet on the basis of a
contract. Such entity maintains accounting, statistical and other data required by law, performs
calculations of funds necessary for the capital and current repairs and maintenance, and
performs general management of the property including its proper use as required by law25. The
act of “keeping residential building on the balance sheet” is interpreted as a requirement by the
law to “manage the building”.
The legislative provisions suggest that there are four models for the management of apartment
buildings:
 Model 1. Apartment building management by housing and maintenance organization;
 Model 2. Apartment building management by condominium;
 Model 3. Apartment building management by managing company;
 Model 4. Apartment building management by housing and construction cooperative.
3.3.2
Model 1 - Apartment Building Management by Housing and Maintenance Organization
M 1.1 Description
23
Art. 42 of the Land Code of Ukraine.
24
25
Law of Ukraine on Housing and Municipal Services of 24.06.2004, No. 1875-IV .
51
At this time, the majority of apartment buildings in Ukraine are kept on the balance sheet of
specialized municipal companies – the housing and maintenance organizations (the HMOs).
Practically all buildings without organized condominiums are managed by HMOs. Supposedly,
the HMOs managing the buildings based contract supported by unanimous decision (100%) of
the non-organized owners. Co-owners organized in condominium or in other form may, based
on decision of the general meeting, also contract with HMO to keep their building on HMO
balance sheet and perform management functions.
As a balance keeper, the HMO performs the following functions:
 Keeps the building on its balance sheet;
 Manages the building;
 Ensures proper use of residential facilities;
 Provides housing and communal services to the residents;
 Maintains the residential building and the adjacent territory.
М 1.2 Decision-Making Procedure
Under a general rule, the co-owners of an apartment building should make their decisions on the
management and maintenance of their buildings on their own. To adopt any decision on the joint
property in an apartment building with no condominiums, there is a need for 100% of the owners’
votes, which is practically impossible to achieve. As non-organized owners are not able to make
decisions on their building management and maintenance, the local self-governance body
appoints an HMO as a housing and communal services provider to maintain the building. In this
case, the HMO only provides services, but does not manage the building. The HMO keeps the
respective buildings on their balance sheet without the relevant contracts, and in absence of any
legal grounds.
If organized owners decide to ask an HMO to provide the above services, the decision on the
balance keeping and transfer of building management functions should be done by the
condominium general meeting in accordance with the procedure established by the
condominium charter. After the balance keeping and management contracts are concluded
between the condominium and the HMO, the decision on capital repairs should be taken by the
condominium general meeting in accordance with the procedure established by law, or by the
manager in accordance with the contract and the charter.
M 1.3 Energy Efficiency Measures Funding Possibilities
This management form makes it practically impossible to implement any energy efficiency
measures. Even though the majority of residents in such buildings realize the necessity to
implement energy efficient technologies, their funds are insufficient for such projects. In view of
the decline of the residential facilities and the necessity of their capital repairs, expectations of
funding of energy efficiency measures by HMOs would be unrealistic. In addition, the building
and adjacent territory maintenance tariff does not include a capital repair component, thus
preventing HMOs from collecting funds to finance capital repairs.
In order to fund energy saving projects, local self-governance authorities have adopted relevant
programs within the framework of the National Program for the Utilities Sector Development in
2009-2014. The financial resources, however, that can be allocated by local self-governance
authorities to implement energy efficiency projects are insufficient, as such funding is rather
insignificant when compared to the needs of the residential facilities.
The main obstacles in an effort to obtain funding for energy efficiency measures are as follows:
 Absence of a realistic mechanism for the co-owners of a residential building to make
decisions on the building improvements (achievement of a 100% consent is unrealistic);
 Absence of legislative requirements to accumulate funds by non-organized co-owners for
building improvements;
52
 Lack of contracts between non-organized owners and balance keepers (HMOs) on the
building management that may include implementation of energy saving measures.
3.3.3
Model 2 - Apartment Building Management by a Condominium
M 2.1 Description
A condominium is established as a legal entity for apartment building management and
maintenance. After a condominium becomes a legal entity, it may:
 Accept the apartment building on its balance and perform management through its
executive body (general meeting);
 Contract with the previous owner as the balance keeper for the building or its parts,;
 Contract with any legal entity that has a charter for such activities. In this case, the
building management is based on Model 3.
Condominiums are established by founding meetings which require a quorum of more than 50%
of the apartment owners. No less than 2/3 of the apartment owners present at the meeting
should vote to support establishment of a condominium.
Decisions that concern building management and maintenance, in particular the capital repairs
and energy efficiency measures, should be passed in accordance with the procedure established
by the condominium charter.
Should the condominium fail to choose a housing and communal services provider
(maintenance, management, and provision of district heating services, hot tap water supply, cold
water supply, and water sewerage) on its own, such provider is appointed by the local selfgovernance body in accordance with its powers established by law.
M 2. 3 Energy Efficiency Measures Funding Possibilities
The National Program for the Utilities Sector Development in 2009-2014 envisages funding of
the energy efficiency measures in the apartment buildings that established condominiums. Under
the Program, the local self-governance bodies should allocate local budget funds to implement
energy saving measures. However, considering the realistic needs for capital repairs, the level of
allocated and available resources is far from sufficient.
Even though the law requires that condominiums establish capital repairs funds, the
contributions made by the apartment co-owners to these funds are insufficient for funding the
energy saving projects.
Condominiums as legal entities may request a loan from a bank to fund energy saving projects;
however banks require collaterals to securing the loan that a condominium cannot provide at this
time. High risks of a default on a loan and lack of collateral prevent condominiums from getting
loans, or at least makes it very difficult. Condominiums may also request loans from construction
companies, which may fulfil the necessary repair works, including energy saving measures, with
deferred payment for such works. The repayment period is rather long, and therefore the
construction companies are not interested in cooperating with condominiums.
The main obstacles to the attraction of funding for implementation of energy saving measures in
this case include:
 Lack of property that can be accepted as a collateral for loans,
 Lack of a mechanism for enforcing payment, including impossibility of claims against
debtor’s property
 Lack of simple, transparent mechanisms for debt collection from individual owners (both
members and not members of condominiums) for the current payments and targeted
contributions;
53
 Lack of technical documentation for the land plot where the building and the adjacent
territory is located, thus inability gain ownership and to offer the land plot as collateral.
3.3.4
Model 3 – Apartment Building Management by a Managing Company
М 3.1 Description
An apartment building can be managed by various organizations and legal form entities.
Business operators, registered in accordance with the law as legal entities, may provide
apartment building management services, if they meet the following requirements:
 Provision of apartment building management services is part of the business operator’s
business activities;
 The business operator holds all permits and licenses required by law.
Apartment building management services may also be provided by private entrepreneurs. In this
case, such entrepreneurs should mention apartment building management among the types of
their business activities in their registration documents. Relations between the apartment
building co-owners (owners of apartment and non-residential premises) and the manager are
based on contractual principles. A model agreement governing the relations between owners of
residential and non-residential premises and the manager was approved by the Cabinet of
Minister of Ukraine26. The manager’s main obligations are as follows:
 Operation of the building and the facilities located on the adjacent territories in
accordance with the contracts, standards, norms, and rules;
 Provision of services on maintenance of buildings and adjacent territories;
 Ensuring high-quality water supply and sewerage collection and heat supply services.
This management form can be used to manage their buildings both by organized and nonorganized owners. To pass the functions on the building management to a manager, the
organized owners should make the relevant decision in their general meeting in accordance with
the procedure established by the charter. The non-organized owners should pass their decision
by 100% of votes. The transfer of management functions should be done on the basis of a
residential building management contract between the owners and the manager. The owners
may pass either all or part of their functions on the building management and maintenance.
Since the manager’s obligations include maintenance of the building, the decision on the capital
repair and implementation of energy efficiency measures may be made by the manager on the
basis of the contractual requirements. Otherwise, the manager should arrange adoption of such
decision by the apartment owners.
Should apartment owners fail to appoint a manager on their own, the manager is supposed to be
appointed by the local self-governance body.27 The local self-governance body should conclude
a management service agreement with the manager, while the manager should, within 30
calendar days after the above contract is concluded, make management service contracts with
the apartment owners.
In practice, however, local self-governance bodies mainly appoint service providers for the
maintenance of buildings, constructions, and adjacent territories, rather than for their
management. This is, primarily, due to the fact that the manager’s functions, for which the
26
CMU Resolution No. 1521 11.10.2002 on Implementation of the Condominium Law.
27
Order of the State Committee for Housing and Communal Services on Approval of the Procedure Followed by the Housing
and Communal Service Providers in the Residential Section (No.60 of 25.04.2005).
54
manager is remunerated, are not clearly defined, and local self-government bodies are not able
to ensure management of residential buildings.
M 3.3 Energy Efficiency Measures Funding Possibilities
Under this management form, energy efficiency measures may be funded only through financial
assistance from the state or from local budgets and by securing loans. As mentioned above,
however, financial resources available are insufficient for implementation of energy efficiency
projects. Legal obstacles for attracting funding for implementation of energy saving measures in
this case are the same as listed under Model 1 and 2.
3.3.5
Model 4 – Apartment Building Management by a Housing and Construction
cooperative (HCC)
М 4.1. Description
The housing and construction cooperative is one of the forms for association of individual owners
to manage and maintain their building. The HCCs28 can perform:
 Building management;
 Keep the building on their balance;
 Ensure proper use of their residential property;
 Provide housing and communal services to the residents;
 Maintain the residential building and the adjacent territory.
HCCs may manage and maintain residential buildings through their statutory bodies. HCCs may
also transfer management and maintenance functions to the manager.
М 4.2. Decision-Making Procedure
Decisions on the HCC operation are made by its executive body, the general meeting of the
cooperative members. The decision making procedures for the general meetings should be
established by the HCC charter. As a rule, the general meeting quorum is made up of more than
50% of its members present at the meeting, while decisions are made by no less than 2/3, and
in some cases ¾ of the cooperative members present at the meeting.
M 4.3 Energy Saving Measures Funding Options
Under this management form, energy efficient measures can be financed through the funds
accumulated by HCC members, from state budget, grants, or through loans. In practice, any
improvements in the HCC buildings are done at the expense of the HCC members. HCC may
set up capital repair funds to accumulate the financial means necessary to financing the
improvement in buildings. In addition, the HCC charters or general meetings may establish
mandatory targeted contributions for capital repairs and implementation of energy efficiency
measures.
In this case, legal barriers to the implementation of energy efficiency measures include the
following:
 Lending institutions are unaware of the HCC particular legal status and the mechanism
that can be used to secure the loan;
 Like condominiums, HCCs have no property that can be used as collateral to secure loan
 Absence of clear mechanism to collect debts from HCC members under the HCC
obligations, which is regarded as a risk by lending institutions.
28
Residential Code of Ukraine
55
3.4
COMPARISON OF UKRAINIAN MODEL WITH OTHER COUNTRIES
Comparison of the current models of ownership and maintenance of the multi-apartment
residential housing with relatively well functioning models applied in Slovakia shows that several
issues need to be addressed in the Ukraine’s housing policies. Comprehensive gap analysis of
the current Ukrainian Law “On Association of Co-Owners of Residential Buildings” with the
Slovak “Law on Condominiums” as well as with the Slovak Housing Policy was performed as
part of this assignment and it is provided in Annex 48. As part of this assessment, a review of the
latest amendment of “ Draft Law of Ukraine “On Association of Co-Owners of Residential
Buildings” was performed and the summary of this review is provided in Annex 49.
Firstly, the terms “co-ownership of real estate” should not be confused with “apartment
ownership based on condominium principles of ownership”, with the later entailing a direct
ownership of an apartment and co-ownership of common parts of the building and the common
installed equipment. Co-ownership is defined by civil code and it is applied in cases of family
homes or in apartments owned by more than one owner (for example when inheritance is
divided into several people). In Slovakia, the co-ownership is also applied in case of ownership
of property by husband and wife.
In Slovakia the entire state-owned residential housing sector was transferred in 1992 from state
to municipal ownership, and in 1993 a new adopted law (amendment of civil code) provided the
possibility for residents to purchase their apartments at reduced prices. In case of cooperative
ownership, the remaining principle of state loan was paid to gain full ownership.
Sale of the first apartment in the building transferred the ownership of all apartments to
condominium-type of ownership. This means that apartments not yet sold remaining in the
ownership of municipality were responsible to contribute to the fund and had the same rights and
responsibilities as the sold apartment. As a principle, a decision cannot be made for the
residents of the apartments by others - not the municipalities or any maintenance organization.
The law also dictated that the apartment building with apartments owned by the residents cannot
be without maintenance/management. Management can be performed either by the association
of owners or apartment owners and can execute a contract with a specialized, licensed
organization. Such organization could be selected based on the decision of the owners. This led
to establishment of many maintenance organizations and individuals providing such services,
which created a competitive environment, and thus better service quality. The former state
maintenance organizations (“Zheks”) practically do not exist. Some were transferred to private
organizations and some were dissolved. As an example, in Bratislava, all five state/municipal
maintenance organizations (“Zheks”) were dissolved and in their place around 40 private
maintenance organizations were created.
As part of the apartment ownership transfer, each apartment has allocated part of the common
part of the building. The allocated size of the common property depends on the total size of the
living space and the size of the apartment ratio. This report does not provide information if and
where the allocated part of the common property is registered. In Slovakia, the ownership of real
estate is registered with Cadastre, who also issues the ownership documents. The definition of
the allocation of common property is important for allocation and contribution to the maintenance
fund, which must be established and operated according to the law. The payment size is defined
by the owners, based on expected needs. This fund is a basis for implementing maintenance
and improvements to the property and plays the decisive role in revocation of apartment
buildings. Currently, many banks provide loans based on information on the creation and
maintenance of the funds and do not require bank guarantees.
The responsibility to create and maintain the fund is set by the law for all owners of the
apartments as lean and the responsibility is registered in Cadastre (Land register) and has the
highest priority during the execution event against a non-payer. Fund resources can also be
combined with bank loan, grants (such as Eco-funds), and with state subsidies, if any.
Municipalities do not provide any support to residential building stock maintenance or
reconstruction and only have a role during the permitting period.
56
After 1992, when the system of state-funded construction of apartment buildings was abolished,
the analysis showed that the required investment to compensate for neglected maintenance of
residential buildings would cost approximately two years of state budgets. This clearly showed
that the State was not really a good owner of the residential stock assets, in spite of the quite
high state subsidies provided over the years. This was one of the reasons for privatizing the
residential sector. It also becomes apparent that the state must provide a legal environment for
new financial resources to be used for construction of new buildings as well as for reconstruction
of existing building stock. It is the rule that the owner of the property is the best manager of the
resources.
In Slovakia, after the laws were adopted in 1992, the following financial resources were created
or reactivated:
 System of “construction savings” with state support (1992)
 Mortgage loans (1994)
 State fund for development of residential sector (1996) as revolving fund
 State grant system to compensate for design flaws (1996)
 State guarantees program (2000)
The public funds are in principle and applied only as a motivation incentive tool and represent
only a small part of the required investment. The rest of the investment is provided by the owners
from different sources, and the repayment is based on savings resulting from improvements in
energy efficiency. on average, energy savings of 35-40% were attained.
In conclusion, it is possible to say that it is necessary to re-evaluate the approach for renovation
of 90% of the privatized residential sector in the Ukraine and create a legal and financial
environment for the apartment owners, which will allow them to make their own decisions while
they provide the required technical support.
3.5
CONCLUSIONS
Out of the four models of management of multi-apartment buildings defined by the Law of the
Ukraine, the most efficient model is the management through established condominium and
HCC through their executive bodies described in Model 2 and Model 3 respectively. However, all
models face certain legal difficulties when it comes to legal mechanisms that can be used to
obtain funding for capital improvements and for energy efficiency investments. Exhibit 28
summarizes the barriers for obtaining loans for capital improvements and for energy efficiency:
Exhibit 28 Barriers for obtaining loans
Management model
Without condominium
With condominium
Any decision needs to be taken by 100%
votes of the apartment building residents
The decision-making procedure is established by
the condominium charter
No management body that would arrange
decisions to be taken by the residents on the
building management and maintenance
(capital repairs, introduction of energy saving
measures etc.);
Quorum is required to solve issues on building
management or repair (introduction of energy
efficiency measures).
Local self-governance bodies define the
building maintenance service provider;
Condominiums lack property that can be used as
collateral to secure borrowed resources;
The property legal status principles are not
clear – the owners do not realise their
No mechanisms for condominiums to claim the
non-payers’ property; and
57
obligations to maintain joint property
The joint property cannot be used as collateral
to secure borrowed resources;
No transparent and clear mechanisms to collect
debts from individual owners on current
payments and targeted contributions.
A complicated and unclear procedure used to
make decisions on the joint property
management and maintenance (repairs,
introduction of energy efficient measures);
and
No requirements on the setup of a reserve
fund.
3.6
RECOMMENDATIONS
The results of analysis of the residential buildings ownership and management forms support the
following recommendations for removal legal barriers to the funding of energy efficiency
measures:
 Building management models that are effective and provide for proper management,
maintenance and improvements of the multi-apartment buildings, such as Model 2 and
Model 3 should be preferred and incentive mechanism should be developed, introduced
and supported by the state and by municipalities to make it attractive for the co-owners of
such buildings to organize and take ownership of their assets seriously. Experience from
other countries strongly suggests that such approach is the only way to ensure
improvements of the residential stock and introduction of energy efficiency.
 To support introduction and expansion of effective management models, a significant
public awareness campaign should be supported by the state and continuation of support
by international donors should be encouraged.
 Resolution to the issue of land transfer to the co-owners should be sought to allow
smooth transfer to the land. In this regard, the procedure should be established to define
borders of adjacent territories (for buildings with and without condominiums) and to
allocate land lots where buildings, constructions, and adjacent territories are located;
 To facilitate the lending process for funding, the capital improvements and introduction of
energy efficiency in residential market, improvements of legal framework will be required
to:
 Develop clear and effective mechanism for debt collection from individual apartment
owners;
 Develop mechanisms for condominiums to secure loans acceptable to the lending
institutions;
 Develop mandatory establishment and maintenance of capital repair fund.
 It is further recommended that state assistance for residential stock improvement and for
introduction of energy efficiency measures through subsidies and other relevant financial
assistance mechanisms are targeted to projects as “motivation assistance” rather than
grants covering large part of the investment. Projects receiving such state support should
be selected on competitive basis and should comply with certain criteria that may include
energy saving potential, replicability, and overall impact on residents.
 The process of residential buildings improvements should be planned as a staged, multiyear process with gradual increase in funds collection and build up. Experience from
other Eastern European countries will serve as good guidance.
58
4.
RESIDENTIAL INSTITUTIONAL ARRANGEMENTS
This section provides information on existing residential institutional arrangements that include
legal and contractual basis for provision of required housing and communal services to
residential customers and for capital improvements of residential buildings including energy
efficiency measures.
4.1
GOODS AND SERVICES IN HOUSING AND COMMUNAL SERVICES MARKET
Ukrainian housing and communal services market can be theoretically divided into two
distinguished segments – housing (buildings) and supporting infrastructure that consist of
production and supply of goods and services to the boundary of the building. For better
understanding of the relationships between the market participants and consumers, it is useful to
identify the list of goods and services that are provided to the consumers in the residential
buildings:
1) Communal services include centralized cold and hot water supply, sewage, gas and
electricity, centralized heating, household solid waste disposal, etc.;
2) Maintenance services for buildings and adjacent territories include cleaning of
buildings internal premises and adjacent territory, sanitary and technical service,
maintenance of internal buildings installations, maintenance of elevators, illumination of
common areas, miscellaneous repairs, etc.;
3) Management services for single or multiple buildings include maintaining building
assets on balance sheet, execution of service agreements, and control of implementation
of the agreement's provisions, etc.;
4) Repair services of buildings, houses, and related premises include replacement and
reinforcement of structural and networks elements, their reconstruction, bearing capacity
retrofit, etc.
The Ukrainian legislation uses the word “service”, for those services supplied to the customers in
individual apartment, and the word “goods”, for those services supplied to the apartment block
level. At the same time, electric energy and gas are defined by the laws as “goods”29, regardless
of the fact that these utilities are supplied to the end user in the apartment as a communal
service30.
Such differentiation of terms creates a lot of misunderstanding for the market participants and
customers. Specifically, a confusion is created by two different definitions of communal services:
(1) according to the Law of Ukraine «On National Commission of Regulation Communal Services
Market» the communal services are heating energy (as traded good), and centralized water
supply and sewage collection services, (2) while according to the Law of Ukraine “On Housing
and Communal Services” communal services include centralized heating, hot and cold water
supply and sewage collection services. The latter definition by the law implies that the services
are to be supplied to the level of the individual apartment.
The licensees of the national regulator are supposed to supply the first group of communal
services (which are mentioned above) within the requirements that are set by the terms and
rules of the licensing conditions, from the text of which it is possible to conclude that the border
of responsibility for the licensed company ends at the level of the apartment block31;. The second
29
30
31
LsoU «On Electric Energy», «On Functioning of the Gas Market»
Art.14, LoU «On Housing and Communal Services»
Order of the State Committee for Regulatory Policy and Entrepreneurship of Ukraine and the Ministry of Utilities of Ukraine
on Approval of the Licensing Conditions for Business Operations on Heat Energy Production (Excluding Heat Energy
Produced by Heating Plants, Co-Generation Plants, and Non-Traditional and Renewable Energy Plants) No. 167/417 of
59
group of communal services is supplied by the so called “providers of services” to the end
consumer in apartment. Local self-government body32 nominates such providers for supplying
the service to the end consumer in the apartment of the multi-apartment building.
Thus, the laws created a situation, when heating energy, water and sewage can be supplied
by the same entity (utility) as goods and communal services (centralized heating,
centralized cold and hot water supply, sewage). The impact of such differentiation on
institutional arrangements in the sector is described in section 4.2 of this report.
Maintenance services for buildings and adjacent territories (further – maintenance services)
include a whole set of individual services. Cabinet of Ministers of Ukraine defines a detailed list
of such services33 and it includes:
 Cleaning of the staircases, basement, technical floor, roof and adjacent territory and
snow removal,
 Garbage collection (collection, storage, transportation, processing, utilization, disposal
and burying)
 Maintenance of the systems of dispatching
 Technical; maintenance and repairs of the internal building systems including hot and
cold water supply; sewage system; heating system;, elevator(s), ventilation channels rain
water drainages and system located and fixed in a defined order to the adjacent territory
(including sports grounds, play grounds for kids and others)
 Technical maintenance and current repair of fire fighting systems, gas removal systems
and other building internal engineering systems if available
 Maintenance of number plates on the buildings
 Lighting of the common areas, basements, pumping of water and electric energy supply
for elevators
 Regular testing, maintenance and repair of apartment meters of water and heat energy,
including dismantling, transportation and set up after testing.
 Deracination; Disinfection
 Watering of yards, flower beds
Garbage collection services can be excluded from the list of maintenance services by the
decision of the local self-government body34 and defined as a separate service. In many cases
this service is provided separately to the end consumers residing in buildings with organized
condominiums, where services are usually provided based on contractual basis directly with the
provider.
In some cases, local self-governments excluded technical maintenance of lifts into a separate
service and allowed direct contracts of lift companies with the end users in apartments. Such
30 December 2008; Order of the State Committee for Regulatory Policy and Entrepreneurship of Ukraine and the
Ministry of Utilities of Ukraine on Approval of the Licensing Conditions for Business Operations on Heat Energy
Transportation by Backbone and Local (Distribution) Heat Networks No. 168/4184 of 30 December 2008; Order of the
Ministry of Utilities of Ukraine on Approval of the Licensing Conditions for Business Operations for Heat Energy Supply
No. 370 of 24 November 2009; Order of the State Committee for Regulatory Policy and Entrepreneurship of Ukraine
and the State Committee for Construction, Architecture, and Residential Policy of Ukraine on Approval of Licensing
Conditions for District Water Supply and Sewerage No. 35/34 of 14 February 2001.
32
Order of the State Committee on Utilities “On Approval of the Procedure for Definition of a Utilities Service Provider in
Residential Buildings” No. 60 of 25.04.2005 (further- Order #60 of 25.04.200)
33
CMU Decree on Approval of the Procedure for Formation of Tariffs for Maintenance of Buildings and Adjacent Territories
and the Model Contract on Provision of Services for Maintenance of Buildings and Adjacent Territories No. 529 of
20.05.2009.
34
Order #60 of 25.04.2005
60
decisions conflicts with current legal requirements and have no economic justification, since such
arrangements usually increases the costs of service to the end consumer.
Management services for buildings appeared in practice of housing and communal economy
sector only after 2004, when the law included such service in list of housing and communal
services35. One of the functions of the manager of the building that the law defined is so called
“balance sheet holding”, which literally means accounting of the building on the balance sheets
of the entity, which manages the building. A respective Cabinet of Ministers Decree36, stipulates
that the management services include “Ensuring sustainable functioning of the building pursuant
to its primary purpose, preserving its characteristics and organization of the owners’ needs,
needs of co-owners, renters, and lease holders of individual residential and non-residential
premises in timely housing and communal services of respective quality”. Such definition is not
very specific and for most people it is actually not very clear.
Repair services of buildings, houses, and related premises (primarily of capital nature) are
placed into a separate group. The provision of such services is carried out on a sub contractual
basis with the customers, which is described in more detail in the following section 4.2.
4.2
INSTITUTIONAL STRUCTURES AND THEIR RELATIONSHIPS
Participants of the housing and communal services market can be classified according to the
groups defined by various Ukrainian laws37:
 Customer of services - individuals or legal entity who uses or intends to use housing and
communal services; or who uses heat energy based on contract; or who uses drinking
water for satisfying physiological, sanitary and hygienic, house or commercial needs; or
who uses energy for own needs based on the contact on buying and selling; or
residential users of natural gas – physical entity, who receives natural gas for own needs,
including for making food, heating of water and heating of residential premises;
 Collective customer – Condominium, that is a legal entity created by owners for
assistance of their ownership usage and management, maintenance and use of
indivisible and joint property;
 Producer of housing and communal services (HCS) - economic entity producing or
creating housing and communal services;
 Provider of HCS - economic entity providing consumer with housing and communal
services according to terms of agreement;
 Manager – legal entity managing indivisible and whole property of the housing complex
under authority of the owner(s) of the property and ensures its reliable maintenance; (as
defined by the Law of Ukraine “On housing and Communal services”);
 The balance sheet holder of a house, building, housing complex or complex of houses
and buildings - is the owner or the legal entity that based on an agreement with the owner
holds the respective property on its balance sheet, performs accounting, statistical and
other reporting in accordance with legislation, carries out calculation of funds necessary
for timely execution of major repairs and maintenance, as well as provides for this
property management. According to the law, this entity is responsible for building
operation;
35
Law of Ukraine “On Housing and Communal services”
36
CMU Decree No. 484 on Approval of the Model Contract on Provision of Management Services for Buildings,
Constructions, Residential Complexes or Complexes of Buildings and Constructions of 20.05.2009
37
Laws of Ukraine “On Housing and Communal services, On the National Commission for Regulation of Communal services
Market, On Heat Supply, On Electric Energy, On Potable Water and Potable Water Supply, On Condominium
associations, and On the Natural Gas Market Functioning Principles
61
 Heat generating company – economic entity, which owns or operates heat generating
equipment and produces heat energy;
 Heat transportation company – economic entity, which transports heat energy;
 Heat supply company – economic entity which supplies heat energy to customers;
 Energy supply companies – members of the electric energy wholesale market of Ukraine,
who purchase electric energy at this market for resale to customers or for export;
 Gas supply company – economic entity, which supplies natural gas based on the license
directly to the customers according to the concluded contracts;
 Bodies of executive power (central bodies of executive power in the HCE38, state collegial
body39, oblast state administrations and other);
 Local self-governments bodies;
 Other market participants (subcontractors – construction companies, ESCO’s, private
investors etc.).
According to the laws, the relationships between customers of HCS and other market
participants supplying goods and services to the building should be based exclusively on
contractual terms. The legislation regulates such relations by setting requirements for
development and approval of tariffs, quality of services, as well as approval of typical
agreements for provision of the respective services.
End user (customer) of the services, which are listed in section 4.1 of this report, can be either:
 Individual customer - apartment level or non-residential premise
 Collective customer - building block level for the buildings with condominiums.
Depending on the types of services/goods provided /supplied to the building, the following types
of agreements can be concluded between the end consumer and the provider/supplier:
 Energy supply contract40; (or Energy supply contract41 and other resources contract42)
 Agreement on providing gas-supply services for population 43;
 Agreement on maintenance services of houses and buildings and adjacent territories44
 Agreement on provision of household waste transportation services
 The agreement on provision of services of district heating and hot water supply45,
 The agreement on provision of cold water supply and wastewater collection 46
 Agreement on providing management services47.
38
Now, the Ministry for Regional Development, Construction, and Housing and Communal Economy of Ukraine.
39
Today, the National Commission for Regulation of the Electric Energy of Ukraine (NERC)
40
See Art. 275 of the Commercial Code of Ukraine and CMU Decree on Approval of the Electric Power Use Rules for
Households No. 1357 of 26.07.1999.
41
See Art. 275 of the Commercial Code of Ukraine.
42
See Chapter 54 of the Civil Code of Ukraine
43
CMU Decree on Approval of the Gas Supply Rules for Households No. 2246 of 09.12.1999.
CMU Resolution on Approval of the Procedure for Formation of Tariffs for Maintenance of Buildings and Adjacent
Territories and the Model Contract on Provision of Services for Maintenance of Buildings and Adjacent Territories No.
529 of 20.05.2009
44
45
CMU Resolution on Approval of the Procedure for Provision of District Heating Supply Services, Cold and Hot Water
Supply and Water Sewerage, and the Model Contract for Provision of District Heating Supply Services, Cold and Hot
Water Supply and Water Sewerage No. 630 of 21.07.2005..
46
CMU Resolution #630 of 21.07.2005.
62
 Subcontract for capital construction 48
 Energy performance contract49.
4.2.1
Electricity and Gas Supply Contracts
Electricity and gas supply contracts are in most cases concluded by the electric and gas
companies with the end users being the apartment occupants. However, concluding electricity
and gas supply contracts with condominiums brings a serious practical problem that is caused by
the specifics of defining customer groups for those commodities and related tariff setting
procedures. Specifically, NERC Resolution of 10.03.99 No.309 "On Tariffs of Electric Power
Provided for Population and Settlements" (with further amendments and extensions), and NERC
Resolution of 31.07.96 No. 28 "On Approving the Rules of Using of Electric Power (with further
amendments and extensions), allocate such category of consumer as a "settlement". In practice,
NERC includes in this category (among others), also associations of consumers (population) –
condominium associations, HCCs, etc. – thus artificially separating these associations from
residential consumers. Considering the difference between the tariffs approved by NERC for
population and for "settlements", consumers united in condominium associations or in HCCs find
themselves in a less favourable tariff category than consumers who do not create such
associations.
It is important to note that the described division of consumers and their category called
"settlement" are not stipulated in the Law of Ukraine "On Housing and Communal Services", nor
in the Law of Ukraine "On Electric Power". I.e., the abovementioned NERC regulations in this
part do not meet the higher level legislative acts.
Respectively, we may conclude, that relationship of electric energy suppliers with the collective
customer – condominium – are not well not defined.
4.2.2
Agreements between Customers and “Producers/Providers” of Housing and
Communal Services.
The decisions on institutional arrangements and contractual relations in housing and communal
sphere are heavily influenced by the local self-government bodies and by owners of residential
buildings, who define and select the so called “providers” of housing and communal services in
the multi apartment buildings50 including building management, maintenance and repairs, as well
as all utilities (district heating, cold and hot water and sewage). Review of the legal basis for this
process has at least three issues that confuse the process and will eventually need to be
improved in the legislation. They are:
Definition of Provider: The “provider” of services of district heating, cold and hot water supply,
and sewage can be a “producer” of such services, provider of management services or other
economic entity. An option to choose a producer as a provider is confusing and needs to be
addressed by the legislation. Specifically, it is necessary to differentiate between producer of
services, transportation services and supply of goods and communal services. These categories
are defined as entities that are subject to licensing required by the Law of Ukraine «On National
47
CMU Resolution on Approval of the Model Contract on Provision of Management Services for Buildings, Constructions,
Residential Complexes or Complexes of Buildings and Constructions No. 484 of 20.05.2009
48
See Chapter 33 of the Commercial Code of Ukraine, CMU Resolution on Approval of the General Conditions
for Conclusion and Implementation of Capital Construction Contracts No. 668 of 01.08.2005, Order of the
Ministry for Construction, Architecture, and Utilities of Ukraine on Approval of a Model Capital Construction
Contract No. 3 of 27 October 2005.
49
Not envisaged by law as a special type of contracts, See Chapter 61 “Contracts” of the Civil Code of Ukraine
50
Order #60 of 25.04.2005
63
commission for regulating communal services market» and laws «On heat supply», «On Drinking
water and drinking water supply». It appears that current legislation does not differentiate
between the “producer of service” and the “licensed company”.
Domestic Hot Water Supply: The responsibility for domestic hot water supply (DHW) is unclear
and is not mentioned neither in the law «On Heat Supply» (as a product for purchase and sale),
nor in the law «On National commission for regulating communal services market». Production
of DHW was also omitted from the sphere of regulation by the national regulator. Consequently,
the licensed heat supply company who is a natural supplier of the DHW was named a “producer
of hot water supply service”. When considering the widely applied options of DHW production in
central substations or in individual substations in buildings, the situation in determining the tariff
becomes confusing and will need to be addressed. DHW provided by district heating is
physically and integral part of heat supply system, and as such it needs to be regulated in
monopoly arrangement and the tariff must reflect the way the DHW is being prepared. Currently,
tariff for heat transportation is not differentiated for customers who are getting DHW from central
or individual substations and thus, customers with individual substations pay for costs of heat,
which includes costs of DHW prepared in central substations.
Number of categories: The existence of numerous definitions of providers, producers,
licensees, and artificially created differences in areas of activities of these entities are very
confusing and counterproductive. There is no clear division of responsibilities between them and
the respective tariff policies are not well defined ad it is not clear whether tariffs charged by the
various entities for goods and services should, or should not be different for consumers .
In practical terms, one could assume that tariff for resources to the boundary of the building
should be different from the tariff for the service that is provided to the apartment by at least the
sum of costs required to ensure billing and collection to the end consumer in the apartment.
Since current boundary of responsibility for licensed companies (which supply goods) and
service providers (providing services) does not exists, there is no difference between the
wholesale and the retail tariffs. It is the simple reality that customers do not understand and do
not care about the differences between goods and services, providers and producers of services.
4.2.3
Role of Local Self-Government
Over the past many years, the decisions on providers of heating, hot and cold water and sewage
services for multi-apartment buildings were made in large part by the local self-government
bodies. This was mostly due to the fact that during the initial years of “relations development” in
housing and communal sphere, the maintenance companies (ZHEks) were in the role of
“intermediary” between the utilities and the end consumers. However, because ZHEKs did not
have sufficient financial resources to perform these functions, they mostly defaulted with
payments to utilities for the resources provided and used by the respective buildings and
accumulated substantial debts which were then transferred into a “bad debts” (non-recoverable
debts) category. In an attempt to solve this problem, the local self-governments allowed utilities
to conclude direct contracts with the end consumers in the multi-apartment buildings. This
system of vertically integrated monopoly is now used in majority of Ukrainian localities (with
exception of some large cities such as Kyiv, Kharkiv and Lviv) and it is applied to supply of heat,
water and sewage services. Each such monopoly took a function of customer billing and
collection to the end consumer in the apartment, which consequently increased the cost of
administering such system for the end consumer. This system is also riddled with many
problems, such as deficiencies in metering, cost allocations for apartments, metering equipment
maintenance and calibration.
64
To make matter worse, local self-government bodies, having no understanding of the complex
system of ownership in the multi apartment buildings, including a form of organizing owners of
apartments in condominium, began defining condominiums as “providers of services” in their
respective buildings. According to their understanding, condominiums are not really
acknowledged as collective customer. Besides, the local press refers to condominiums as an
“alternative to ZHEKs”. One significant reason for such misunderstanding is absence of clear
requirements and guidance for condominiums in organizing billing and collection.
4.2.4
Issus to be Addressed
Among the most critical issues to be addressed in the area of institutional structure are related to
the large number of involved entities, and the decision process of implementing capital repairs of
residential buildings. With the large number of various participants and absence of their division
of responsibilities, the institutional arrangements in housing and communal services is
complicated, not always clear and thus inefficient. In addition, the situation is exaggerated by
limited financial resources. On the issue of capital repairs, it is almost inconceivable that in the
whole institutional structure of relations in the residential market, there is not a single entity
that would be responsible for making decisions on carrying out capital repairs of the
residential building (including energy efficiency measures) in buildings without condominium.
ZHEKs perform implementation function only in cases there the funding is available from the
state or from local budget.
Details of the typical contracts that are used in housing and communal sphere are described in
Annex 47 to this report.
4.3
PRICE SETTING IN HOUSING AND COMMUNAL SPHERE
Price setting in housing and communal sphere is performed according to the principles defined
by applicable laws. Practically all prices in housing and communal sphere are subject to state
regulation. There are two exceptions from this rule - the price of management service and the
cost of capital repairs are defined by negotiation and fixed by respective contracts.
Price setting system significantly affect efficiency of housing and communal market functioning.
Since absolute majority of types of activity in this sphere and their respective tariffs are subject
to state regulation, we need to analyses the system of regulation in greater detail.
Currently, price setting functions in housing and communal sphere are divided between NERC
and local self-governments. NERC sets prices to its licensees, which are defined according to
the criteria that are specified in terms and conditions for carrying out licensed activity (as
referenced above in section 4.1). Allocation of responsibility for tariff setting is shown in
Exhibit 29.
65
Exhibit 29. Responsibilities for tariff setting in housing and communal sphere
National commission for regulation
CS market (currently NERC)





Tariffs for production of heat energy
(HE) (installed boilers’ capacity over
20 GCal/h);
Tariffs for transportation of HE
(unclear criteria);
Centralised water supply and
sewerage services (towns with over
100,000 citizens; services in more
than one oblast, or companies with
foreign investments);
Retail prices for household natural
gas; and
Household electricity tariffs
Local self government bodies






Tariffs for production of heat energy
(HE) (installed boilers’ capacity
below 20 GCal/h);
Tariffs for transportation of HE
(unclear criteria);
Centralised water supply and
sewerage services (all other);
Tariffs for centralised heating, hot
and cold water supply, and
sewerage collection service for
service providers;
Garbage collection tariffs
Tariffs on maintenance services for
buildings, constructions, and
adjacent territories
As shown in Exhibit 29, division of responsibilities for tariff setting can hardly be called efficient.
It is actually, a system of regulatory “power redundancy”, which in fact imposes on utilities two
regulatory bodies– national and local.
Tariff setting methodologies and responsibilities for their drafting are set by the legislation.
Pursuant to the law «On housing and communal services» Cabinet of ministers of Ukraine
drafts tariff setting orders for all types of housing and communal services except for those
which should be drafted by the national regulator for its licensees.
Exhibit 30 summarizes legislation, which sets requirements for tariff setting for services, goods
and supplies.
Exhibit 30 – Legislation on Pricing of Goods and Services in Housing Market
Service
Electric Power
Supply
Law
On Electric Energy
CMU Resolution No. 1548 on Establishing Powers of
Executive Authorities and Executive Bodies of Local Councils
on Price/Tariff Regulation of 25 December 1996 sets the
powers of the National Electric Power Regulation Commission
(NKRE) which regulates tariffs for the electric power supplied
to households for everyday needs, etc.
Tariffs for electric and heat power produced by heat plants,
heat and power plants, nuclear plants, and nontraditional/renewal energy plants/ NKRE Resolution No.896 on
Approval of the Procedure for Calculation of Tariffs for Electric
and Heat Power Produced by Heat Plants, Heat and Power
Plants, Nuclear Plants, and Non-Traditional/Renewal Energy
Plants of 12.10.2005
1
2
Regulatory Act
Gas Supply
On Natural Gas
CMU Resolution No. 1548 on Establishing Powers of
66
Service
Law
Market Functioning
Principles
Regulatory Act
Executive Authorities and Executive Bodies of Local Councils
on Price/Tariff Regulation of 25 December 1996 sets the
powers of the National Electric Power Regulation Commission
(NKRE) which establishes retail prices for household natural
gas.
The prices for liquefied gas supplied from grouped reservoir
facilities are regulated/ established by the Council of Ministers
of the Crimean Autonomous Republic, oblast, Kyiv and
Sevastopol City State Administrations.
Water Supply
and Sewerage
(for NERC
licensees)
On National
Commission for
Regulation of CS
Market (currently
NERC)
NKRE Resolution No.243 on Approval of the Procedure for
Formation of District Water Supply and Sewerage Tariffs of
17.02.2011
4
Heat Energy
Production,
Transportation,
Supply (for
NERC
licensees)
On National
Commission for
Regulation of CS
Market (currently
NERC)
NKRE Resolution No.242 on Approval of the Procedure for
Formation of Tariffs for Heat Energy, Its Production,
Transportation and Supply of 17.02.2011 (for consumers
using more than 20 Gcal/h)
On Housing and
Communal services
5
Centralised
Heating and Hot
Tap Water
Services
CMU Resolution No. 955 on Approval of the Procedure for
Formation of Tariffs for Heat Energy Production,
Transportation, and Supply and Centralised Heating and Hot
Tap Water Supply Services of 10 July 2006
On Housing and
Communal services
6
Centralised
Water Supply
and wastewater
collection
services
Formation of District Water Supply and Sewerage Tariffs of 12
July 2006
On Housing and
Communal services
6
Maintenance of
Buildings,
Constructions,
and Adjacent
Territories
Formation of Tariffs for Maintenance of Buildings and Adjacent
Territories and the Model Contract on Provision of Services for
Maintenance of Buildings and Adjacent Territories of
20.05.2009
Garbage
Collection
On Waste
7
Formation of Municipal Waste Removal Tariffs of 26.07.2006
On City
Development
Operations
8
Repair of
Buildings,
Constructions,
Replacement,
Reinforcement,
and
Reconstruction
of Constructions
and Networks,
The tariffs do not include capital repair expenses (including
energy efficiency measures). No requirements are set to
establish reserve funds for investments. Capital works are
financed only if there are state or local budget funds available.
In the buildings with condominiums the funds are raised
through targeted contributions made to solve specific
problems.
3
Order No. 174 of the State Constructions Committee on
Approval of the Construction Value Assessment Rules (State
67
Service
Law
Restoration of
the Bearing
Capacity of the
Bearing
Construction
Elements
Management
Services
9
4.4
Regulatory Act
Construction Rules D.1.1-1-2000) of 27.08.2000 is obligatory
for assessment of the value of constructions (facilities) built
with the use of public funds or funds provided by state
companies, institutions, and organisations.
On Housing and
Communal services
CMU Resolution No.484 on Approval of the Model Contract on
Management Services for Buildings, Construction, Residential
Complexes or Buildings and Construction Complexes of
20.05.2009
PAST ARRANGEMENTS USED FOR CONTRACTING AND FINANCING OF BUILDING
RECONSTRUCTION IN UKRAINIAN MUNICIPALITIES
In Ukraine, as in other countries, more than 40% of primary energy resources are consumed in
buildings of non-production sphere, such as in residential houses, schools, hospitals etc. This is
the most energy consuming sector in national economies. Recent on-going and unsuccessful
processes of reforming the municipal and housing sphere in Ukraine are to the large extent
connected with inefficient use of energy in buildings. Missing integrated approach to problems in
energy utilization, low quality of building construction, poor maintenance of buildings and low
energy prices resulted in energy inefficient buildings. The main problem is high energy intensity
of heating systems in buildings and low quality of the building envelope. Apart from heat losses
in the buildings through building envelopes, huge amount of heating energy lost in external
networks through obsolete piping system and inefficient insulation. Improvement of energy
efficiency and energy saving is a strategic line of development of economy and social sphere of
Ukraine in the near future and for further perspective.
At the moment there are several housing energy efficiency programs in Ukraine being
implemented by international organizations that envisage housing rehabilitation. They are
described below.
4.4.1
Project "Sustainable Self-Maintenance of Multi-Family Buildings"
The project for energy efficiency renovation of residential buildings was designed to be
implemented in two cities: Nezhin and Berdychiv. It was implemented during the June 2005 –
May 2008 period and funded by Program of Social Reforms in Central and Eastern Europe
(MATRA) of the Dutch Ministry of Foreign Affairs. The project presumes creation of the
conditions where a separate entity “ESCO Centre”, will perform energy efficiency rehabilitation
works on a residential building through an organized financing. The investment into the building
rehabilitation will then be repaid by residents through savings reached due energy efficiency
measures. In more details the project description is provided below.
ESCO Centre becomes a provider of district heating and hot water supply services for all
residents in the building. Thereto, at the General Meeting, multi-family building co-owners
association (OSBB) appoints ESCO Centre as a provider of the above mentioned services and
concludes a corresponding agreement. To provide services to the customers ESCO Centre will
buy heating energy from the Utility Enterprise “Teplokomunenergo” and pays it for actual Gcal
based on the actual meter readings. The Customers will pay ESCO Centre for the provided
services according to the norms (the rate is determined for 1m2. of the heated area). ESCO
68
centre will perform energy efficiency rehabilitation works with the help of loan received from
DIGH through a local bank.
4.4.2
Housing Rehabilitation Project in Nizhyn.
DIGH issued a loan to “Central Energy Service Company “ESCO-Centre” LLC to finance an
energy efficiency and renovation project, including energy measurements in two residential
buildings with a total amount of apartments 294 in city of Nizhyn (Chernihiv oblast).
This initiative was implemented under a project of technical assistance called "Sustainable selfmanagement of apartment buildings" (June 2005 - May 2008), financed by the Program of social
transformation in Central and Eastern Europe (MATRA) of the Ministry of Foreign Affairs of the
Kingdom of the Netherlands.
At the general meeting of the CAs, a decision has been achieved on the works to be
implemented, and CEC “ESCO - Centre” has been chosen as the supplier of hot water and
district heating services. The decision of the CA determining the supplier of those services has
been agreed with the executive committee of Nizhyn City Council. This resulted in gaining by
CEC ”ESCO-Centre” a status of service provider, which allowed the company to sign contracts51
on providing hot water and district heating services with every apartment owner, and signing a
contract with the heat supplying organization on purchasing heat energy.
The agreement between the CAs and CEC “ESCO-Centre” states average annual level of heat
energy usage before the beginning of the implementation of the energy saving measures. The
savings of energy on heating and hot water supply is expected to be up to 50%. For the ESCO,
the difference between the stated level of energy usage (in the relations with CA) and the actual
level of energy usage after implementation of works (in the relations with heat supplying
organization) will be the source of loan repayment. The residents of the buildings that participate
in the project will have comfortable living conditions and gradually will be repaying ESCO for the
implementation of works through the monthly payments for the company’s services.
CEC “ESCO-Centre” applied to DIGH for financing with a complete business plan, and DIGH
agreed to be a partner in the implementation of this project. According to the accepted
conditions, the fund finances 75% of the project, 25% has to be financed from other sources. In
this example the funds of the city budget, the state budget and of the apartment owners have
served as other sources of financing.52
Terms of the loan provided by DIGH to ESCO Centre:
 Total amount of the loan - 508,321 Euro, including commission of DIGH - 21 820 Euro
and an additional fee for information processing, 5000 Euro.
 Term of the loan - 10 years. Repayment date - 26.02.2019.
 Grace period - none. Preterm repayment possible.
 Interest rate - 6.03%.
 Payment of interest and repayment of the loan - once per year.
 The loan is secured with chose in possession of payment liabilities.
51
A standard contract on providing services of district heating, water supply, hot water supply drainage, approved by the
Decree No.630 of Cabinet of Ministers of Ukraine on July 21, 2005.
52
At the time of writing this material one of the buildings has not received financing from the state budget. This did not allow
the usage of the loan in the full amount. The beginning of works on this building has been financed from CEC”ESCOCenter” own funds.
69
 Lending from DIGH to ESCO Centre was carried out according to general procedures
established by the laws of Ukraine and according to regulations of National Bank of
Ukraine.
4.4.3
Housing Rehabilitation Project in Berdychiv.
In Berdychive there were 3 residential buildings selected for the project implementation. The cost
of rehabilitation measures is presented in Annex 41. The presented investment costs were
calculated in accordance to recommendations of State research and project institute
“Ndiproektrekonstruktsija” (Zhytomir branch). Project financing plan is given in the following
Annex 42.
As of today DIGH provided funding for the project implementation to ESCO Centre company,
however the residents in the building s selected refused to participate in the project and to take
the responsibility for the investment. This project failure was especially because of inactivity of
the local municipality in supporting the project initiative.
At the moment ESCO and DIGH are to make decision on where to implement the project. One of
the options is the city of Ivano-Frankivsk, where local government and the residents are willing to
participate in the project.
4.4.4
Housing Rehabilitation Project in the City of Lutsk (2010).
Lutsk city administration have learnt the experience of MATRA projects in Nizhyn and Berdychiv
with the use of ESCO scheme for energy efficiency renovation of residential buildings developed
for MATRA Project. For the project in Lutsk a 9 story residential building was selected. The total
building area is 9 412 square meters. The energy efficiency rehabilitation cost of the building was
calculated as shown in Annex 43.
It was estimated that the payback period for this project will be 14.6 years at the prices for
energy resources as of the end of 2010. At the same time due to the expected price increases in
the cost of heating energy, electrical energy and water the payback period of the project can be
cut to 5-7 years.
The project was implemented in 2010 by ESCO Ukraine a contractor specializing in energy
audits and energy rehabilitation projects. The financing of the project was obtained from private
investors through a Management Company. The Management Company has concluded
agreement with the Multifamily Building Co-owners association (OSBB) for provision of energy
resources for the period of 10 years. At the same time the agreements with energy providers
have not been signed yet with the energy producers. As the heat energy producer are not
interested in cooperating in this kind of projects that hit their monopoly status and bring clarity to
tariff setting and optimization of energy costs
4.4.5
Housing Rehabilitation Project in the City of Chernivtsi (2004-2010).
The City council of Chernivtsi has implemented several projects for energy efficiency of housing
buildings in the city. As part of those projects city administration has organized renovation works
on many buildings. That way there were works performed on roof reconstruction and thermal
insulation in 136 buildings, thermal insulations of walls was performed on 2 residential buildings
in the city as part of the city program for reconstruction of housing and . The overall cost of the
project was UAH 2,463,720, and it was financed from the following sources:
 State budget - UAH 1 601 420 (65%),
 City budget - UAH 492 750 (20%),
 Residents of the buildings - UAH 369,55 (15%).
As part of further development of energy efficiency projects in the city, the city administration
together with the Ministry of Housing and Municipal Economy have developed a pilot project of
complex thermo rehabilitation of one of the residential buildings in Chernivtsi.
70
The total cost of this project is UAH 8 386 984, the city budget will provide financing in the
amount of UAH 3 453 464. As in other projects residents are supposed to cover 15% of the
project cost and the rest to be covered by the state budget.
4.4.6
Projects Implemented by GTZ (German Technical Assistance Organization)
GTZ is developing energy efficiency renovation program for municipal and residential buildings in
Ivano Frankivsk, Myrhorod and Novograd Volynsky. At this stage the works performed include
energy audits on all buildings, calculations for energy efficiency parameters and the cost of
renovation for several buildings. The investments range from € 400,000 to € 1.2 million, with
contribution from the residents (10%-15%), state budget (30%-40%), municipal budget (20%)
and from other sources, such as donor’s funds
4.5
SUMMARY
The assessment of the current institutional arrangements of the residential sector in the
Ukraine, including issues related to the residential buildings (ownership, management,
utilization) and to the infrastructure to the building boundary (production, transportation and
supply of water, heat, gas, electricity, sewage) showed several deficiencies and issues that
need to be improved to mitigate the current deficiencies in residential sector operation. The
summary of the many problems is as follows:
 Large number of participants defined by legislation and operating in the residential
sector, including condominiums (Associations of condominiums), managers of
housing, utilities (heat, gas, electricity, water, sewage), lift operators, garbage
collection companies, local self-government bodies, “balance holding” organizations
and private investors etc. Each of these participants is focused on its own operation,
without a comprehensive approach that would benefit the consumer.
 Absence of clear division of responsibilities between the residential market
participants. Lack of clear definition of responsibilities and area of operation for the
participants creates mayhem in decision making, supply of services and goods to the
residential customers and cause inefficiency in operation and in resources utilization.
 Absence of entity responsible/authorized for making decisions on capital investment
and repairs of the housing stock (including energy efficiency measures) in the
buildings where condominiums are not established.
 Absence of Clear definition of jurisdiction of the National Regulator and local selfgovernment needed to eliminate redundancy of the regulation for the utilities
 Payments and tariff setting practices are not meeting all market needs and need to
be reconsidered and much improved by:
 Introduction of requirement to contribute regularly to the building capital repair
fund and other needed building improvements,
 Tariff for transportation of heat energy needs to consider the location and
associated cost of DHW produced in central or individual substation,
 Introduction of tariffs for renewable energy.
4.6
RECOMMENDATIONS
The undesirable situation in the residential sector housing and communal services will require
a comprehensive solution that will effectively address the maintenance and management of
residential buildings and supply of services to the building. The very first step in implementing
such a comprehensive solution is developing a model for well-functioning residential housing
and communal services market, define all its criteria, requirements and all gaps as compared
71
with the current situation. Once the model and all requirements are well understood, the
results and all gained information and knowledge will be applied to amendment of the
legislation and regulations.
Consultant suggests for consideration two models of the residential housing and communal
services market. Both models are based on choice by the consumer of the communal
services supply method. It needs to be stressed that the propose models also consider the
current situation and assumes short term realistic steps.
Model No 1 – Provides a solution for improving relations between the end consumer and
suppliers of housing and communal services in buildings without organized condominium.
Model No 1 has two options – labelled “1 А” and “1 B”.
Option 1А: An individual consumer in the apartment is party to contractual relations. This
consumer receives all services (resources) directly from the suppliers:
 Gas supply
 Electric energy supply
 Heat supply (including heat for heating and hot water supply)
 Water supply and wastewater service
 Maintenance of the building
Option 1B: A management company, selected by the local self-government body through
open tender, concludes contracts with the suppliers of resources (except for gas and
electricity supplied directly to the end consumers) and ensures billing and collection to the
individual consumers in apartments. Billing and collection of payments from individual
apartment owners will be part of the Manager’s responsibilities that will also include metering,
ensuring comfort in premises and quality of resources in apartments, organization of energy
efficiency measures (upon owners’ decision). Schematically both options are shown in Exhibit
31 .
72
Exhibit 31. Model 1 – End user “apartment” or a building without condominium.
Regulated monopoly on both sided both in housing and infrastructural segments)
Abbreviations Used in Exhibit 31:
Ap. 1, 2 =
apartment 1, 2
MC =
Management Company
1 var =
model 1 A
2 var =
LSC =
CHS =
model 1B
local self government body
central heating substation
Obviously, both options have their pros and cons, which are summaries in the Exhibit 32
below.
Exhibit 32. Pros and cons of Model 1
Option 1А: Individual consumer in the
apartment is a party of contractual
relations.
Option 1B: Management company, selected
by local self government body through open
tender concludes contracts with the suppliers
of resources (except for gas, electric energy,
which are supplied directly to the end
consumers) and ensures billing and collection
to the individual consumers in apartments
Pros:
 This model has been used in many cities
today making this type of relations clear.
Pros:
 A management body is established for the
buildings without condominiums;
 Establishment of prerequisites for development
of the residential management market and
energy efficiency in the residential area;
 Cost-effective arrangement of the sale of
resources in a building (not each resource
separately, but all together).
Cons:
 Vertically integrated monopoly (water,
heat) requiring state regulation;
 Overlapping of sale functions and
Cons:
 It is local self-government that choose the
managing company and not the owners;
 Lack of “new type” managers (not ZHEks);
73
consequently duplication of expenses
incurred by monopolists and the building
maintenance company;
 The rules for calculation of maintenance
tariffs should be established by the state;
 Energy efficiency investments can be
made either by (1) the heat supply
monopolist, but heat tariff should be
different for each building (which
increases the administrative costs);ord (2)
the maintenance company, but the tariff
should envisage an investment
component separately for each building;
and
 The owners’ rights to make decisions on
investments should be established;
enforcement of obligations of individual
owners on joint obligations for investment
should be developed.
 The rules for calculation of maintenance tariffs
should be established by the state;
 Energy efficiency investments can be arranged
by the managing company, but the issue of
owners’ quorum for voting on investments
needs to be solved, and enforcement of
obligations of individual owners on joint
obligations for investment should be
developed..
Considering the current situation in residential sector, the most practical option for
implementation under the Model 1 seems to be the variant 1B. It is envisioned that this Model
would be applied in parallel with the Model 2 in buildings where it would not be possible to
establish condominium.
Model No 2 – Provides solution for improving relations between consumers and suppliers of
housing and communal services in buildings with established condominium. Model No 2 has
also two options labelled “2А” and “2B”.
Option 2А: Condominium manages the building through its management body as defined by
the charter, and as legal entity acts in the contractual relations with the suppliers of
communal services (excluding gas and electricity which are supplied directly to the end
consumers) and organizes billing to the apartment level.
Option 2B: Management company, selected by the condominium concludes contracts with
the suppliers of resources (excluding gas and electricity energy which are to be supplied
directly to the end consumers), ensures their billing and collection to the end consumers in
the building, where condominium is established.
Schematically both options are shown Exhibit 33.
74
Exhibit 33. Model 2 – End user building with condominium.
Market (in housing segment and in future- production of heat energy) and regulated natural
monopoly (production, transportation, supply of water and transportation of heat energy
Abbreviations for Exhibit 32:
CA =
condominium
MC =
Management Company
1 var =
model 2 A
CHS =
central heating substation
2 var =
st
1 stage
2 nd
stage
model 2B
tariff for heat supply is regulated and
includes tariff for production and
transportation
– customers will be able to choose
producers of heat
Both options have their pros and cons, which are summarized in the Exhibit 34 below.
However, both options are acceptable in case that certain improvements in legislation are
made.
75
Exhibit 34: Pros and cons of Model 2
2.А: Condominium manages the building
through its management body as defined
by the charter, which becomes an entity of
the contractual relations with the suppliers
of communal resources (except for gas
and electric energy which are to be
supplied directly to the end consumers)
and organized billing to the apartment
level
Pros:
 This model has been used in many
cities today making this type of
relations clear;
 Cost-effective arrangement of the sale
of resources in a building (not each
resource separately, but all together).
2.B. Management company, which
condominium selects, concludes contracts with
the suppliers of resources (except for gas and
electric energy which are to be supplied directly
to the end consumers) ensures their billing and
collection to the end consumers in the building,
where condominium is established
Cons:
 Insufficient number of condominiums
 Responsibility of condominiums for
arranging delivery of communal
resources and maintenance of the
building should be defined by a law,
which is non-existent today;
 Existence of legal barriers for the
energy efficiency funding
(establishment of reserve funds, taking
of loans, debt collection mechanisms),
which need to be removed.
Cons:
 Insufficient number of condominiums and
managing companies;
 Existence of legal barriers for the energy
efficiency funding (establishment of reserve
funds, taking of loans, debt collection
mechanisms), which need to be removed.
Pros:
 Establishment of prerequisites for
development of the residential management
market and energy efficiency in residential
buildings;
 Cost-effective arrangement of the sale of
resources in a building (not each resource
separately, but all together).
Subject to selection and acceptance of a specific model by the Ministry of regional
development, construction and housing and communal economy, it will be necessary to
develop a comprehensive implementation plan that will include plan for amending legislation
and drafting/amending regulatory documents:
 Define and outline changes in the relevant laws, including defining potentially
competitive segments of the market; removing definitions of producer/provider of
services and balance sheet holder; introducing DHW as a product supplied to the
building without individual DHW substations. Introduce amendments to Laws of
Ukraine “On Housing and communal services”, “On heat supply”, “On national
commission for regulating communal services market”
 Define a system of contracts reflecting the changes in legislation (including defining
division of responsibility of the parties, metering of resources, access to the networks,
disconnection. Introduce the amendments to Law of Ukraine “On housing and
communal services”, Cabinet of Ministries Decrees;
 Improve regulation of utilities (methods, methodologies). Introduce amendments to
regulatory documents of NERC, Cabinet of Ministries Decrees
 Remove legal obstacles for attracting financing for capital repairs (including energy
efficiency) in residential buildings (mechanisms for decision making in the buildings
without condominiums; establishing of the reserve funds; borrowing; rules for
76
enforcing collection from individual apartments). Introduce amendments to Civil Code
of Ukraine, Law of Ukraine “On Condominiums”.
In order to improve the system of state regulation of natural monopolists within their market
and to support development of a competition in the housing and communal services sphere, it
is necessary to:
 Define structure and composition of costs that can be recovered in tariffs in each step
of the delivery (production, transportation, supply)
 Improve methodologies for tariff structure for water supply, sewage, heating, and hot
water supply by allowing price cap with automatic indexing for costs of individual
resources. In parallel, implement a system of benchmarking by the national regulator
– or monitoring activity indicators of the licensees with the aim of setting efficiency
targets, which will have to be accounted in the X factor in the price cap tariff setting
formula
 Define market segments and prices not subject to regulation
 Introduce mandatory regular contributions by the building co-owners to the capital
repair fund maintained by the entity responsible for building management
77
78
5.
FINANCING ARRAGEMENTS FOR ENERGY EFFICICIENCY IN
RESIDENTIAL SECTOR
This section provides information on commercial structures and availability of funding for
management and financing of energy efficiency investments for the residential buildings, and
describes experience with budgetary and donor funding for residential energy efficiency. It also
provides insight into the willingness and capacity of residents to fund investment needs obtained
through conducting resident’s focus groups.
5.1
RESIDENTIAL SECTOR MARKET PARTICIPANTS
5.1.1
Contractors - ESCO and Construction Companies
The Ukraine has a small number of energy servicing companies, with the largest and bestknown being CJSC "UkrESCO" (Kyiv), "ESCO-Rivne" (Rivne), "ESCO-North" (Kharkiv), ESCO
"EcoSys" (Zaporizhya), CEC "ESCO-Centre" (Kyiv), "ESCO-East" (Zaporizhya), CE "Communal
Energy Service Company of Kherson", ESCO "EnergoEngineering" (Dnipropetrovsk), LLC
"Energoconsult" - ESCO (Kyiv), LLC ESCO "Systemotechnika" (Odesa). Currently, the CJSC
"UkrESCO", LLC, CEC "ESCO-Centre", LLC and the Energy Service Company "Lutsk
Communal Systems" appear to be the only Ukrainian energy service companies that use the
funding mechanism based on the shared energy saving subcontract.
The ESCO market started to develop in late 1990’s where some companies attempted to apply
integrated approach to energy conservation in various industries. However, low energy cost did
not provide sufficient incentive for enterprises to introduce energy conservation measures and
almost all ESCOs had to change their profile and switch to other activities such as marketing
and sale of energy-efficient equipment, operation of heating systems, or providing services in the
municipal sector. Recently, the list of ESCO's activities in the Ukraine has been supplemented
with energy consulting, energy auditing, drafting energy conservation programs in regions,
drafting perspective plans for development of public utilities, project management, integrated
environmental support of enterprises, electricity supply under unregulated tariffs, etc.
Lack of clear understanding of the essence and opportunities of energy performance contracts
by management of local self-governments bodies (LSGB) and housing and communal economy
companies hinders development of the market of ESCO. Another hindrance is lack of
experience in energy conservation, monitoring and verification of energy conservation by
potential contractors. Also, potential customers are lacking experience and are unable to
negotiate such contractual arrangements with potential contractors, thus having no confidence in
ESCOs services.
A charter of an NGO "Energy Alliance" (EA) (http://www.ea.org.ua/) that operates in the Ukraine
is to bring together energy service companies and to promote their activities. The latest projects
supported EA includes collaboration with Dnipropetrovsk Regional NGO "Unified Independent
Coordination Centre for Management of the Housing Sector, Condominium Associations and
HCC Reforms", The objective this project is reforming the housing and communal economy
through condominiums. In particular, this collaboration aims at accelerating the process of
reforming the housing and communal economy and support installing meters, support capital
and current repairs of buildings using new technologies, and general fundraising. Another
example of ESCO support is the "EcoSys" (Zaporizhya), that operated the the information
project portal "Energy-Efficiency World" (http://www.esco.co.ua)
79
According to the first issue of the electronic journal "Environmental Systems"53, issued in 2011 in
Ukrainian energy-efficiency market successfully operate a lot of companies and associations in
addition to those described above: "Arena-Eco", "Energy Alliance", CJSC "Thermo",
"International Centre of Energy Efficiency Technologies" (SE ICEET), "Uralinvestenergo",
"Service-Invest", OJSC "Donetskgormash", CJSC "VOZ-O", "VZLET-PREMIER", LLC EnergyConservation Technologies, ESCO-Resource, ESCO-Zaporizhya, LLC "Komunenergo", "NIPORubicon", NTE JSC "UKRPROMENERGO, CJSC "UkrNIIElektroterm", PE "Satori", LLC
"Leader-Service", SE "Agroforce", "IMEPOWER", "INTEK", consulting laboratory "THERMA",
LLC "Intersectoral Enterprise Energotehprom", "Demo LTD", Nokian Capacitors Ltd, etc. The list
of some ESCOs and information on the Internet are offered in Exhibit 35:
Exhibit 35: List of ESCOs in Ukraine
WEB
http://www.esco-rivne.com/
http://www.esco-center.com.ua/
http://www.ukresco.com/
http://ecosys.com.ua/
http://energoconsalt.com
http://www.esco-st.com.ua
5.1.2
Company
JSC ESCO-Rivne
ESCO-Centre.
JSC UkrESCO
ESCO EcoSys.
Energoconsult – ESCO
LLC ESCO "Systemtechnika"
Banks
Based on data of the National Bank of Ukraine54, in 2010, 175 banks had the license of the
National Bank of Ukraine for performance of banking transactions. The equity capital of the
banks amounted to 136.8 billion UAH or 14.5% of liabilities of the banks. Banks' liabilities totalled
to 807.8 billion UAH. The key components of liabilities: - individuals' funds – 262.6 billion UAH or
32.5% of liabilities; - term deposits of other banks and loans received from other banks – 173.1
billion UAH or 21.4%; - funds of economic entities – 140.3 billion UAH or 17.4%. The banks have
the following structure of population's deposits in terms of maturity: term deposits amount to
200.4 billion UAH or 76.3% of the total amount of deposits from population, while deposits on
demand – 62.3 billion UAH or 23.7%.
In the Ukraine, the Association of Ukrainian Banks operates55 as a non-profit organization of
commercial banks operating in the Ukraine, representing their systemic interests in relations with
the National Bank, the Parliament, the Presidential Administration, the Cabinet, the State Tax
Administration, the Supreme Court of Ukraine and other state and private agencies and
organizations. The intention of AUB is to promote Ukraine's banking system. Members of the
AUB are 120 out of 175 commercial banks operating in the Ukraine. Performance indicators of
banks in the Ukraine in 2010 are provided in Annex 44
The share of the loans to individuals by the twenty (20) largest banks listed in Exhibit 36
represents more than 20% of their total loan portfolio. The leading banks with largest share of
small loans are Ukrsotsbank (57%), Nadra (75%), Forum (40%), Swedbank (68%), Delta (46%),
and Ukrgazbank (33%).
Exhibit 36: Selected performance indicators of largest 20 banks in Ukraine
No
Bank
Loan and
Share
53
http://esco-ecosys.narod.ru/2011_1/art067.htm
54
http://bank.gov.ua/Publication/bank_sup/Results/2010/01122010.htm
http://aub.org.ua/
55
Incl.
Share of loans
80
Investment
Portfolio
(%)
Loans for legal
entities
Loans for
individuals
for individuals
in the LIP (%)
TOTAL
613285.1
100
476181.4
144121.5
1
PRIVATBANK
93189.87
15.195
79558.32
19046.33
20
2
UKREXIMBANK
53630.81
8.745
48881.91
1095.03
2
3
OSCHADBANK
49234.79
8.028
39034.64
4614.52
9
4
UKRSOTSBANK*
30799.11
5.022
16212.76
17496.9
57
5
PROMINVESTBANK*
26872.16
4.382
23948.54
1192.72
4
6
VTB BANK
26774.67
4.366
25817.96
2715.89
10
7
OTP BANK
21093.38
3.439
11591.53
9399.54
45
8
ALFA BANK
18575.75
3.029
16560.12
4306.14
23
9
FINANSY I KREDIT
17158.58
2.798
13550.62
3815.62
22
10
NADRA
16685.74
2.721
8568.87
12547.63
75
11
PUMB
12672.58
2.066
9763.36
3111.54
25
12
BROKBUSINESSBANK
11092.38
1.809
8364.82
2382.99
21
13
CREDITPROMBANK*
10784.91
1.759
7486
2525.59
23
14
FORUM
9692.43
1.58
8900.71
3889.05
40
15
PIVDENNY*
8246.29
1.345
7458.22
885.24
11
16
SVEDBANK
7958.36
1.298
8167.25
5427.42
68
17
SBERBANK ROSSII
7900.08
1.288
7397.06
1221.49
15
18
DELTA
7607.46
1.24
6732.24
3468.59
46
19
ING BANK UKRAINE
7599.73
1.239
6412.82
97.9
1
20
UKRGAZBANK
7579.05
1.236
5881.01
2517.64
33
Source: prepared by MDI based on materials of http://aub.org.ua/
Million UAH, 1st January 2011
As a result of interviews conducted with representatives of FORUM, Alfa-Bank, Raiffeisen Bank
Aval, Ukrsibbank, it was noted that after the financial crisis of 2008 lending activity for individuals
and small and medium enterprises was suspended by most of the abovementioned banks.
Revival of this activity started only in early 2011. Detailed summary of the interviews with the
banks is provided in the Annex 45
Currently, none of the abovementioned banks had in their credit portfolio, lending products for
investments into energy efficiency of residential houses. Nevertheless, the banks have
expressed their interest in providing funding for residents for houses' energy efficiency
improvement measures.
In terms of lending to individuals for energy efficiency investments, virtually all the banks that
were interviewed have loan products for the purpose of repairs or equipment procurement. The
main condition of such loans is real estate collateral (housing, etc.). Interest rates for such loans
range from 15.6% to 29% per annum, with maturity term of 7-15 years. Practically all banks offer
lending to individuals for investments in the individual residential houses without differentiating of
the purpose of lending – for general repairs or for energy efficiency measures.
For business entities involved in sale of equipment and materials, some banks offer conditions of
lending for individuals-clients of such sellers under the pledge of this equipment. As for selling
materials (such as insulation materials, mixtures, etc.), some banks are willing to consider
lending conditions for individuals for each client-supplier of such materials. This loan allows
suppliers of equipment and materials to offer to their customers deferred payment for the period
of 3 years. Interest rates on such loans are at least 36% per annum.
81
Thus, none of the banks is ready to lend to condominium associations as to legal entities. This is
primarily due to the non-profit status of condominiums and lack of collateral for the loan. A
barrier for lending to condominiums under non-collateral conditions is the legal uncertainty of the
procedure of the condominiums' debt collection from its members and non-members. Lack of a
clear, step by step procedure for collecting debts deters banks in offering financial products for
condominiums as the borrower.
Representatives of banks expressed the following vision of the necessary steps on the part of
the government and legislators for development of the condominiums lending market:
 Stipulation in legislation of Ukraine of the procedure of debt collection by
condominium from their members under loan obligations;
 The state's definition (for example, by central executive authorities in housing and
communal economy and the construction sphere) of model energy efficiency projects
for various typical models of residential houses and the kit of construction, permit
documents needed to implement the proposed measures.
Specific features of the bank loans to the condominium associations are described in Annex 47.
5.1.3
Other Financial Institutions – Leasing Companies, Credit Unions
Ukraine has experience of implementing energy conservation projects in housing involving credit
unions for their implementation. Lviv region, in particular, has such experience, as described
above.
Unfortunately, the consultants do not known any examples of funding of energy efficiency
measures by leasing companies. However, leasing companies could potentially be providers of
funding for energy efficiency measures in housing. Representatives of Raiffeisen Bank Aval and
ALFA BANK expressed their desire to develop the direction of financial leasing for energy
efficiency needs in the housing sector.
5.1.4
Building Managers
Building management can be implemented by its owners, co-owners, or by the “balance sheet
holder”. Legislation sets no limits on such activity. Building management rules only require
compliance with these conditions in the management process:
 The person who manages the house shall open an account in a banking institution to
receive and to make payments for housing and utility services for each separate object
commissioned to his/her management.
 In order to accumulate funds for carrying out current and capital repair, the person
managing the building shall open separate savings accounts.
Therefore, management functions may be performed by any business entity of any legal form of
ownership and with the activity scope that includes residential buildings management. Today in
the Ukraine there are many housing maintenance enterprises that operate under the
management contracts. However, as of now the authors are not aware of any cases of executing
management contracts that can serve as a Model Agreement. As noted above, consumers
usually execute contract with the management company for providing maintenance services for
buildings, structures and adjacent territories.
As was mentioned in the press56, according to data of the Ministry of Housing, the number of
commercial companies in this market of residential buildings managers is shrinking, and with no
56
http://www.prostobiz.ua/layout/set/print/layout/set/print/biznes/biznes_start/stati/
v_2011_chastnye_zheki_stanut_vygodnym_biznesom_dlya_krupnyh_kompaniy
82
more than 500 companies operating today. This phenomena is very likely due to the set of strict
rules defining the management fees as the sum of money paid by the customer in addition to the
cost of other communal services, which in a building include:
 Centralized cold water supply and wastewater collection ;
 Centralized heating and hot water supply;
 Maintenance of buildings, structures and adjacent territories (individually or within the
service of SDW management);
 Electricity supply
 Natural gas
The cost of each of these services above may include the additional cost that must be
reimbursed via manager's fee. This system does not provide for clear distinction between the
costs communal services and the cost of management. This creates preconditions for slow
payments to the manager and thus in low interest for such activity from the side of managers.
Another obstacle for development of the building management market under the current Model
Agreement, is that management fees are not included into the list of services covered by
housing subsidies and privileges.
Interestingly, housing market participants also point out to the problems and barriers for the
housing management market entry57
 In the environment where a different tariff for utilities and communal services apply to
individuals and to legal entities, some adverse situations may be created by introducing a
building management entity. When tariffs for individual residents are lower then for
businesses, individual users pay the lower tariff, while the management entity must pay
to the supplier at the “business” tariff which is higher, thus ending losing money. In
another words, the housing maintenance company has to pay to the natural monopoly
more than it can charge from residents.
 The cost of entry into this market for a new stakeholder is relatively high. According to
some practitioners, the cost of getting into the business is approximately 50 thousand
Euro (500 thousand UAH). These funds must be used for renting premises, office
equipment, training of personnel and purchase of necessary equipment. The level of
investments for purchase of equipment depends on the scope of work to be performed in
a certain city.
 Currently, houses, buildings and adjacent territories maintenance services are defined
according to Resolution of the Cabinet of Ministers of Ukraine of 20.05.2009 No. 529, and
the fee for such services does not ensure compensation for operational costs, thus
housing maintenance companies cannot timely carry out all the scope of work planned
and ensure profitable activity.
Overhead associated with maintenance costs of a single house are quite high and virtually
prohibit a “single building operation”. Market participants estimate that in order to break even
and potentially make profit, it is necessary to manage a territory in a rage of 500 thousand m2 to
1.2 million m258 in a single city. Some experts claim that the profitability of this activity in 2010
was only 6%, so the ROI period is very long. For arrangement of organizational aspects of such
a market, one needs more than one calendar year.
57
http://www.prostobiz.ua/layout/set/print/layout/set/print/biznes/biznes_start/stati
/v_2011_chastnye_zheki_stanut_vygodnym_biznesom_dlya_krupnyh_kompaniy
58
http://www.prostobiz.ua/layout/set/print/layout/set/print/biznes/biznes_start/stati/
v_2011_chastnye_zheki_stanut_vygodnym_biznesom_dlya_krupnyh_kompaniy
83
5.1.5
Market of Energy Efficiency Equipment Suppliers
The number of economic entities involved in energy efficiency of residential buildings is rather
substantial. In the field of “thermo-modernization” of buildings, the major market participants and
the organizations that shape it are Henkel Bautechnik (Ukraine), Danfoss, Knauf Insulation
Ukraine, and ROCKWOOL Ukraine. These companies have a broad regional representation and
offer a wide range of products. The Ukrainian Association of "Foam Plastic Manufacturers", a
non-profit organization representing interests of the leading Ukrainian producers of foam
polyester (Styrofoam) insulation59. This association and the Industrial Marketing Agency are
implementing the social project TeploDoma (http://www.teplodoma.org). Within the project, it is
possible to obtain the list of companies in any region of Ukraine involved in insulation activity.
Analysing information materials of the abovementioned manufacturers regarding their activities
in Ukraine, we can conclude that all of them position themselves as active participants in the
thermo modernization market and actually develop this business through marketing tools. This
clearly demonstrates their interest in the energy conservation market in the Ukrainian housing
sector.
Information about businesses in the market of windows, doors and facade constructions
production is contained in the thematic catalogue "Facade-Info"60. All of them are potentially
interested in developing the energy efficiency market in the housing sector.
International manufacturers of energy conservation equipment and technologies are promoted in
the market of Ukraine by the trade missions of the countries that were described above.
Most of the abovementioned companies implement projects in individual housing construction.
The main obstacle for companies, suppliers of equipment and materials for energy conservation
in apartment buildings is lack of a collective customer for their services.
5.1.6
Market of Energy and Other Services Suppliers
The supply of energy, utilities and housing maintenance services are provided in the Ukraine by
enterprises in municipal or in private ownership. Their interest and capacity to support energy
efficiency by funding improvements through service fees directly depend on the possibility of
recovering the investment through tariffs. Summary of information on pricing procedures
provided in Exhibit 37 for supply of energy and other resources and provision of communal
services described above, it can be concluded that among businesses there is a general interest
to implement the following energy efficiency measures in residential buildings:
Exhibit 37: Summary of pricing procedure for investment recovery
No
59
60
Sphere of activity
1
Water-supply
2
3
Wastewater collection
Heat generation produced
Type of investments in the
residential building
Compensation source /
regulatory act
Purchase and installation of inbuilding water meters;
The tariff on centralized water supply and
sewage services / Resolution of the CMU
No 959, NERC Decree No. 243 of
02.17.2011 "On Approval of the Tariffs
Setting Procedure for Centralized Water
Supply and Wastewater collection " (not
enacted)
The tariff on electricity and heat produced
Installation
of
thermal
power
http://aspp.com.ua
http://fasadinfo.com
84
Type of investments in the
residential building
Compensation source /
regulatory act
at thermoelectric power
stations, nuclear power
plants
and
using
alternative or renewable
energy sources (for
business activity)
generation systems for residential
houses using alternative or
renewable energy sources
4
Thermal energy supply
Purchase and installation of inbuilding heat meters;
5
Providing CH and HWS
services
6
Providing maintenance
services for buildings,
structures and adjacent
territories
7
Electric power supply for
population
Gas supply for population
Purchase and installation of inbuilding heat and hot water meters.
Replacement, reconstruction of inbuilding CH and HWS networks
Installation, reconstruction,
modernization of ETIs
Installation, replacement,
reconstruction of water pumps
Investments in installation electrical
meters in public places, elevators,
installation of energy saving
equipment in the housing stock;
performance of energy saving
measures for the winter period,
investments in street lighting
facilities (cost limitation – 2500
UAH – this amount is the cost
criteria for attributing the tangible
asset of MNTA according to the
Tax Code of Ukraine for tax
purposes)
-
by CHPs, NPPs and using alternative or
renewable energy/NERC Decree "On
Approval of the Calculation of Tariffs on
Electric and Heat Energy Produced by
CHPs, NPPs and Using Alternative or
Renewable Energy Sources" No. 896 of
12.10.2005
Tariff for heat / Resolution of the CMU No.
959 (for entities under 20 Gcal/hour,
NERC Resolution of 17.02.2011 No. 242
"On Approval of Heat Tariffs, heat
generation, transportation and supply" (not
enacted) for entities above 20 Gcal / h
Tariff on CH and HWS services /
Resolution of the CMU No.959
No
8
Sphere of activity
-
Tariff maintenance services for buildings,
structures and adjacent territories /
Resolution of the CMU No.529
-
Subject to possibility of recovering investment through tariffs, enterprises should be interested in
investing in energy conservation. However, there are several reasons why companies are not
actually interested in implementing investments in energy efficiency in residential buildings and
in implementing energy consumption metering for accounting purposes:
5.1.7
Summary of Findings
Heat supply companies, who in most cases also operate distribution network, provide heat for
space and water heating to residential houses based on a “normative tariff” determined for a
square meter of heated space and occupancy. The heat supplier is not interested in
implementing heat supply metering, as it may reveal the real energy consumption and the level
of loses, which could potentially have a detrimental impact on the financial situation of the
company. Use of normative consumption in the network for the majority of heating enterprises
are defined according to standards (KTM-204). Data of numerous energy audits have recently
shown that the average heat losses in heat networks during the heating season is not less than
17% of heat supplied to the network and at least 29% - in the non-heating season (summer). As
85
only 13% of the heat entering the distribution system is allowed to be included in calculation of
tariffs, this creates an anti-incentive for introduction of heat metering.
Metering of heat consumption at the input into a residential building usually leads to discovery of
significant differences between the planned and actual volume of thermal energy consumption.
The Tariff Setting Procedure (RCMU No.955) provides for the normative method of planning
thermal energy volumes for heating in the building. While actual sales of heat (based on data of
at least 50 district heating companies) appear to be 20-30% smaller than assumed values. This
leads to the need for recalculation of consumers' fees, which in the case of one-tier tariffs has a
negative financial impact, since companies could not fully cover their fixed costs.
The thermal energy producer, which is simultaneously the heat transporter, supplier of water and
DHW services in a house is not interested in establishing in-building hot water metering either, if
he buys cold water for hot water supply needs. Accounting of hot water consumption at the input
into the residential building in many cases would reveal extra-normative losses of hot water both
at the stage of its transportation and in buildings.
Despite the legal opportunity (according to RCMU No.955) to include into the tariff on provision
of centralized hot water supply services normative heat and water losses in networks of
centralized hot water supply systems, in practice it does not happen.
Water and DHW services provider in a residential house, when investing into systems inside the
building, must capitalize costs of these investments on its balance sheet, which, from the legal
point of view, is not described in the modal contract for provision of the respective services.
Accordingly, there are no standard regulations for the property right on assets created by
investing into energy efficiency of a building. In case of termination of the contract between the
service provider and consumers, investments into the object owned by co-owners of the
apartment house acquire a legally uncertain status, and, therefore, creates potential problems in
accounting and taxation.
The heat supplier in case of a failure to provide services or failure to provide them in full or in
lower quality, have no possibility to recalculate the cost of supply for individual apartments in
case where the supply to the building is metered.61
In the case of water supply and wastewater services, the water supply company is unable to
recover cost if a leak is inside the house62. The water supply company has no resources to
update in-building water-supply systems up to technically acceptable conditions and to prevent
leaks. The costs of current repairs and maintenance are part of the tariff on building
maintenance services. Thus, the water-supply company does not have economic means to
influence housing and service companies in case of poor maintenance of the water system
within the buildings.
There is no clear answer in legislation regarding the possibility of reimbursement of costs in case
of installation and operation of, for instance, heating systems based on alternative energy
sources63.
61
62
63
RCMU of 02.17.2010 No.151 "On Approval of Rules of Recalculating the Centralized Heating, Hot and Cold Water Supply and
Wastewater collection Services Fee in the Case of a Failure to Provide Them or their Incomplete Provision, Provision at a Low
Quality Level"
RCMU No.630 of 21.07.2005 "On Approval of Rules of Providing the Centralized Heating, Hot and Cold Water Supply and
Wastewater collection Services and the Model Agreement for Provision of the Centralized Heating, Hot and Cold Water Supply
and Wastewater collection Services"
"Alternative energy sources – renewable energy sources, which include solar energy, wind, geothermal, tidal and wave energy,
hydropower, biomass, gas from organic waste, gas of sewerage treatment plants, biogas and secondary energy resources, which
include blast furnace and coke gases, coal beds methane gas drainage, technological processes discharge energy potential
conversion", the Law of Ukraine "On Alternative Sources of Energy", No.555-IV of 20.02.2003
86
5.2
FUNDING SOURCES
5.2.1
Funding from State and Local Budgets
Review of the practices of funding capital activities from the state budget (including energy
conservation activities)64 in residential houses indicates that most of the funding of certain capital
activities does not have clear requirements for co-funding by co-owners within the framework of
the first post-privatization capital repair of the buildings.
Quite typical is also allocation of funds to cities, ignoring the needs of co-owners of apartment
houses located in villages and townships. One can also observe that the legislator refer to the
apartment buildings with privatized apartments without a condominium association or HCC as to
"state- and municipally-owned buildings". Certain positive, albeit insufficient, progress can be
observed only in 2010.
Resolution of the Cabinet of Ministers of Ukraine of June 16, 2010 No.461 adopted the
"Procedure of Using the Stabilization Fund Allocations for Implementation of the National
Program for Reforming and Development of the Housing and Communal Economy in 2009-2014
and National Program "Potable Water of Ukraine" for 2006 – 2020", which defines the
mechanism of using the allocated funds in 2010.
According to paragraph 5 of the Procedure adopted with Resolution of the Cabinet of Ministries
in June 16, 2010 No.461, budgetary funds were allocated for implementation of the National
Program for Reforming and Developing the Housing and Communal Economy in 2009-2014,
including:
 Repayment of budgetary accounts payable for work already approved following the
specific programs and already implemented during the 2007-2009 period under the
budgetary programs "Repair and Reconstruction of Heating Networks and Boilers",
"National Program for Reforming and Developing the Housing and Communal Economy",
and "Compensation of the Interest Rate on Loans Aimed at Energy Conservation
Projects Implementation in the Housing and Communal Economy"- amounting to 41 350
thousand UAH. These funds were provided for specific purposes and noted in Resolution
of Cabinet of Ministries No _____. Reconstruction and capital repair of apartment houses
using energy-efficient technologies and equipment (repair or replacement of elevators in
disrepair) – amounting to 43 653 thousand UAH;
 Reconstruction of centralized water supply and wastewater collection systems using
energy saving equipment and technologies – amounting to 84755.3 thousand UAH;
 Energy-efficiency, development and reconstruction of heat supply systems – amounting
to 151 712 thousand UAH;
 Providing state support for investment projects' implementation:
 Technical upgrading and capital repair of residential buildings (put into operation before
January 1, 1989), in which they create new or there are already operating condominium
associations – amounting to 105.742.5 thousand UAH;
 Technical upgrading and capital repair of elevators in the residential buildings, in which
they create new or there are already operating condominium associations – amounting to
40.909.2 thousand UAH;
 Ensuring broad public support for the state policy of reforming and developing the
housing and communal economy – amounting to 650 thousand UAH;
64
The conclusions are mainly built on results of the MDI study in the course of performing the research project "Development of
Methodological Guidance for Organizing the First Capital Repair of an Apartment Building by Its Owners, Co-Owners and the State
through the Co-Financing Mechanism (final), 2010" prepared by LLC "MDI" under the contract with the Ministry of Housing and
Communal Economy of Ukraine.
87
 Implementing pilot projects in the housing and communal economy aimed at improving
the housing stock management system, reducing of relative indicators of use of energy
and material resources, including introduction of alternative energy sources and fuels use
– amounting to 20.000 thousand UAH, of which 10 % – for production of project
estimates (the "working draft" phase).
The funding of all projects was done only on a non-refundable basis pursuant to the procedures
that were approved by the consequent decrees of the Ministry of housing and communal
economy of Ukraine.
According to the State Agency for Energy Efficiency and Energy Conservation, and as
mentioned by Mykola Pashkevich during the press conference "Results of the Agency's
Operation in 2010 Implementation of Priority Reforms in 2011", the government of Ukraine will
launch the preferential loan program which will encourage all individuals to introduce energy
efficient technologies. According to preliminary estimates, such a step will make it possible to
reduce use of heat energy in routine activity by 5.2% of the current consumption rate water
consumption by 4.8% of the current consumption rate, electricity consumption by 3.7% of the
current consumption rate. In Ukraine, preferential loans will also have the form of interest
repayment under loans. "We will initiate the respective amendments to the Energy Efficiency
Program for 2010-2015, so that next year we could start reimbursement of the interest under
loans"65.There are also a number of local initiatives implemented in Ukraine. One of the
initiatives that should be described is the Energy Conservation Program for population of Lviv
region for 2009 - 2012 years66. This is a specialized program focused on improving efficiency
and reducing use of energy resources by population. The program's objective is implementation
of a set of measures for thermo-insulation of buildings and alternative energy supply67. This
program was based on a previous program called “Energy Conservation Program” for the public
sector and population for 2006-2008, and has used the same mechanism, which is described
below.
Within implementation of the regional Energy Conservation Program for the public sector and
population for 2006-2008, for the first time in Ukraine an effective mechanism to stimulate
energy efficiency measures has been developed. The essence of this mechanism is that the
regional budget would reimburse the borrowers who received a loan for energy conservation
measures 15% of the interest rate. Only individuals could participate in this mechanism and
apply for reimbursement of the interest rate68.
For practical implementation of this mechanism, the Procedure of Interest Reimbursement for
loans obtained by individuals for implementing energy conservation measures was developed
and approved with the order of the Head of the Regional State Administration.
According to this Procedure, reimbursement of interest shall be carried out on the basis of the
General Cooperation Agreement between the main manager of regional budget funds allocated
for funding energy efficiency measures and the loan and financial institution.
Reimbursement of interest on loans shall be offered for implementation of the following energy
conservation measures:
65
http://naer.gov.ua/archives/3654
66
http://www.loda.gov.ua/ua/priorities/energysaving/Programs/
67
In this section, we use materials prepared by MDI for IBRD and described in the Report “Municipal Energy Efficiency Market
Assessment in the Selected Ukrainian Cities VOLUME 1: General Review of the Technical Potential and Cost-Effectiveness of Energy
Efficiency Improvements and Key Barriers in the Municipal Sector of Ukraine, 2010”
68
http://www.loda.gov.ua/ua/priorities/energysaving/Programs/
88
 Insulation of the building's walls, floors, roofs and attics.
 Installation of heat recuperators.
 Installation and replacement of windows, entrance doors and window and balcony
constructions.
 Installation and reconstruction of electric heating based on energy-efficient technologies.
 Installation and reconstruction of individual heating systems, including natural gas
alternatives.
The measures would be implemented by a contractor chosen by the borrower. It could be any
company that provides such services.
During the term of the previous program (2006 – 2008), population received 5 320 loans totalling
of more than 44 million UAH (about 8,300 UAH per loan in average), and compensation
payment amounted to 3.3 thousand UAH (about 617 UAH/loan).. During 2008, there was a clear
trend to increase the number of loans and their amount, indicating increased confidence of
population to the state, as well as that people were increasingly more inclined to complex
resolution of energy-efficiency problems.
The regional budget compensated the borrower 15% of the interest rate for conventional energy
conservation measures (insulation of walls, replacement of windows, doors) and 20% - for
measures aimed at implementing alternative energy sources use. The loans were provided by
credit and financial institutions defined as operators under the program. The most active
operators during 2006-2008 were: Oschadbank, Bank Lviv, Kredobank, as well as the credit
unions "Anisia", "Vygoda", "Samopomich." The commercial interest rates for energy efficiency
loans during this period were 24.9% per annum and above, the resulting rate for the borrower to
pay was 9.9% per annum and above69.
The report70 of the Head of one of rayons of Lviv region on implementation of the Program for
Socio-Economic and Cultural Development of Gorodok Rayon in 2010 contains information on
implementation of the regional energy-efficiency program in 2010. Thus, the report states that
the Energy Conservation Program for population of Gorodok rayon in 2010-2012 envisages
reimbursement for Program operators of 15% of the interest rate from the regional budget and
10% of the interest rate from the rayon budget, general agreements were signed between the
Rayon State Administration and credit and financial institutions, namely: CCU "Anisia" (40% per
annum), CC "Lvivska" (30% per annum), CC "Vygoda" (34% per annum), JSCB "Lviv" (24.9%
per annum) and Oschadbank (30% per annum), loans were extended for the total amount of
587.8 thousand UAH for 91 residents of the rayon. The average loan amount is 6.5 thousand
UAH, reimbursement from the rayon budget is 5.0 thousand UAH.
The general problem that currently impedes creation of public-private partnership at
implementation of energy-efficiency projects in the residential sector is the short term of
budgetary support (3 years provided budgetary program implementation) and the annual
changes in terms and procedure of budgetary funding according to the law on the state budget
for the current year.
Since implementation of capital measures in residential buildings provided their funding from the
budget requires meeting a large number of compliance requirements for the design and
69
http://www.banklviv.com/page/ua/personcredits/
70
http://www.gorodok-vlada.gov.ua/engine/2011/03/09/zvit-golovi-gorodocko%D1%97-rajderzhadministraci%D1%97-pro-vikonannyaprogrami-socialno-ekonomichnogo-ta-kulturnogo-rozvitku-gorodockogo-rajonu-za-2010-rik/
89
compliance with the construction funding plan, the annual change in terms of allocation of
budgetary funds actually does not allow state authorities and local self-governments bodies to
implement a large-scale project to support energy efficiency in the residential sector. This
requires creation development of a special state support mechanism. One of possible
mechanisms for such support could be, for example, initially, the Energy Efficiency Fund in the
form of a public law financial institution.
5.2.2
International Development Assistance - Grants
Currently, a number of international technical assistance projects are being implemented in
Ukraine, providing for co-funding of projects in the housing sector. Most of the programs are
intended to support condominium associations and involve co-funding of projects. In Ukraine, a
number of active trade missions of European countries are actively working to support creation
of comfortable, safe, environmentally friendly products and energy-efficient technologies, as well
as environmental awareness.
The Netherlands-Ukraine sustainable energy platform supported by the State Agency of the
Ministry of Economy of the Netherlands (NL Agency) recently suggested the possibility of
funding (partial) for development of a feasibility study for projects in the energy conservation,
energy efficiency and renewable energy sources use spheres. For this purpose, the
representative office of NL Agency in Ukraine has announced a competition for selection of
innovative energy efficiency projects. As a result of the competition, two (2) projects will be
selected, for which Dutch experts in cooperation with Ukrainian partners will free-of-charge draft
project estimates (business plan). One of key aspects of the documents is preparing the project
for obtaining funding and working on criteria for potential creditors and investors. The cost of
drafting the feasibility studies will be covered by the Netherlands counterparts. Participation in
the competition is open to Ukrainian companies, organizations and municipalities that have
projects in the sphere of energy conservation, energy efficiency, waste recycling and alternative
energy sources that require a feasibility study.
The Swedish Trade Council promotes export of goods, products and services from Sweden. It
supports development of Swedish companies in international markets. Main activities – export
information, export development, export consulting. http://www.swedishtrade.se/omexportradet/in-english/
Norway – Ukraine Chamber of Commerce (NUCC) – a non-profit nongovernmental organization
that offers assistance to Norwegian and Ukrainian companies in developing their trade and
economic relations and investment projects. NUCC was founded in 2008 and since then the
association has successfully expanded its membership and contact base, as well as has
contributed into establishing new contacts and exchange of experience among existing and
potential investors. http://www.nucc.no/nuhk-ukraine.aspx
The European Ukrainian Energy Agency (EUEA)71 was established as a joint platform for
representatives of politics, economy, science, financial institutions and consulting companies in
Ukraine and Europe. The aim of the Association is to promote information exchange, making
needs meet available resources in all areas of renewable energy and energy efficiency
technologies, providing business support through legal and legislative initiatives. The
Association aims to become the main partner in the energy sphere of Ukraine and make an
effective contribution into environmental and coherent energy policy.
71
http://euea-energyagency.org/
90
Co-funding by donors of projects in residential houses is planned and realized within the
framework of such projects:
 "Municipal Heating Reform" project, USAID (http://mhrp.org.ua)
 "Energy efficiency in buildings" project, GTZ (www.eeib.org.ua)
 UNDP in Ukraine. Lists the project of UNDP in Ukraine, which cover four main areas:
Prosperity, Poverty reduction and MDG's; Democratic Governance; Local Development
and Human Security; Energy and Environment. Publishes UNDP reports, project
updates, etc. http://www.undp.org.ua/
 "Energy Efficiency: Local Partnership Initiatives" Project is aimed at supporting
partnerships of local authorities and communities to improve energy efficiency /East
Europe Foundation (EEF) – the international charitable organization founded by the
Eurasia Foundation. The list of projects covering energy efficiency
http://www.eef.org.ua/index.php?page=catalog&id=77&pid=1&prj
 International Renaissance Foundation and the list of projects on energy efficiency
http://www.irf.ua/index.php?option=com_content&view=article&id=28186&Itemid=425
 EU Delegation in Ukraine, with the list of projects, including demo projects in partner
cities. http://ec.europa.eu/delegations/ukraine/projects/overview/index_en.htm.
 Netherlands-Ukraine Energy Platform supported by the State Agency of the Ministry of
Economy of the Netherlands (NL Agency) www.nusep.org.
5.3
CAPACITY AND WILLINGNESS OF RESIDENTS TO FUND INVESTMENT NEEDS
Capacity and willingness of residents to fund investments in energy efficiency was evaluated
through conducting three focus groups of residents of apartment buildings with a process
structured around the issues of enhancing energy-efficiency in the housing sector. Focus groups
were held in Kyiv during the March-April, 2011 using the method of qualitative analysis based on
focus group discussions. The objectives of the survey included obtaining residents' interpretation
of the concept of "energy-efficiency" as applied to apartment houses, assessing the level of
respondents' awareness of energy-efficiency measures and their costs, examining opinions of
target groups representatives about relevance of the problem of energy-efficiency enhancement
in the housing sector in Ukraine. An important objective was also to understand the residents'
vision of the role of stakeholders in the energy efficiency enhancement process. The main focus
of the discussion was on defining residents' readiness to fund implementation of energyefficiency measures. The process and results of the focus groups are provided in a separate
report, and this chapter offers the summary of main results.
Focus group discussions were held with the following population categories:
1. Low-income citizens (including unemployed and retired citizens) – 9 persons;
2. Middle-income citizens (in particular, representatives of the budgetary sector – medical
and teaching staff, further referred to as – budgetary employees) – 9 persons;
3. Citizens with incomes above the average (company top managers, managers, further
referred to as – business representatives) – 10 persons.
The main results from all three focus groups are summarized as follows:
Interpretation of the "energy efficiency" concept: Interpretation of the term "energy
efficiency" appeared to be problematic with a part the respondents. Budgetary employees and
business representatives formulated this concept more clearly than low-income participants.
Energy efficiency as applied to a house is seen by them as a condition for ensuring the
necessary comfort of living at the lowest possible costs, and without wasting resources. Part of
91
the low-income focus group participants understood energy efficiency rather narrowly,
associating this term solely with energy conservation and reducing payments for it, without
understanding of the energy conservation process.
Awareness of energy efficiency measures and their cost: Almost all focus group participants
have some ideas about what energy efficient measures may be. People were aware of some
energy efficiency measures and their cost either from their own experience, or from friends,
relatives and neighbours. Only few of them claimed to have heard or read “something” about
energy efficiency in mass media. One woman expressed gratitude to organizers for the invitation
to participate in the focus group, as in the discussion process she had learned so much new and
interesting information. The most popular energy efficiency measures ensuring thermal comfort
is replacement of windows, entrance doors and walls insulation. Thermal insulation of the roof or
the basement as an energy efficiency measure was suggested by only a few respondents.
Installation of an individual heat source (local heater or apartment boiler) as an energy efficiency
measure was not mentioned by any of the participants. For many respondents, an important
energy efficiency measure is the ability regulate/control heating supply inside the apartment, for
example, by installation thermostatic valves. Some representatives of low-income categories
and businesses believe that enhancement of energy efficiency and energy conservation can be
provided by apartment level heat supply metering, which will make it possible to pay only for
heat consumed, not the "mythical" square meters.
Evaluation of perceived urgency of the energy efficiency and energy conservation issue
for population of Ukraine. According to the overwhelming majority of respondents, population
is not very serious about the issue of energy efficiency and energy conservation. Participants
explained such situation in different ways. Some believed that in current challenging conditions
people are concerned more about more pressing issues, such as plain survival. Others attribute
low interest in energy conservation to the long-lasting habit of negligent use of resources due to
their availability and low cost. Although the majority of focus group participants believe that an
incentive to improve energy efficiency of the housing sector is increasing the cost of the energy
for population, some respondents believe that it is also necessary to inform residents about the
role of energy conservation and enhancing energy efficiency in the context of protecting the
environment and preventing climate changes.
Participation of the state, local authorities, utility companies and population in improving
energy efficiency of the housing sector: A significant part of respondents could not offer clear
answers to what should be done by the state, local government and utilities to improve energy
efficiency. Their recommendations regarding involvement of authorities were mostly declarative
and superficial. At the same time, a part of business representatives rather negatively assess
actions of the state in the field of enhancing energy efficiency. Some participants would expect
from the state improvement of the legislative framework for enhancing energy efficiency at all
levels and activation of awareness activity in key energy conservation issues. The majority of
respondents in all focus group attributed a decisive role in improving energy efficiency to
residents. Participants living in cooperative houses and the houses where condominium
associations have been created, based on their experience, believe that the future role in
enhancing energy efficiency belongs to condominium associations. This opinion was supported
by many participants.
Readiness to fund implementation of energy efficiency measures: The majority of focus
group participants of all categories are ready to invest in energy efficiency projects for apartment
houses. The most appropriate funding terms for low-income residents and budgetary employees
are instalment or a loan for the period of up to 4-5 years, while for business representatives it
was for the period of from six months to one year. Less than half of business representatives are
92
ready to pay the cost of improvements as a lump sum. Some respondents from among lowincome residents and budgetary employees expect state participation in financing of energy
efficiency enhancement or expect that state should provide guarantees for contractors'
performance. Residents of buildings with condominium association are the “absolute supporters”
of residents' participation in funding of energy conservation measures.
93
94
6.
FINANCING MODELS
This section analyses potential financing models that can be used to provide financial resources
for implementing energy-efficiency measures in residential building stock in the Ukraine.
6.1
GENERAL MODELS
The Consultant has prepared several financing models, which can be presented under the
following main categories:
 Credit line models
 Energy-Efficient Revolving Fund model
 ESCO model
Each model is described in the following chapters. It should be noted that these models shall only
be considered as a guide for the costs and benefits from the energy-efficiency investment. The
calculations were made based on the following tariffs valid currently in Ukraine, as presented in
Exhibit 38:
Exhibit 38: Energy tariffs used in financing models
Tariff
Gas,
per m3,
average1)
Heat,
per kWh
average2,3)
Electricity,
per kWh,
average4)
UAH
1.5
0.22
0.22
Euro
0.13
0.02
0.02
1)
– tariffs for gas for the population in Ukraine are differentiated depending on the volume consumed for
3
the previous year. Thus, for example, the consumers which use less than 2,500 m per year have tariff
3
3
0.72 UAH/m if there is installed meter, and 0.79 UAH/m of there is no meter installed. The consumers of
3
3
3
3
gas from 2,500 – 6,000 m per year shall pay 1.1 UAH/m , over 6,000 m per year – 2.25 UAH/m and
3
3
over 12,000 m per year - 2.68 UAH/m .
2)
– tariffs for heat for the population in Ukraine are formed by each community. The Ministry of Energy of
Ukraine publishes the heat tariffs for each Oblast centres, which vary from 122 UAH/MWh (142
UAH/GCal) to 344 UAH/MWh (400 UAH/GCal).
3)
– tariffs for heat expressed in UAH/GCal are recalculated to UAH/kWh.
4)
– tariffs for electricity for the population in Ukraine vary depending on a number of factors: on availability
of district heating in the area, location of the object (rural areas), installed in the building electrical cooking
stoves. The tariffs very from 0.18 UAH/kWh to 0.24 UAH/kWh.
Energy tariffs are gradually growing in the Ukraine, so in the future the economic benefits from the
implemented energy-efficient measures will be even more attractive for the residents.
6.2
CREDIT LINE MODELS
Credit Line financing is the most typical model for financing energy-efficient projects, especially in
the residential sector. A number of loan facilities for residential sectors in Slovakia (SLOVSEFF)
and Bulgaria (EBRD Residential Energy Efficiency Credit Line) showed a large success of such a
model. However, considering the legal arrangements, the situation in Ukraine is far behind other
countries, such as Slovakia, creating a number of obstacles for attracting loan funding in energyefficient projects in the residential sector. So far no bank in the Ukraine offers a product in the
95
Ukrainian market for energy-efficient improvements. Interviews with the banks showed the
following main obstacles:
 A Condominium Association (CA) is not treated as a viable borrower, since the Ukrainian
Law does not give clear procedure on collecting debts by the CA from the individual
owners.
 The CA market is considered by the local bankers as small for now – 12,000 CA are
registered in the Ukraine, and yet the banks are not very interested to develop new
product for such a market. However, the Government is actively promoting establishing
CA’s in the Ukraine and it is expected that by 2014 this numbers will increase
dramatically.
 Residential EE in multi-storied apartments is perceived to be a social project, which has
to be supported by state and developed by state. Since flat owners have very different
income in one building, low income residents may be an obstacle for EE investment;
pensioners are viewed as the group that does not care about investment at all; so it is
expected that this sector may offer very low profit;
 Usually simple investment payback period of retrofit investments exceed 5 years, while
the bank has no long term capital in UAH;
At the same time, the local Banks are interested to penetrate this market and do not see the
obstacle to sign loan agreements with each apartment owner individually (similar to consumer
loans with the apartment as collateral). Involvement of state banks, which would reduce the risks
for the commercial banks for such loans, is also welcomed by the local banks.
Advantages of Energy Efficient credit lines:
 credit lines are the most straightforward approach to financing the energy efficiency
improvements, with good success rate, proven background, and are widely used
internationally
 executed through existing network of professional lenders (commercial banks)
 credit lines with preferential loans (with advantageous interest rates) provide additional
incentives for the population to invest into energy efficiency in their buildings
 develop the market for energy efficiency in residential sector: starting from the awareness
raising among the population, developing demand for energy efficiency services and
products, and ending with the development of interest towards energy efficient
investments among the local commercial banks
Disadvantages of Energy Efficient credit lines:
 uncertainty in energy savings require stable creditworthiness of the client (or provision of
substantial technical assistance on development of the energy efficiency projects to the
population to be able to develop project cash flow)
 depending on needed technical assistance in some cases the transaction costs may be
quite high
 Preferential credit lines may support “artificial” demand for energy efficiency created by
only by such incentives like soft interest rates or grant state support, depending on the
level of such incentive.
In terms of credit line financing, the following models can be considered by the Bank:
 Model N 1: Apartment Block connected to the District Heating System
 Model N 2: Apartment Block not connected to the District Heating System
 Model N 3: Individual apartment in the apartment block
96
 Model N 4: Single family house
In terms of individual apartment in the block apartment buildings, the Consultant would
recommend not to encourage insulation of the building envelope individually for each apartment –
such arrangement is not attractive from aesthetical and architectural point of view. Besides, such
arrangement was not very good in the National Grant Facility Program for residential sector in
Bulgaria, so it was decided to drop such an option for individual apartments.
In terms of a heating source for an individual apartment in the block apartment buildings, the
Consultant would recommend not to encourage the switching off from the existing district heating
and installation of individual gas boilers. During the recent years a lot of inhabitants disconnected
themselves from the district heating networks and installed individual gas boilers at the level of the
apartment, mainly due to poor district heating quality. This situation caused additional technical
problems, destroying the district heating networks, carrying health risks for not proper venting the
flue gases and overloading the capacity of existing gas distribution pipelines. The Ministry of
Housing and Communal Services (Previously the Ministry of Communal Services of Ukraine) was
repeatedly highlighting this problem and is taking actions to stop or hinder the process of
unauthorized switching off from the district heating networks.
6.2.1
Model N 1: Apartment Block Connected to the District Heating System
The assumption for this model is the apartment block, located in the climatic zone I of Ukraine
(which includes most of the oblasts of Ukraine: Rivenska, Zhitomirska, Ternopilska, Chmelnitska,
Vinnutska, Kyivska, Chernigivska, Sumska, Cherkasska, Poltavska, Kharkivska, Kirovogradska,
Luganska, Donetska), built before 1980 and connected to the district heating networks.
For the Apartment Block connected to the District Heating, the following measures could be
suggested for the credit line application:
 Wall insulation: insulation of walls with, for instance, mineral wool to achieve the
thermal resistance of the walls to be in accordance with the current Ukrainian building
norms. For instance, in the climatic zone I the thermal resistance of the wall shall be
minimum 2.8 m2∙К/W (or U-value 0.36 W/m2∙К). It means that the model building should
have additional mineral wool or polystyrene boards insulation of approximately 100 mm.
Initial investment is 360 UAH/m2 of outside wall.
 Roof insulation: insulation of roof with, for instance, mineral wool to achieve the thermal
resistance of the roof to be in accordance with the current Ukrainian building norms. For
instance, in the climatic zone I the thermal resistance of the roof shall be minimum 3.3
m2∙К/W (or U-value 0.3 W/m2∙К). It means that the model building should have additional
mineral wool insulation or polystyrene boards 150-200 mm thick. Initial investment is
about 300-350 UAH/m2 of flat roof excluding water proofing.
 New energy efficient windows: to correspond to the current building norms in the
Ukraine for the climatic zone I the window in the building with more than 4 stories shall
have thermal resistance minimum 0.5 m2∙К/W (or U-value lower than 1.8 W /m2∙К). To
achieve this usually the double glazed windows shall have low emission coating and
filled with inert gas (for instance, argon) according EN ISO 10077-1/2006. It can also be
triple-glazed window with air filling but the gaps between the glazing shall be more than
12 mm. Initial investment is 800-900 UAH/m2 of new window.
 New automatic heating substation: such substation shall include central controller,
which can regulate heat supply depending on the outside temperature and the day or
night heat supply regimes. Such substation shall also include heat exchangers for the
domestic hot water supply, circulation pumps, temperature controls. Besides this, such
heating substation shall be equipped with the heat meter(s). The pipes in the heating
substation shall be properly insulated to avoid the heat losses. Initial investment is –
90,000 – 100,000 UAH per block.
97

Thermostatic valves on the radiators: it is assumed that the building has single pipe
system with by-pass sections on each radiator. At the same time, most of the residential
buildings in the Ukraine have single pipe system and such buildings should get additional
technical expertise on selection of proper valves and balancing of the heating system to
prevent disturbance of the heat distribution from apartment to apartment. It is also
recommended to flush the heating system in the building (especially if it has not been
done for years) before installing the thermostatic valves to avoid clogging of the valves
with sediments. Initial investment is 250-350 UAH per radiator for TRV installed including
balancing and cleaning the heating system.
 Replacement of lighting: it is assumed replacement of most used incandescent lamps
4-5 per apartment with CFL 15-20W. Initial investment is 35 UAH per lamp. The LED
lamps are still too costly for average inhabitant with prices starting from 500 UAH per
bulb. The Exhibit 39 presents the summarized economical results for this model:
Exhibit 39: Assessment of EE measures for Model 1.
EE Measures
Investments per
conditioned area
2
[UAH/m ]
2
[€/ m ]
Net savings
per conditioned area
2
2
[UAH /m . [€/ m .
2
[kWh/m ]
year]
year]
Payback
[years]
1
144
12.5
32.8
7.2
0.6
19.9
2
3
4
5
6
New windows
New automated substation
Thermostatic valves
Total
92
80
23
14
2
355
8.0
7.0
2.0
1.3
0.2
31.0
27.0
12.8
9.8
9.8
4.9
97.2
5.9
2.8
2.2
2.2
1.1
21.4
0.5
0.3
0.2
0.2
0.1
1.9
15.4
28.3
10.7
6.6
2.0
16.6
Based on the table above, the loans could be offered for the different set of measures, for
instance:
 1. Medium type loans: including package of measures such as: No 2. New windows,
No 4. New automatic heating substation, No5. Thermostatic valves on radiators, and
No 6. Lighting. (for 8,000 per apartment or about 700 EUR), which will have average pay
back of 11 years
 2. Total thermo - modernization type loans: including all measures from the table
above. The current tariffs of 0.22 UAH/kWh will return the payback at level of 16 years.
With average 60 m2 useful area per apartment, the average investment can be 21,300
UAH or 1,900 EUR per one apartment/household. The total savings of delivered energy
(final consumption) is 46 %. The new EP (energy performance) indicator for the
apartment building will be 112 kWh/m2 compared to the baseline energy consumption of
210 kWh/m2. For the apartment block with 60 apartments the investment for
implementation of all EE measures per block will be about 1.3 million UAH or 115,000
EUR. Such investment should include big part of governmental subsidy to make the loan
feasible for the inhabitants.
It should be noted that some inhabitants have already replaced their old windows individually, and
therefore would not be keen to re-invest in the new windows, even though with better thermal
quality.
Main economic assumptions to make the total thermo - modernization loans possible and
feasible for the inhabitants:
 Lender: Credit line participating bank or local financial institution accepted as lender
under the credit line conditions
98
 Borrower: Loan provided to group of individual apartment owners cooperating together
through designated agreement or to CA (in case the Law defines clear mechanism for
repayment the liabilities by CA);
 Equity level minimum 10 % (owners capital cash contribution)
 Grant level minimum 50% (state subsidy) available and payable on loan drawdown;
 Tenor up to 8 years (case dependent);
 Repayment: monthly annuities with no grace period
 Interest rate not more than 10% in euro. Loan should be determined according the risk
evaluation of the client and project by the credit line participating lender. Higher interest
rates will lead to increasing the state subsidy to keep loans feasible for the inhabitants;
 Technical assistance for the feasibility study/energy audit or preliminary design needed

6.2.2
Technical assistance for determining the approved technologies, equipment and
providers needed
Model N 2: Apartment Block Not Connected to the District Heating System
The assumption for this model is similar to the previous one, but for blocks not connected to the
district heating. Therefore the building envelope measures would be similar to the previous model.
The measures for thermostatic valves would also be applicable for this model, while new
automated heating substation measure will be replaced with:

High efficiency or condensing gas boiler up to 300 kW: this measure also includes all
necessary automatic controls allowing to regulate heat supply depending on outside
temperature and day/night mode including preparation of domestic hot water. The tariff of
0.29 UAH/kWh used in this case is for consumers spending more than 12,000 m3 gas per
year.
The Exhibit 40 presents the summarized economical results for this model:
Investments per
conditioned area
EE Measures
2
[UAH/m ]
1.
2.
3.
4.
5.
6.
New windows
New high efficiency boiler
Thermostatic valves
Total
144
92
80
51
14
2
383
2
Net savings
2
[€/ m ] [kWh/m ]
12.5
8.0
7.0
4.4
1.3
0.2
33.4
Payback
38.6
28.9
15.7
33.4
12.0
4.9
133.5
2
[UAH /m .
year]
11.2
8.3
4.5
9.6
3.5
1.1
38.2
2
[€/ m .
year]
1.0
0.7
0.4
0.8
0.3
0.1
3.3
[years]
12.9
11.0
17.7
5.3
4.1
2.0
10.0
Based on the table above, the loans could be offered for the different set of measures, for
instance:
 1. Medium type loans: including package of measures such as: No 2. New windows,
No 4. New high efficiency boiler, No5. Thermostatic valves on radiators and No 6.
Lighting (for 10,500 UAH per apartment or about 930 EUR) which will have average pay
back of 7 years
 2. Total thermo - modernization type loans: including all measures from the table
above will give average payback of 10 years. With average 60 m2 useful area per
99
apartment,
the
average
investment
can
be
24,000
UAH
or
2,125 EUR per one apartment/household. The total savings of delivered energy (final
consumption) is 52 %. The new EP (energy performance) indicator for the apartment
building will be 123 kWh/m2 compared to the baseline energy consumption of 256
kWh/m2. For the apartment block with 60 apartments the investment for implementation
of all EE measures per block will be about 1.45 million UAH or 128,000 EUR. The
investment should include governmental subsidy to make the loan feasible for the
inhabitants.
In the case that buildings already connected to the district heating will decide to switch off and
develop their own boiler stations – the higher gas tariffs for such bigger consumers (0.29
UAH/kWh gas) is a stopper for such development.
Main economic assumptions to make the total thermo - modernization loans possible and
feasible for the inhabitants:
 Borrower: Loan provided to group of individual apartment owners cooperating together
through designated agreement or to CA (in case the Law defines clear mechanism for
repayment the liabilities by CA);
 Tenor up to 6 years (case dependant);
 Technical assistance for the feasibility study/energy audit and or preliminary design
needed
 Technical assistance for determining the approved technologies, equipment and
providers needed
Model 2A: The model is the same but for heat supply with oil boiler and applicable to less than
1 % of the building stock apartment blocks. Such buildings should be treated separately and
analyzed case-by-case for fuel switch to gas, heat pumps, or biomass.
Model 2B: The model is the same but switching from gas or coal to high efficient biomass boiler
returns negative cash flow because of the higher tariff for heat produced with biomass boilers.
With current prices of about 0.35 UAH/kWh (1800 UAH/ton pellets) for biomass boiler compared
to 0.29 UAH/kWh for gas or 0.15 UAH/kWh for coal boiler will make such case not feasible.
Apartment blocks using coal boilers represent not more than 2% of the building stock.
6.2.3
Model N 3: Individual Apartment in the Apartment Block
As mentioned earlier, in order not to encourage implementation of insulation not corresponding to
norms and architectural requirements to the building envelope only for individual apartment, this
model assumes that no work shall be done on partial insulation of walls and roof by individuals in
apartment blocks.
Typical measures and investments for the average apartment of 60 m2 could be as follows:
100
Investments per
conditioned area
EE Measures
2
[UAH/m ]
Net savings
Payback
2
2
[€/ m ] [kWh/m ]
2
2
[UAH /m . [€/ m .
year]
year]
[years]
1.
New windows
92
8.0
27.0
2.1
0.2
43.7
2.
High Efficiency Individual Gas
Condensing boiler (only in case
there is no district or centralized
heat supply)
160
14.0
30.5
2.4
0.2
66.7
3.
Thermostatic valves
14
1.3
9.8
0.8
0.1
17.9
4.
2
0.2
4.9
1.1
0.1
2.0
268
23.5
72.2
6.4
0.6
41.9
Total
The average investment will be 16,100 UAH or 1,450 EUR per one apartment/household. The
total savings of delivered energy (final consumption) is 30%. The current gas tariff of 0.078
UAH/kWh (0.007 EUR/kWh) doesn’t make such projects cost beneficial without substantial grants
provided by state or donors.
6.2.4
Model N 4: Single Family House
Unlike the multi-apartment buildings, the single family houses usually do not have juridical
obstacles in entertaining the credit line facilities for retrofitting and improving their energy
efficiency. It is also important to underline that this model would be important for the Ukraine, as
nearly 53% of the buildings in Ukraine are single family houses.
In addition to the energy-efficiency measures for the building envelope, high efficient gas, or
biomass boiler, as well as installation of thermostatic valves, for this model the following measures
could be applicable:

Heat pump system: one should note that efficiency and cost of such system will very
much depend on application conditions: starting from the climate, availability of heat
sources, and ending with the operational conditions. Therefore technical evaluation will
be important when applying credit line facilities for this measure.

Solar systems for domestic hot water: for the Ukrainian climate the annual delivered
heat from solar energy can vary from 300 to 800 kWh/m2 of solar collector, depending on
the region, efficiency, pattern of use, type of solar energy system, level of automation,
and accumulation. This measure can be especially of interest for southern parts of the
Ukraine, especially Crimean area, as well as for application at the summer houses in the
rest of the regions of Ukraine. The prices can vary from 2500 to 8000 UAH per m2 for
“turn key” solar energy systems and are dependent on efficiency, type, complexity, and
size. The payback for the solar heating system replacing domestic hot water preparation
with electricity (tariff 0.22 UAH/kWh) will vary from 10 to 25 years.
Even though these measures require usually high investments, their high efficiency can be
attractive to the home owners with higher level of income. Besides, the interviews with the
different focus groups showed the interest to invest in solar hot water systems on their summer
houses even within medium income inhabitants.
Thus, the typical measures and investments for the average single family house of 65 m 2 could be
as follows:
101
Investments per
conditioned area
Net savings
EE Measures
2
[UAH/m ]
1.
2.
3.
4.
5.
6.
New windows
New high efficiency boiler
Thermostatic valves
Total
2
[€/ m ]
182
136
111
206
17
3
655
16.0
12.0
9.7
18.0
1.5
0.3
57.5
Payback
[kWh/m
]
2
2
[UAH /m .
year]
59.6
26.1
40.4
31.5
11.0
4.9
173.5
9.4
4.1
6.4
5.0
1.7
1.1
27.7
2
[€/ m .
year]
[years]
0.8
0.4
0.6
0.5
0.2
0.1
2.6
19.3
32.9
17.3
41.4
9.7
2.4
23.6
With average useful area per single family house of 65 m2, the average investment can be 42,600
UAH or 3,800 EUR per house. The total savings of delivered energy (final consumption) is 53%. If
all EE measures are implemented the new EP indicator for family house will be 153 kWh/m 2
compared to the baseline energy consumption of 327 kWh/m2. The current gas tariff of 78
UAH/MWh (0.007 EUR per kWh) doesn’t make such projects cost beneficial unless new tariff
policy or governmental subsidy on EE investments will be introduced.
Main economic assumptions to make single family type loans possible and feasible for the
inhabitants:
 Borrower: Single family house owner
 Tenor up to 10 years (case dependent);
 Technical assistance for the feasibility study/energy audit and or preliminary design
needed
 Technical assistance for determining the approved technologies, equipment and
providers needed
Eligible projects to benefit from the low interest credit line and technical assistance can be
implementation of any combination of separate energy efficient technology, equipment or building
reconstruction/renovation which can return a minimum 20 % savings if the building owner
(borrower) can meet the requirements of 25 % equity with tenor up to 5 years without grant
subsidy. In such case the incentive reimbursement of 10-30 % of the loan amount can be
executed when 50% of the loan is paid.
102
6.3
ENERGY EFFICIENT REVOLVING FUND
Energy Efficient Revolving Funds usually offers loans under soft conditions, which are repaid due
to energy savings. The repaid loans are used to finance new energy efficiency projects.
In 2005 Bulgaria launched Energy Efficiency Fund (BgEEF), which could serve as a good
example for a similar fund in the Ukraine. For this Fund, GEF provided a grant of 10 million USD,
co-financed by the Government of Bulgaria and bilateral donors. The Fund was flexible to employ
debt finance or guarantees as needed. The Fund employed a Fund Manager on a Performance
Contract. By May 2010 approximately 40 million USD had been invested in energy efficiency
projects (with approximately 7 years payback period), and around half of the project were in
municipal buildings. According to the World Bank, the Energy Efficiency Funds can provide good
leverage of initial capital but money recycles slowly so there is a constant need for new capital. In
the first phase, Energy Efficiency Funds are an excellent way of kick-starting an EE market and
getting local banks involved.
It is also worth mentioning that GEF provided a grant for EE Fund for municipal vehicle to achieve
EE in residential buildings in Vilnius (Lithuania). This also attracted local banks to active
involvement in financing of energy efficient measures in the residential sector. Large savings were
demonstrated but uptake was very slow.
The Energy Efficiency Revolving Fund can provide loans with soft conditions to the households
similar to the models describe above (under “credit line” models). It should be noted that if such a
fund is established for the residential sector in the Ukraine it may face similar juridical obstacles
with CA and multi-apartment buildings as the credit line models described above.
In addition to the loan products, the Fund can also provide guarantees (similar to the Residential
Portfolio guarantee of the BgEEF), when beside the guarantee to the commercial banks, the Fund
also helped households in the buildings to develop a bankable project. The Fund can guarantee
that it will cover the first 5% of the defaults within the apartment block building (or portfolio of
blocks).
Schematically this Residential portfolio guarantee can be illustrated in the following way, as shown
in Exhibit 43:
Exhibit 43: Energy Efficiency Revolving Fund scheme.
Commercial
Bank
Loan
repayment
Loan
Houselolds
(if there is no OSBB
established, the agreement on
the loan repayment can be
concluded with each of the
apartment, proportionally to
their built-up area)
Guarantee
Energy
Efficient Fund
Technical assistance in
project development
Advantages of Energy Efficient Revolving Funds:
 Revolving Funds, similar to the credit lines are also straightforward approach to financing
the energy efficiency improvements
103
 Similarly to credit lines, they provide initial capital outlay
 Usually such Funds provide preferential loans (with lower interest rates than average
market rates) with longer payback periods
 Revolving Funds contribute to development of energy efficiency markets: starting from
the awareness raising among the population, developing demand for energy efficiency
services and products, and ending with the development of interest towards energy
efficient investments among the local commercial banks
 The Funds re-invest into new energy efficiency projects, improving the use of state funds,
which are usually initially allocated for state energy efficiency programmes
Disadvantages of Energy Efficient Revolving Funds:
 due to needed technical assistance the transaction costs may be quite high
 compared to credit line usually takes longer negotiation period for establishing such fund
(the Fund shall be registered as financial institution).
 compared to credit line usually takes longer period to launch the fund
 there is constant need in new capital as the money recycle quite slow, since the
Revolving Funds functions on repayments of the investments based on energy savings
 Revolving Funds with their soft conditions may support “artificial” demand for energy
efficiency created by only by such incentives

High cost of operating such funds with longer administrative procedures
In case of establishment of such Energy Efficiency Funds in the Ukraine aimed at the residential
sector, the following main stakeholders can be proposed:
 The Government of Ukraine (providing funds into the Fund following the National
programs on supporting the renovation of residential sector of Ukraine)
 EBRD
 Other commercial banks
 International and local donors
The indicative financing conditions can be as follows:
 loans from 15,000 EUR – 500,000 EUR provided to single family houses, group of
individual apartment owners cooperating together through designated agreement, or to
CA (in case the Law defines clear mechanism for repayment the liabilities by CA);
 Equity of the borrower – minimum 10%;
 Loan Grace period 2 years with a 10 year repayment;
 Grant 20-35% payable on loan drawdown;
 Interest rate on the loan 10% per annum (can be negotiated, based on the risk evaluation
of the specific project);
 Management fees (3%);
 Technical assistance cost
6.4
ESCO MODELS
The basic role of an ESCO is to provide energy efficient services to the consumers. It usually
performs the following services: energy auditing, arranging financing, implementation or
supervision of the implementation of the proposed measures, equipment commissioning,
maintenance of the installed equipment, measuring, verification of the savings. These activities
104
are usually done through the Energy Performance Contract (repayment of the investments
through the guaranteed energy savings).
Simplified financing scheme for the ESCO model is illustrated In Exhibit 44:
Exhibit 44: ESCO scheme.
Loans
ESCO
Bank(s)
(undertakes energy efficient
investments)
(provides loans to ESCO,
can be based on individual
subprojects)
Loan
repayment
EE
investments
Repayments
Consumers
The ESCO model is one of the solutions that in many markets of Europe have proved to be
efficient in working with the consumers that might not have sufficient technical knowledge and
skills, management capacities, technology information, and investment capital. However, it should
be noted that in general the main focus of ESCO activities is in the public sector, while the ESCO
model for residential sector is not so widespread in Europe. In some countries, such as Sweden,
Estonia, and Lithuania ESCOs achieved good business development in the residential sector
(according to ECEEE 2007 Study “Latest developments of the ESCO industry across Europe”).
While ESCO is typically considered as a good model for implementing energy efficient projects
and developing the market of energy efficient services, it is also regarded as a complicated
solution.
ESCO models for financing of energy efficient projects were introduced in the Ukraine some time
ago. However their business is mainly developed in industrial or SME sectors, while the demand
for such services in the residential sector is not yet created in the Ukraine.
Advantages of ESCO models for operating in the residential sector:
 Good model for implementing energy efficient projects when dealing with single
owner/decision maker (e.g. owners of single family houses or condominiums).
 Provides incentives to achieve as much energy saving as possible. ESCO is well
motivated to achieve maximum energy savings as its revenues depend on measured and
verified savings.
 If the ESCO is based on utility company, it provides advantages in terms of technical
expertise and project implementations skills, name recognition, and the existing
consumer’s network. This approach is applicable in the Ukraine.
 Similarly to credit lines, they provide initial capital outlay for the building owners.
Disadvantages of ESCO models:
105
 Considered as more complicated solution, as need to settle down all issues related to the
lifetime of the project (ESCO agreement), including measuring and verifying the savings,
transfer of ownership and other.
 Requires that ESCO shall have expertise in engineering, law and finance. And vice versa
– requires good capacities from the building’s owners to understand how to organize and
operate such scheme with energy performance contracting. Substantial training will have
to be introduced to ESCOs and CAs to be able to mutually benefit from implementation of
this model.
 Usually is considered as more costly solution, as ESCO need to cover all the risks
related to the operation, savings, verification and repayments
 In Ukrainian conditions this model will have additional challenges to function. They are
mainly related to complicated and not clear procedures for Energy Performance
Contracting (related to application in apartment block buildings):

interconnection of tariffs for communal services,

schemes for investment repayment by each apartment in multi-apartment buildings

connection of communal services tariffs with subsidies for the inhabitants with low
income
 ESCO has quite high operational risk related to Energy Performance Contracting - in
verifying the real savings vs. “normalized” savings. This challenge, besides climate
conditions, is related to “baseline” issue – poor indoor climate and poor functionality of
the building services, which is quite often situation in the buildings in Ukraine.
From the models presented above, under the current circumstances in the Ukraine, the
Consultant would recommend this model as the least priority for the time being.
6.5
CONCLUSIONS AND RECOMMENDATIONS
Ukraine is gradually opening for the lending market for implementation of energy efficient
measures in the residential sector. At the same time there are a number of legal obstacles related
to CA and multi-apartment buildings, which were mentioned above, to open broader markets for
such lending. Therefore the Government of Ukraine will need to take action as soon as possible
with regards to improving laws on Condominium Associations to make them viable borrowers for
the local banks.
Similarly, financial education for consumers and education of the bankers with regard to
investment in energy efficiency in the residential sector still needs to be addressed in the Ukraine.
As also seen in other countries by international donors, the local banks will need extensive
training and hand-holding before they will be willing/able to lend to energy efficiency in the
residential sector and develop a project pipeline. Furthermore, implementation capacity is often
considered as one of the major barriers for establishing a proper framework for the energy
efficiency in the residential sector.
The interviews with the local banks and the households focus groups showed that there is an
interest in investing in energy efficiency, especially under conditions of constantly increasing
energy tariffs.
So far it seems that the local banks prefer to fund households individually. However, as soon as
legal obstacles with CA are eliminated, the bank would be happy to propose the product for the
joint loans for CA.
106
The Consultants proposed a number of relatively simple financial models highlighting the effects
of funding a range of energy efficient investments, including the participation of the governmental
funds.
There are two alternatives that the consultant can offer to the Bank:
1. The Bank can consider providing a €250 Million credit line that can be shared amongst
four to six (4-6) participating Ukrainian banks or financial institutions against similar
obligation from the Ukrainian government to invest and subsidize EE reconstructions in
the residential sector and in parallel revising the energy tariff policy.
The financing model used by EBRD in Bulgaria and Slovakia proved to be successful and
could be replicated in the Ukrainian residential market. This model shall also include
technical assistance to the local banks and borrowers – which can be arranged through
the expert team consisting of international and local experts (can be recruited by EBRD).
Such a team, besides providing assistance in project development and project
implementation, would assist in structuring, operating, and monitoring of the facility. The
team shall also include marketing experts for planning and implementation of the
promotion campaigns for the facility.
Through the participating banks, the grant component (mainly provided by the
Government) can be distributed. For this, the consistent procedure shall be established to
avoid any frauds related to grant applications.
As mentioned previously, current legislation in the Ukraine results in unattractiveness of
the lending to CAs, therefore the Banks are more willing to conclude separate lending
agreements with the individual apartment owner, than to work with such associations.
However, such a loan arrangement is much less efficient, therefore relevant adjustments
to the Condominium Law need to be promoted by the Bank to the Ukrainian Government.
In the meantime the Banks are willing to arrange the loan repayment individually by each
flat.
2. The Bank can consider providing a facility of €150 Million for the Energy Efficient
Revolving Fund. Such a Fund can be based on the model used by the Bulgarian Energy
Efficient Fund, which is mainly used by public sector, but also is open and available for
the residential sector, with obligatory participation of the Governmental funds, and other
possible donors. We believe that such a model would give the possibility to consolidate
more easily the funds from the Government and other donors, interested to support
energy efficiency in the residential sector in the Ukraine. At the same time, it will also
contribute in attracting local banks to enter the market of energy efficiency investments in
the residential sector. However, this model might require a longer time for negotiations
with the Ukrainian Government as it will require proper establishment of such Funds (with
the proper Statute documents reflecting the transparency of such institutions and the
Board Members representing the donors) and its registration as financial institutions in
accordance with the Ukrainian Law.
107
Annex 1: Terminology
ARoC
AUB
BgEEF
bln
СA
CCU
CEC
CH
CHP
CoMU
Cub. M
DH
DHS
DIGH
EA
ECU
EE
EEF
ENSI
EP
ESCO
EU
EUEA
EUR
FER
Gcal
GDP
GEF
GIZ
GTZ
GWh
HCC
HCU
HCE
HCS
HIS
HWS
IB
IEA
IFI
IMC
Autonomous Republic of Crimea
Association of Ukrainian Banks
Bulgaria Energy Efficiency Fund
billion
Condominium Association
Civil Code of Ukraine
Central Energy Service Company
"ESCO-Centre" (Kyiv)
centralized heat
combined heat and power
Cabinet of Ministries of Ukraine
Cubic meter
district heating
district heating substation
Dutch International Guarantees for
Housing
Energy Alliance
Economic Code of Ukraine
energy efficiency
East Europe Foundation
Energy Saving International AS
Energy Performance
energy service company
European Union
European Ukrainian Energy Agency
Euro
Fuel and Energy Resources
Gigacalorie
gross domestic product
Global Environment Fund
Deutsche Gesellschaft für Internationale
Zusammenarbeit (German Company for
International Cooperation)
Deutsche Gesellschaft für Technische
Zusammenarbeit (German Company for
Technical Cooperation)
gigawatt hour
Housing and Construction Cooperative
Housing Code of Ukraine
Housing and Communal Economy
Housing and Communal Services
individual heating substation
hot water supply
Housing Institute (Bratislava)
International Energy Agency
International Financial Institution
Inter Municipal Cooperation
ISO
PDC
PLC
PPA
International Organization for
Standardization
joint stock company
kilowatt-hour
loan in process
limited liability company
limited
Program of Social Reforms in Central
and Eastern Europe (MATRA) of the
Dutch Ministry of Foreign Affairs
Municipal Development Institute
North metallurgical enrichment plant
Ministry of Housing and Communal
Economy
million
megapascals
Ministry of Regional Development,
Construction and Housing and
Communal Economy
million tonnes of oil equivalent
millivolt
medium voltage
megawatt
megawatt-hour
North Atlantic Treaty Organization
National Electricity Regulatory
Commission of Ukraine
Newly Independent States
Netherlands
normal cubic meter
oxides of nitrogen
net pressure suction head
net present value
Norway – Ukraine Chamber of
Commerce
multi family building co-owners
association
power distribution centre
Programmable Logic Control
power purchase agreement
PVC
RGS
RO/EDI
ROI
RTD
SCADA
SCR
polyvinyl chloride (conduit or piping)
rigid galvanized steel
reverse osmosis / electro deionization
return on investment
rigid temperature detector
supervisory control and data acquisition
selective catalytic reduction (for NOx)
JSC
kWh
LIP
LLC
Ltd
MATRA
MDI
MEC
MHCE
mln
MPa
MRCHCE
M.toe
mV
MV
MW
MWh
NATO
NERC
NIS
NL
NM3
NOx
NPSH
NPV
NUCC
OSBB
108
SDW
SEE
SI
SMP
SPB
sq. m
solid domestic waste
Southeast Europe
Strategic Investor
steam and water analysis system
simple payback
square meter
tce
tons of coal equivalent
(1 ton of c.e. = 7000 kcal/kg or 29.3 MJ)
tons CO2
total final consumption
tons of oil equivalent (1 toe=1,43 tce)
temperature regulating valve
Ukrainian Hryvnia
uninterruptable power supply
tCO2
TFC
Toe
TRV
UAH
UPS
US, U.S.
USAID
USD, US$
UNDP
UT
V
VFD
VSD
WAN
y, yr
ZheKs
United States
United States Agency for International
Development
the United States Dollar
United Nations Development Program
unit transformer
voltage
variable frequency drive
variable speed drive
wide area network
year
Housing and Communal Services
Maintenance Companies/or Housing
Maintenance Company
109
Annex 2: English - Ukrainian Legal Terminology
Association of house owners – a legal
entity that is formed for representing joint
interests of the condominium associations.
Асоціація власників жилих будинків юридична особа, створена для
представлення спільних інтересів об'єднань;
A housing complex - a uniform real estate
complex formed by a plot of land within set
limits, a residential apartment house located
on it or its part together with constructions
and engineering networks forming an integral
property complex;
Житловий комплекс - єдиний комплекс
нерухомого майна, що утворений
земельною ділянкою в установлених межах,
розміщеним на ній жилим багатоквартирним
будинком або його частиною разом із
спорудами та інженерними мережами, які
утворюють цілісний майновий комплекс;
Ajacent territory – territory around multiapartment building that is defined by state act
for owning or using of land parcel and aimed
at maintanence of multi-apartment building;
Прибудинкова територія - територія
навколо багатоквартирного будинку,
визначена актом на право власності чи
користування земельною ділянкою і
призначена для обслуговування
багатоквартирного будинку;
Authorised person of the owner – physical
or legal entity, which has formal authorization
of the owner to represent his interests
according to his instructions within the scope
as defined by the law
Уповноважена особа власника - фізична
або юридична особа, яка має оформлене у
встановленому порядку доручення власника
представляти його інтереси відповідно до
доручення та в межах, визначених законом;
Auxiliary premises – premises, which are
used for ensuring maintenance of the house
and communal service provision of the
residents of the building (staircases,
hallways, corridors, stroller places, garbage
shoots, chimneys, cellars, closets, storage
rooms, lift shoots and machine
compartments, ventilation cameras, and
other technical premises);
Допоміжні приміщення
багатоквартирного будинку приміщення, призначені для забезпечення
експлуатації будинку та побутового
обслуговування мешканців будинку (сходові
клітини, вестибюлі, перехідні шлюзи,
позаквартирні коридори, колясочні, кладові,
сміттєкамери, горища, підвали, шахти і
машинні відділення ліфтів, вентиляційні
камери та інші технічні приміщення);
Centralised cold and hot water supply - a
service which is aimed at satisfying needs of
the customer in cold and hot water, which is
provided by the provider who uses interbuilding systems of hot and cold water
supply;
Централізоване постачання холодної
та гарячої води - послуга, спрямована на
задоволення потреб споживача у холодній
та гарячій воді, яка надається виконавцем з
використанням внутрішньобудинкових
систем холодного та гарячого
водопостачання;
110
Centralised heating - a service which is
aimed at satisfying needs of the customer in
maintaining normative temperature in the flat
premises (in the cottage type building), which
is provided by the provider who uses interbuilding heating systems;
Централізоване опалення - послуга,
спрямована на задоволення потреб
споживача у забезпеченні нормативної
температури повітря у приміщеннях
квартири (будинку садибного типу), яка
надається виконавцем з використанням
внутрішньобудинкових систем
теплопостачання;
Centralised wastewater collection– a
service which is aimed at satisfying needs of
the customer in wastewater collection, which
is provided by the provider who uses interbuilding sewage networks;
Централізоване водовідведення послуга, спрямована на задоволення
потреб споживача у відведенні стічних вод,
яка надається виконавцем з використанням
внутрішньобудинкових централізованих
систем водовідведення;
Communal services - the result of economic
activity aimed at satisfaction of individual’s or
legal entity’s needs in provision of cold and
hot water, sewage services, gas and energy
supply, heating and household waste
transportation in accordance with legislation;
Комунальні послуги - результат
господарської діяльності, спрямованої на
задоволення потреби фізичної чи юридичної
особи у забезпеченні холодною та гарячою
водою, водовідведенням, газо- та
електропостачанням, опаленням, а також
вивезення побутових відходів у порядку,
встановленому законодавством;
Condominium association - a legal entity
created by owners for assistance of their
ownership usage and management,
maintenance and use of indivisible and joint
property;
Об’єднання співвласників
багатоквартирного будинку (ОСББ) юридична особа, створена власниками для
сприяння використанню їхнього власного
майна та управління, утримання і
використання неподільного та загального
майна;
Consumer – individual or legal entity who
uses or intends to use housing and
communal servises;
Споживач - фізична чи юридична особа,
яка отримує або має намір отримати
житлово-комунальну послугу;
Heating area (volume) of the building –
total area (volume) of the building premises,
including in case of heating – the area
(volume) of the stairs, lifts’ and other shafts.
Опалювана площа (об'єм) будинку загальна площа (об'єм) приміщень будинку,
в тому числі у разі опалення площа (об'єм)
сходових кліток, ліфтових та інших шахт;
Heating area (volume) of the flat (building
of the cottage type) – total area (volume) of
the flat, and of the cottage type building
without accounting the area of the terraces,
balconies, loggia;
Опалювана площа (об'єм) квартири
(будинку садибного типу) - загальна
площа (об'єм) квартири, а також будинку
садибного типу без урахування площі
лоджій, балконів, терас;
111
Housing and communal services - the
result of economic activity aimed at providing
for conditions of persons' residence and stay
in residential and non-residential premises,
houses and buildings, complexes of houses
and buildings, in accordance with norms,
regulations, standards, procedures and rules.
Житлово-комунальні послуги - результат
господарської діяльності, спрямованої на
забезпечення умов проживання та
перебування осіб у жилих і нежилих
приміщеннях, будинках і спорудах,
комплексах будинків і споруд відповідно до
нормативів, норм, стандартів, порядків і
правил;
Housing stock – residential houses and
residential premises in anjther buildings
located on territory of Ukraine;
Житловий фонд - жилі будинки, а також
жилі приміщення в інших будівлях, що
знаходяться на території України;
Indivisible property – indivisible part of the
housing complex which is comprised of the
part auxiliary premises, structural elements of
the building, technical equipment of the
building which ensure proper functioning of
the housing building;
Неподільне майно - неподільна частина
житлового комплексу, яка складається з
частини допоміжних приміщень,
конструктивних елементів будинку,
технічного обладнання будинку, що
забезпечують належне функціонування
жилого будинку;
Joint property – part of auxiliary premises of
the housing complex, which can be used
according to their purpose and at terms, that
are defined in the charter of the
condominium association (storages, garages,
including underground ones, workshops,
etc.)
Загальне майно - частина допоміжних
приміщень житлового комплексу, що можуть
використовуватися згідно з їх призначенням
на умовах, визначених у статуті об'єднання
(кладові, гаражі, в тому числі підземні,
майстерні тощо);
Joint property – property that is owned by
tow or more persons (co-owners);
Спільне майно - майно, що є у власності
двох або більше осіб (співвласників);
Maintanance of housing and ajacent
territory - economic activity aimed at
satisfaction of individual’s and legal entity’s
needs in provision of maintenace and/or
repair of residential and non-residential
premises, houses, buildings, housing
complexes or complexes of houses and
buildings and adjacent territory maintenance
according to normative, norm, standards and
rules set by legislation;
Утримання будинків і прибудинкових
територій - господарська діяльність,
спрямована на задоволення потреби
фізичної чи юридичної особи щодо
забезпечення експлуатації та/або ремонту
жилих та нежилих приміщень, будинків і
споруд, комплексів будинків і споруд, а
також утримання прилеглої до них
(прибудинкової) території відповідно до
вимог нормативів, норм, стандартів,
порядків і правил згідно із законодавством;
Manager – legal entity which manages
indivisible and whole property of the housing
complex under authority of the owner
0owners) of the property and ensures its
reliable maintenance; (as defined by the Law
of Ukraine “On housing and Communal
Управитель - юридична особа, яка
здійснює управління неподільним та
загальним майном житлового комплексу за
дорученням власника (власників) майна і
забезпечує його належну експлуатацію; (у
визначенні закону України «Про житлово-
112
services”)
комунальні послуги»);
Manager – person who according to the
agreement with owner or the balance sheet
holder performs management of house,
building, housing complexes or complexes of
houses and buildings and provides its proper
usage according to Law and terms of
agreement; (as defined by the Law of
Ukraine “On CAs”)
Управитель - особа, яка за договором з
власником чи балансоутримувачем
здійснює управління будинком, спорудою,
житловим комплексом або комплексом
будинків і споруд (далі - управління
будинком) і забезпечує його належну
експлуатацію відповідно до закону та умов
договору; (у визначенні закону України
«Про ОСББ»);
Non residential premise- a premise, which
belongs to the residential complex, but is not
a part of the housing stock and is an
independent object of civil and legal relations
Нежиле приміщення - приміщення, яке
належить до житлового комплексу, але не
відноситься до житлового фонду і є
самостійним об'єктом цивільно-правових
відносин;
Norms of consumption - quantitative
indicators of housing and communal
consumption approved by executive
authorities and local self-government bodies
according to legislation;
Норми споживання - кількісні показники
споживання житлово-комунальних послуг,
затверджені згідно із законодавством
відповідними органами виконавчої влади та
органами місцевого самоврядування;
Producer – economic entity who produces or
creates housing and communal services;
Виробник - суб'єкт господарювання, який
виробляє або створює житлово-комунальні
послуги;
Provider - economic entity who provides
consumer with housing and communal
services according to terms of agreement;
Виконавець - суб'єкт господарювання,
предметом діяльності якого є надання
житлово-комунальної послуги споживачу
відповідно до умов договору;
Qualitative service indicator – the unit of
measurement for estimating qualitative
indicators of consumed by customers
service, that is defined according to the law;
Кількісний показник послуг - одиниця
виміру для обчислення кількісних показників
отриманої споживачем послуги, визначена
відповідно до законодавства;
Structural elements of multi-apartment
building – parts of the facility, which provide
for its unity and necessary technical
conditions of functioning (basement, carrying
construction walls, floors, flights of stairs,
constructions of the roof, entrances, etc.)
Конструктивні елементи
багатоквартирного будинку - частини
споруди, які забезпечують її цілісність та
необхідні технічні умови функціонування
(фундамент, несучі стіни, міжповерхові
перекриття, сходові марші, конструкції даху,
покрівля, в'їзна група тощо);
113
Tariffs for heat energy – money value of
expenditures for production, transportation
(including costs of transporting via networks,
which belong to other customers, to the
boarder of property differentiation of the
networks), and supply of 1 Gcal of heat
energy and accounting for investment and
other components, which are defined by the
methodologies that are defined by Minbud;
Тарифи на теплову енергію - грошовий
вираз витрат на виробництво,
транспортування, постачання одиниці
теплової енергії (1 Гкал) з урахуванням
рентабельності виробництва, інвестиційної
та інших складових, що визначаються згідно
із методиками, розробленими Мінбудом.
Tariffs for heating services – cost of
providing a unit of centralised heating service
of the respective quality, that is estimated
based on economically justified planned
costs and accounting for planned profit and
VAT;
Тарифи на надання послуг з
централізованого опалення - вартість
надання одиниці послуги з централізованого
опалення відповідної якості, розрахована на
основі економічно обґрунтованих
планованих витрат з урахуванням
планованого прибутку та податку на додану
вартість;
Tariffs for hot water supply services – cost
of providing a unit of centralised hot water
supply service of the respective quantity and
quality, that is estimated based on
economically justified planned costs and
accounting for planned profit and VAT;
Тарифи на надання послуг з
централізованого постачання гарячої
води - вартість надання одиниці послуги з
централізованого постачання гарячої води
визначеної кількості та відповідної якості,
розрахована на основі економічно
обґрунтованих планованих витрат з
урахуванням планованого прибутку та
податку на додану вартість;
The balance sheet holder of a house,
building, housing complex or complex of
houses and buildings - is the owner or the
legal entity that based on an agreement with
the owner holds the respective property on
its balance sheet, as well as keeps
accounting, statistical and other reporting in
accordance with legislation, carries out
calculation of funds necessary for timely
realization of major and maintenance repairs
and maintenance, as well as provides for this
property management and is responsible for
its operation under the law;
Балансоутримувач будинку, споруди,
житлового комплексу або комплексу
будинків і споруд (далі балансоутримувач) - власник або
юридична особа, яка за договором з
власником утримує на балансі відповідне
майно, а також веде бухгалтерську,
статистичну та іншу передбачену
законодавством звітність, здійснює
розрахунки коштів, необхідних для
своєчасного проведення капітального і
поточного ремонтів та утримання, а також
забезпечує управління цим майном і несе
відповідальність за його експлуатацію згідно
з законом;
114
The owner of an apartment, house,
building, housing complex or complex of
houses and buildings - an individual or a
legal entity having the right to own, use and
dispose of an apartment, house, building,
housing complex or complex of houses and
buildings registered in accordance with the
procedure set by the law;
Власник приміщення, будинку, споруди,
житлового комплексу або комплексу
будинків і споруд - фізична або юридична
особа, якій належить право володіння,
користування та розпоряджання
приміщенням, будинком, спорудою,
житловим комплексом або комплексом
будинків і споруд, зареєстроване у
встановленому законом порядку;
Two-tier tariff – tariff for production,
transportation, supply of heating energy and
heating and hot water supply services, which
is comprised of an annual customer fee (cost
of maintain a unit of heating capacity of the
heating consumption object), which
compensates fixed part of tariff, and cost of
the unit of the heat energy sold, heating and
hot water supply services, which
compensates variable part of tariff;
Двоставковий тариф - тариф на
виробництво, транспортування, постачання
теплової енергії та послуги з
централізованого опалення і постачання
гарячої води, який складається з річної
абонентської плати (вартості
обслуговування одиниці теплового
навантаження об'єкта теплоспоживання),
яка компенсує умовно-постійну частину
тарифу, та вартості одиниці реалізованої
теплової енергії, послуг з централізованого
опалення і постачання гарячої води, яка
компенсує умовно-змінну частину тарифу;
Unified tariff – cost of the unit of the service
sold which is defined as one rate and does
not break into variable and fixed parts;
Одноставковий тариф - вартість одиниці
реалізованої послуги, яка визначена однією
ставкою і не розподіляється на умовнозмінну та умовно-постійну частини;
115
Annex 3: References
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Housing Stock of Ukraine in 2008. Statistical Bulletin. – The State Statistics
Committee of Ukraine. – Kyiv, 2009.
Statistical Bulletin on Key Indicators of Heating Boilers and Thermal Networks
Operation in Ukraine in 2009. – The State Statistics Committee of Ukraine. – Kyiv,
2010.
2009.
2008.
2007.
2006.
2005.
2004.
2005.
2004.
2003.
116
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
2002.
2001.
2000.
1999.
1998.
Results of Using Boiler and Stove Fuel, Thermal Power and Electric Power in 2008.
- The State Statistics Committee of Ukraine. - Kyiv, 2009.
SCN V.2.2-15-2005 Houses and Buildings. Residential Houses. Substantive
Provisions ДБН В.2.2-15-2005 Будинки і споруди. Житлові будинки. Основні
положення
Sector Program for Increasing Energy Efficiency in Construction for 2010-2014.
The Ministry of Regional Development and Construction of Ukraine. Kyiv, 2009.
Statistical Data of the Ministry of Regional Development and Construction of
Ukraine. Kyiv, 2010.
DBN В.2.6-31:2006 “Constructions of Buildings and Structures. Thermal Insulation
of Buildings”.
DSTU-N B А.2.2-5:2007 “Designing. Guideline for development and making of
buildings energy passport for new construction and reconstruction.”
European Commission Report, 2008
117
Annex 4: Housing stock of urban and rural localities
As on As of 01.01.2009 (based on data of [1])
Number of
houses,
units
Total floor area
of residential
premises, m2
Residential
space of
residential
premises, m2
Number of
apartments,
units
Total floor
area of
apartments,
m2
10148947
1066633755
681066201
19254567
1045752011
669005101
AR of Crimea
333941
39980967
24421912
786136
39139553
23902508
Vinnytsia Oblast
568479
43789177
29883789
748231
43137364
29481808
Volyn Oblast
233254
21788273
13819436
351207
21402311
13584137
Dnipropetrovsk Oblast
611023
78719660
49354799
1506662
76974189
48368614
Donetsk Oblast
852752
100846268
64071311
1987664
98983551
63050377
Zhytomyr Oblast
381158
33028542
21416738
591706
32552642
21141836
Zakarpattia Oblast
310202
27754400
16399794
383600
27522017
16261263
Zaporizhia Oblast
351272
40644176
25278839
758749
39484108
24613203
Ivano-Frankivsk Oblast
344002
31604619
19926601
483394
31168657
19669044
Kyiv Oblast
536764
52728288
33271446
828843
52035447
32853189
Kirovograd Oblast
313406
24665313
16210907
488952
24191640
15915218
Lugansk Oblast
517174
55429154
34542403
1083927
54492416
34000398
Lviv Oblast
457041
52866855
33287427
865997
51707446
32644219
Mykolaiv Oblast
266341
25912590
17109021
486958
25331167
16763212
Odesa Oblast
485788
53099344
35474887
937679
52001927
34813249
Poltava Oblast
422460
36950868
23791598
711154
36210441
23355267
Rivne Oblast
263302
24073153
15938068
389026
23575975
15629102
Sumy Oblast
328303
27694092
18399060
536794
27117180
18069259
Ternopil Oblast
286347
24791410
16137905
388378
24334560
15873616
Kharkiv Oblast
488307
62847569
40314824
1215282
61347494
39504361
Kherson Oblast
284515
24876666
16411662
449718
24358630
16108491
Khmelnytsky Oblast
380347
32827726
21891230
568350
32155713
21491859
Cherkasy Oblast
428148
33999371
22587857
626742
33348477
22211820
Chernivtsi Oblast
248061
20020952
12615696
323260
19761989
12465238
Chernigiv Oblast
391828
29581455
19270230
560773
29184553
19037372
Kyiv City
34063
57954500
34001152
1020182
56291254
33087443
Sevastopol City
30669
8158367
5237606
175203
7941310
5108998
Ukraine
Residential
space of
apartments,
m2
118
Annex 5: Housing stock of urban settlements
as on 01.01.2009 (based on data of [1])
Number
of
houses,
units
Ukraine
Total floor
area of
residential
premises, m2
Residential
space of
residential
premises, m2
Number of
apartments,
units
Total floor
area of
apartments,
m2
Residential
space of
apartments,
m2
4039333
684276025
424246794
12842983
665381955
413457397
AR of Crimea
125070
26965466
16106611
531102
26354335
15734672
Vinnytsia Oblast
127637
16173801
10442562
297629
15664910
10135995
56417
9887043
6012978
170132
9524632
5792894
360076
63772637
39662698
1237213
62127524
38743108
Donetsk Oblast
661953
90274769
57239429
1782989
88496459
56270733
Zhytomyr Oblast
111643
16410343
10131948
310728
15999682
9896778
Zakarpattia Oblast
80355
9715322
5442665
150245
9499402
5314125
Zaporizhia Oblast
166730
29633893
18123878
561829
28561423
17510291
72854
12635216
7804725
206310
12220473
7560568
Kyiv Oblast
163376
26590960
16139995
425115
26012022
15796262
Kirovograd Oblast
123439
14100437
8749800
291091
13685761
8494150
Lugansk Oblast
375550
47615392
29289782
930401
46729905
28778175
Lviv Oblast
115341
29041213
18060178
510082
27962622
17469230
Mykolaiv Oblast
110997
16961071
10955129
325154
16464517
10661988
Odesa Oblast
176118
33412937
21831172
614922
32420359
21248412
Poltava Oblast
129125
20045272
12320072
399032
19448828
11972192
Rivne Oblast
59488
10259934
6256081
178445
9805140
5974510
Sumy Oblast
133064
16967767
10761401
333597
16455053
10471127
Ternopil Oblast
57387
9940993
5985011
156080
9515561
5740461
Kharkiv Oblast
256876
49231896
31069790
958739
47838075
30325465
Kherson Oblast
128943
15349480
9760568
285495
14921521
9516941
85197
14826062
9321071
268051
14223387
8964773
Cherkasy Oblast
122700
16047464
10054026
313034
15483808
9731083
Chernivtsi Oblast
53708
7636490
4479362
127171
7402882
4344752
Chernigiv Oblast
125580
14996202
9207357
289013
14658992
9011988
Kyiv City
34063
57954500
34001152
1020182
56291254
33087443
Sevastopol City
25646
7829465
5037353
169202
7613428
4909281
Volyn Oblast
Khmelnytsky Oblast
119
Annex 6: Housing stock of rural localities
as on 01.01.2009 (based on data of [1])
Number
of
houses,
units
Ukraine
Total floor area
of residential
premises, m2
Residential
space of
residential
premises, m2
Number of
apartments,
units
Total floor
area of
apartments,
m2
Residential
space of
apartments,
m2
6109614
382357730
256819407
6411584
380370056
255547704
AR of Crimea
208871
13015501
8315304
255034
12785218
8167836
Vinnytsia Oblast
440842
27615376
19441227
450602
27472454
19345813
Volyn Oblast
176837
11901230
7806458
181075
11877679
7791243
250947
14947023
9692101
269449
14846665
9625506
Donetsk Oblast
190799
10571499
6831882
204675
10487092
6779644
Zhytomyr Oblast
269515
16618199
11284790
280978
16552960
11245058
Zakarpattia Oblast
229847
18039078
10957129
233355
18022615
10947138
Zaporizhia Oblast
184542
11010283
7154961
196920
10922685
7102912
271148
18969403
12121876
277084
18948184
12108476
Kyiv Oblast
373388
26137328
17131451
403728
26023425
17056927
Kirovograd Oblast
189967
10564876
7461107
197861
10505879
7421068
Lugansk Oblast
141624
7813762
5252621
153526
7762511
5222223
Lviv Oblast
341700
23825642
15227249
355915
23744824
15174989
Mykolaiv Oblast
155344
8951519
6153892
161804
8866650
6101224
Odesa Oblast
309670
19686407
13643715
322757
19581568
13564837
Poltava Oblast
293335
16905596
11471526
312122
16761613
11383075
Rivne Oblast
203814
13813219
9681987
210581
13770835
9654592
Sumy Oblast
195239
10726325
7637659
203197
10662127
7598132
Ternopil Oblast
228960
14850417
10152894
232298
14818999
10133155
Kharkiv Oblast
231431
13615673
9245034
256543
13509419
9178896
Kherson Oblast
155572
9527186
6651094
164223
9437109
6591550
Khmelnytsky Oblast
295150
18001664
12570159
300299
17932326
12527086
Cherkasy Oblast
305448
17951907
12533831
313708
17864669
12480737
Chernivtsi Oblast
194353
12384462
8136334
196089
12359107
8120486
Chernigiv Oblast
266248
14585253
10062873
271760
14525561
10025384
5023
328902
200253
6001
327882
199717
Sevastopol City
120
Annex 7: Growth of the total floor area of the housing
stock in Ukraine
General housing fund development in Ukraine, Total Urban and Rural
mil. sq.m.
1100
1050
1000
950
900
850
800
1991
1993
1995
1997
1999 2001 2003 2005
as of 01.01 of each year
2007
2009
2007
2009
2007
2009
General housing fund development in Ukraine, Urban Areas
mil. sq.m.
700
680
660
640
620
600
580
560
540
520
500
1991 1993
1995
1997
1999 2001 2003 2005
General housing fund development in Ukraine, Rural locations
mil. sq.m.
390
380
370
360
350
340
330
1991
1993
1995
1997
1999 2001 2003 2005
Source: [1-10]
Note: No reporting as of the beginning of 2000 was issued
121
Annex 8: Structure of housing stock in urban and rural area by form of ownership
Number of
houses,
units
Ukraine
AR of Crimea
Vinnytsia Oblast
Volyn Oblast
Donetsk Oblast
Zhytomyr Oblast
Zakarpattia Oblast
Zaporizhia Oblast
Kyiv Oblast
Kirovograd Oblast
Lugansk Oblast
Lviv Oblast
Mykolaiv Oblast
Odesa Oblast
Poltava Oblast
Rivne Oblast
Sumy Oblast
Ternopil Oblast
Kharkiv Oblast
Kherson Oblast
Khmelnytsky Oblast
Cherkasy Oblast
Chernivtsi Oblast
Chernigiv Oblast
Kyiv City
Sevastopol City
10139128
332339
568042
233197
610829
851835
380669
310182
350575
343963
536577
313248
516902
456687
266258
485709
421068
263157
327847
286248
487502
283700
380020
428000
248046
391799
34060
30669
Out of them, units
state
communal
private
property
property
property
22392
1507
1128
256
1186
1622
898
211
779
245
1124
342
3145
981
726
817
1360
387
569
211
1353
791
387
527
310
730
584
216
238160
16936
3768
4487
19499
40137
11110
3282
9297
4288
6974
4259
18391
14981
6739
10155
6706
3314
5186
1792
14308
4121
4470
3911
4381
4869
8107
2692
9878576
313896
563146
228454
590144
810076
368661
306689
340499
339430
528479
308647
495366
440725
258793
474737
413002
259456
322092
284245
471841
278788
375163
423562
243355
386200
25369
27761
Total floor
area, m2
1064966652
39816972
43726428
21778193
78667807
100742305
32969474
27739563
40577866
31593777
52591843
24626800
55266923
52681593
25904691
53081944
36784846
24031433
27620476
24780099
62764102
24809750
32783865
33978328
20016210
29573989
57899008
8158367
state
property
16123830
528064
707871
190888
1241322
1101965
406098
153541
542192
276769
584552
248795
816386
1096556
390812
1341675
634384
385904
433128
276316
1276307
609752
364120
398915
225052
432007
1343111
117348
Out of them, m2
communal
property
67510716
4523375
1404437
849106
7135968
10961572
1425074
553110
2521637
762095
2505856
844562
4981942
2389573
1806541
4486902
1769114
674620
1343481
453715
4160459
844044
1082898
999335
420351
1397585
6368432
844932
private
property
981332106
34765533
41614120
20738199
70290517
88678768
31138302
27032912
37514037
30554913
49501435
23533443
49468595
49195464
23707338
47253367
34381348
22970909
25843867
24050068
57327336
23355954
31336847
32580078
19370807
27744397
50187465
7196087
122
Residential
space, m2
680005898
24316361
29842068
13812674
49326604
64004548
21377615
16389975
25235948
19919668
33193175
16186852
34425030
33162236
17103764
35463195
23682732
15912882
18350819
16130196
40257529
16363112
21863100
22573788
12612433
19265577
33996411
5237606
Out of them, m2
state
communal
property
property
9212962
306765
411308
109117
696387
613048
246327
90025
305723
159979
338013
154185
488883
612268
232345
749272
374898
234949
250052
160760
697307
359008
205949
226347
127682
255218
735090
72057
42179966
2887082
913454
508659
4477164
6922558
863091
338538
1548281
489759
1549455
527312
3163349
1548800
1124694
2813551
1068430
423260
831202
271079
2716865
547003
664312
622101
256066
892117
3713741
498043
private
property
628612970
21122514
28517306
13194898
44153053
56468942
20268197
15961412
23381944
19269930
31305707
15505355
30772798
31001168
15746725
31900372
22239404
15254673
17269565
15698357
36843357
15457101
20992839
21725340
12228685
18118242
29547580
4667506
Annex 9: Structure of housing stock in urban areas by form of ownership
Number of
houses,
units
Ukraine
AR of Crimea
Vinnytsia Oblast
Volyn Oblast
Donetsk Oblast
Zhytomyr Oblast
Zakarpattia Oblast
Zaporizhia Oblast
Kyiv Oblast
Kirovograd Oblast
Lugansk Oblast
Lviv Oblast
Mykolaiv Oblast
Odesa Oblast
Poltava Oblast
Rivne Oblast
Sumy Oblast
Ternopil Oblast
Kharkiv Oblast
Kherson Oblast
Khmelnytsky Oblast
Cherkasy Oblast
Chernivtsi Oblast
Chernigiv Oblast
Kyiv City
Sevastopol City
4036939
124965
127572
56388
359979
661586
111586
80348
166620
72819
163302
123384
375362
115123
110988
176099
128926
59449
132930
57383
256634
128782
85100
122648
53703
125557
34060
25646
Out of them, units
state
property
14151
776
645
143
671
1328
450
95
377
223
502
155
2906
713
287
542
534
250
326
130
763
589
262
254
162
293
584
191
communal
property
private
property
204276
11630
3232
4146
18027
38045
5699
3016
7692
4087
4916
3659
17595
14267
6041
9540
5472
2669
4141
1646
11578
1324
3926
3367
4180
3668
8107
2606
3818512
112559
123695
52099
341281
622213
105437
77237
158551
68509
157884
119570
354861
100143
104660
166017
122920
56530
128463
55607
244293
126869
80912
119027
49361
121596
25369
22849
Total floor
area, m2
683391577
26921588
16155383
9880384
63736233
90227146
16392148
9706107
29613525
12625096
26481011
14079582
47461229
28891040
16960464
33404730
20012755
10243156
16926810
9937757
49204917
15334739
14808676
16034680
7634652
14989296
57899008
7829465
Out of them, m2
state
property
14166697
440215
561483
172299
1117483
1050074
322370
126552
485687
264175
427652
195248
755126
967109
312074
1163752
485017
343354
381804
248831
1174453
561907
320746
300965
195136
334879
1343111
115195
communal
property
62406628
3789500
1249105
802436
6824988
10615470
999097
421841
2307300
726080
2150569
743557
4857608
2217103
1617021
4220378
1555694
573438
1239283
423573
3800404
576296
991159
885190
375379
1273191
6368432
802536
state property
606818252
22691873
14344795
8905649
55793762
78561602
15070681
9157714
26820538
11634841
23902790
13140777
41848495
25706828
15031369
28020600
17972044
9326364
15305723
9265353
44230060
14196536
13496771
14848525
7064137
13381226
50187465
6911734
123
Residential
space, m2
communal
property
423706922
16079631
10430869
6008689
39644002
57208777
10120179
5435831
18110707
7798345
16078697
8736776
29178192
17958036
10954711
21825316
12300218
6246302
10734778
5982729
31052291
9750732
9309986
10045910
4478298
9203156
33996411
5237606
Out of them, m2
private
property
7998821
252303
325357
98056
614265
580871
194201
73595
271342
151375
243379
118594
452474
523812
182861
647875
282326
208126
217836
142896
632224
330549
178751
167134
108311
194506
735090
72057
communal
property
38977389
2426347
810524
479107
4276070
6710856
612540
257997
1416036
467967
1335970
460130
3084967
1442650
1005425
2641872
937207
358741
762981
252961
2483062
368451
607742
549139
227634
812939
3713741
498043
state property
376730712
13400981
9294988
5431526
34753667
49917050
9313438
5104239
16423329
7179003
14499348
8158052
25640751
15991574
9766425
18535569
11080685
5679435
9753961
5586872
27937005
9051732
8523493
9329637
4142353
8195711
29547580
4667506
Annex 10: Structure of housing stock in rural areas by form of ownership
Number of
houses,
units
Ukraine
AR of Crimea
Vinnytsia Oblast
Volyn Oblast
Donetsk Oblast
Zhytomyr Oblast
Zakarpattia Oblast
Zaporizhia Oblast
Kyiv Oblast
Kirovograd Oblast
Lugansk Oblast
Lviv Oblast
Mykolaiv Oblast
Odesa Oblast
Poltava Oblast
Rivne Oblast
Sumy Oblast
Ternopil Oblast
Kharkiv Oblast
Kherson Oblast
Khmelnytsky Oblast
Cherkasy Oblast
Chernivtsi Oblast
Chernigiv Oblast
Sevastopol City
6102189
207374
440470
176809
250850
190249
269083
229834
183955
271144
373275
189864
141540
341564
155270
309610
292142
203708
194917
228865
230868
154918
294920
305352
194343
266242
5023
Out of them, units
state
property
8241
731
483
113
515
294
448
116
402
22
622
187
239
268
439
275
826
137
243
81
590
202
125
273
148
437
25
communal
property
33884
5306
536
341
1472
2092
5411
266
1605
201
2058
600
796
714
698
615
1234
645
1045
146
2730
2797
544
544
201
1201
86
private
property
6060064
201337
439451
176355
248863
187863
263224
229452
181948
270921
370595
189077
140505
340582
154133
308720
290082
202926
193629
228638
227548
151919
294251
304535
193994
264604
4912
Total floor
area, m2
381575075
12895384
27571045
11897809
14931574
10515159
16577326
18033456
10964341
18968681
26110832
10547218
7805694
23790553
8944227
19677214
16772091
13788277
10693666
14842342
13559185
9475011
17975189
17943648
12381558
14584693
328902
Out of them, m2
state
property
1957133
87849
146388
18589
123839
51891
83728
26989
56505
12594
156900
53547
61260
129447
78738
177923
149367
42550
51324
27485
101854
47845
43374
97950
29916
97128
2153
communal
property
5104088
733875
155332
46670
310980
346102
425977
131269
214337
36015
355287
101005
124334
172470
189520
266524
213420
101182
104198
30142
360055
267748
91739
114145
44972
124394
42396
state property
374513854
12073660
27269325
11832550
14496755
10117166
16067621
17875198
10693499
18920072
25598645
10392666
7620100
23488636
8675969
19232767
16409304
13644545
10538144
14784715
13097276
9159418
17840076
17731553
12306670
14363171
284353
124
Residential
space, m2
communal
property
256298976
8236730
19411199
7803985
9682602
6795771
11257436
10954144
7125241
12121323
17114478
7450076
5246838
15204200
6149053
13637879
11382514
9666580
7616041
10147467
9205238
6612380
12553114
12527878
8134135
10062421
200253
Out of them, m2
private
property
1214141
54462
85951
11061
82122
32177
52126
16430
34381
8604
94634
35591
36409
88456
49484
101397
92572
26823
32216
17864
65083
28459
27198
59213
19371
60712
1345
communal
property
3202577
460735
102930
29552
201094
211702
250551
80541
132245
21792
213485
67182
78382
106150
119269
171679
131223
64519
68221
18118
233803
178552
56570
72962
28432
79178
23710
state
property
251882258
7721533
19222318
7763372
9399386
6551892
10954759
10857173
6958615
12090927
16806359
7347303
5132047
15009594
5980300
13364803
11158719
9575238
7515604
10111485
8906352
6405369
12469346
12395703
8086332
9922531
175198
Annex 11: Distribution of residential houses by year of construction (as of 2001)
Total houses, %
before 1919
1919-1945
1946-1960
incl. those built:
1961-1970
1971-1980
1987-1990
Ukraine
100
5.4
12.9
26.4
24.2
16.1
10.3
4.7
AR of Crimea
100
6.3
8.6
21.5
28.1
18.5
11.7
5.3
Vinnytsia Oblast
100
7.8
14.4
25.6
24.1
14.9
8.6
4.5
Volyn Oblast
100
1.6
11.0
28.0
24.6
18.1
11.4
5.3
100
5.3
12.4
28.6
25.0
14.7
9.5
4.5
Donetsk Oblast
100
3.6
14.7
27.3
23.7
16.4
10.4
3.9
Zhytomyr Oblast
100
4.5
14.0
26.5
24.0
15.8
9.8
5.3
Zakarpattia Oblast
100
3.2
11.6
22.4
21.7
18.6
14.9
7.7
Zaporizhia Oblast
100
7.2
14.9
29.2
22.5
14.0
9.0
3.2
100
6.8
14.4
20.5
20.6
17.9
13.4
6.4
Kyiv Oblast
100
2.1
9.7
24.5
25.5
17.7
13.8
6.6
Kirovograd Oblast
100
15.1
15.1
23.0
20.3
14.1
8.6
3.8
Lugansk Oblast
100
3.0
11.8
34.0
26.7
13.9
7.9
2.6
Lviv Oblast
100
5.8
17.2
23.8
21.6
16.0
10.6
4.9
Mykolaiv Oblast
Odesa Oblast
100
100
10.7
10.6
11.7
17.0
27.4
23.8
22.5
21.9
15.8
14.7
8.5
8.4
3.4
3.6
Poltava Oblast
100
4.2
13.3
27.4
22.9
15.1
11.0
6.1
Rivne Oblast
100
2.0
12.7
25.8
22.4
18.8
12.5
5.7
Sumy Oblast
100
4.7
12.8
23.4
25.3
16.5
12.0
5.3
Ternopil Oblast
100
3.6
13.7
22.3
26.8
19.1
10.6
4.0
Kharkiv Oblast
100
5.1
11.4
30.2
23.4
15.8
10.0
4.2
Kherson Oblast
100
4.9
9.3
25.1
27.6
17.7
10.4
4.9
Khmelnytsky Oblast
100
4.4
12.8
25.9
27.4
16.5
9.3
3.8
Cherkasy Oblast
100
3.2
9.0
32.1
27.4
15.4
8.9
3.9
Chernivtsi Oblast
100
6.4
15.7
20.1
20.5
17.6
12.9
6.9
Chernigiv Oblast
100
3.2
12.2
30.5
26.6
15.8
8.2
3.4
Kyiv City
100
11.0
8.8
23.5
25.4
13.8
10.0
7.5
Sevastopol City
100
1.7
3.5
16.3
24.6
21.8
18.4
13.8
125
1991 and later
Annex 12: Volumes of housing built by regions in 2009
Launched during
2009
Ukraine
AR of Crimea
Vinnytsia
Volyn
Dnipropetrovsk
Donetsk
Zhytomyr
Zakarpattia
Zaporyzhia
Ivano-Frankivsk
Kyiv
Kirovograd
Lugansk
Lviv
Mykolaiv
Odesa
Poltava
Rivne
Sumy
Ternopil
Kharkiv
Kherson
Khmelnytsky
Cherkasy
Chernivtsi
Chernigiv
Kyiv City
Sevastopol City
thousand
m2 of the
Total
floor area
% to the
general
volume
6399.6
100.0
387.3
171.5
138.7
170.4
173.0
88.8
169.2
101.2
380.6
680.1
66.5
35.1
391.6
86.2
537.2
155.5
98.3
138.6
146.2
427.5
75.2
266.1
144.8
164.8
104.8
947.9
152.5
6.1
2.7
2.2
2.7
2.7
1.4
2.6
1.6
5.9
10.6
1.0
0.5
6.1
1.3
8.4
2.4
1.5
2.2
2.3
6.7
1.2
4.2
2.3
2.6
1.6
14.8
2.4
Growth (reduction) rates,
% compared to the previous year
reference:
2008
2009
61.0
102.5
93.2
47.4
71.1
38.9
39.6
35.9
43.0
46.6
73.7
58.4
51.8
14.1
50.2
53.6
63.4
59.5
56.9
69.7
48.0
192.0
32.7
86.3
88.7
45.2
51.5
66.3
184.9
79.6
91.4
108.4
103.8
118.0
112.1
111.9
98.6
113.4
135.9
106.6
96.2
116.6
105.1
106.8
93.9
68.0
107.5
100.1
41.4
122.8
99.6
79.9
119.6
109.2
102.1
82.3
Source [29]
126
Annex 13: Statistical data on construction activities in 2010
Activity
Construction
including
Preparation of construction sites
Construction of buildings and constructions
among which
General construction work
Construction of buildings
building of bridges, trestles, tunnels and the
underground
building of main pipelines, communication and power
networks
building of local pipelines, communication and power
networks
building of power, mining and processing enterprises
building of other constructions
assemblage and installation of mountable
constructions
Production of framework constructions and roofs
Building of roads, air fields and the surface of sports
constructions
Building of water constructions
Other construction work
Installation of engineering equipment of buildings and
constructions
Construction completion work
Lease of construction technique with an operator
Work volumes
in January,
2010, mln
UAH
% to
January,
total volume
2009
1478.0
75.9
100.0
122.4
1183.3
102.5
74.3
8.3
80.0
937.5
693.4
70.0
64.6
63.4
46.9
20.6
38.9
1.4
98.6
106.8
6.7
27.2
73.6
1.8
64.4
142.6
4.4
1.4
30.3
0.1
31.9
91.1
2.1
11.4
66.3
0.8
42.9
22.8
168.7
97.4
96.4
100.1
2.9
1.5
11.4
164.0
7.3
74.2
64.9
11.1
0.5
1.0
32.2
0.1
Source [29]
127
Annex 14: Heat production and supply by boiler house in urban and rural areas in 2008
Ukraine
AR of Crimea
Vinnytsia Oblast
Volyn Oblast
Donetsk Oblast
Zhytomyr Oblast
Zakarpattia Oblast
Zaporizhia Oblast
Kyiv Oblast
Kirovograd Oblast
Lugansk Oblast
Lviv Oblast
Mykolaiv Oblast
Odesa Oblast
Poltava Oblast
Rivne Oblast
Sumy Oblast
Ternopil Oblast
Kharkiv Oblast
Kherson Oblast
Khmelnytsky Oblast
Cherkasy Oblast
Chernivtsi Oblast
Chernigiv Oblast
Kyiv City
Sevastopol City
Thermal power
produced
during the
year, thousand
Gcal
Total thermal
power
supplied,
thousand
Gcal
Thermal power
supplied for
own
consumers,
thousand Gcal
104699.1
2864.9
2187.7
1399.1
9471.5
11289.7
1773
626.4
6012.8
1576.5
4108
1138.2
6586.4
4190.7
1748.3
4270.9
5108.8
1828.8
2410.2
987
9464.5
1059.3
2226.1
2416
532.6
2080.7
16359.3
981.7
96114.9
2661.5
1955.5
1526
8651.1
9772.9
1636.1
539.8
5776.1
1425.9
3444.9
1027.8
5855.7
3622
1840.9
4238
4893.5
1971.9
1993.2
925.2
10397.8
861.4
1880.3
2140.3
516.1
1741.4
13975.6
844
88987.9
2532.2
1944.2
1273.2
8357.8
9709.9
1622.6
537.7
5109.8
1171.3
3421.2
1021
5837.1
3615
1582.4
3754.6
3158.4
1673.8
1978.8
923.9
7960.3
859.9
1879.2
2012.7
515.4
1738.6
13952.9
844
residential
consumers,
thousand
Gcal
51818.6
1405.6
795
659.8
5064.3
6886.2
750.6
125.4
2713.2
504.6
1665.4
499.5
2109.1
1794.2
922.3
2081.5
1191.9
831.9
1105.7
464.6
5425.4
471.9
1158.3
1116.4
221
1001
10167.2
686.6
incl.
municipal
consumers,
thousand
Gcal
23634.2
1020
851.1
504.8
1925.6
2077.6
669.7
397.7
930
513.1
992.4
438
985.1
1118.2
497.6
913.5
671.9
574.1
499.7
344.6
1676.6
344.2
542.3
629.2
278.4
542
3540.3
156.5
industrial
consumers
, thousand
Gcal
13535.3
106.6
298.1
108.6
1367.9
746.1
202.4
14.7
1466.5
153.6
763.4
83.6
2742.8
702.5
162.5
759.6
1294.7
267.8
373.5
114.7
858.3
43.9
178.6
267.1
16
195.5
245.4
0.9
128
Supplied to
another
enterprise
(reseller),
thousand
Gcal
7127
129.3
11.3
252.8
293.3
63
13.4
2.1
666.3
254.6
23.7
6.8
18.6
7.1
258.5
483.4
1735.1
298.1
14.3
1.3
2437.5
1.5
1.2
127.6
0.7
2.8
22.7
–
Thermal
power for
balance of
plants,
thousand
Gcal
3574.8
45.4
69.7
25.8
244.8
236.7
30.2
9.8
246.5
60.2
573.1
22.3
394.6
299.5
20.1
71.6
45.7
31.8
27.9
19.7
348.5
37.9
112.8
25.3
7.1
73
468
26.8
Thermal power
received from
outside during
the year,
thousand Gcal
7375.3
107
13.4
279.1
1096.4
54.1
25.2
14.7
536.7
90.9
226.3
4.8
104.5
119.4
271.6
502.3
162.2
315.4
5.5
25.2
2464.3
6.7
9.8
136.7
20.7
20.9
760.8
0.7
Losses of
thermal
power during
the year,
thousand
Gcal
12385.2
265.1
175.9
126.5
1672
1334.2
132
91.6
526.9
181.3
316.3
92.9
440.7
388.5
158.9
463.6
331.8
140.6
394.5
67.4
1182.5
166.7
242.8
387
30.2
287.2
2676.5
111.6
Annex 15: Heat production and supply by boiler house in urban areas in 2008
Ukraine
incl.
Thermal power
produced during
the year,
thousand Gcal
Total thermal
power supplied,
thousand Gcal
Thermal power
supplied for own
consumers,
thousand Gcal
residential
consumers,
thousand Gcal
municipal
consumers,
thousand Gcal
Supplied to
another
enterprise
(reseller),
thousand Gcal
industrial
consumers,
thousand Gcal
Thermal power
for balance of
plants,
thousand Gcal
Thermal power
received from
outside during
the year,
thousand Gcal
Losses of
thermal power
during the year,
thousand Gcal
99385.2
90875.6
85148.2
51533.3
20817.9
12796.9
5727.4
3509.7
7302
12301.9
AR of Crimea
2782.1
2579.4
2450.1
1400.7
981.7
67.7
129.3
44.7
107
265
Vinnytsia Oblast
2123.6
1891.6
1880.2
791.1
817
272.1
11.3
69.5
13.4
175.9
Volyn Oblast
1238.5
1368.5
1116.7
656.3
352.6
107.8
251.8
22.5
274.6
122.2
9388.3
8568.4
8276.4
5060.7
1849
1366.7
292
244.3
1095.7
1671.3
Donetsk Oblast
11143
9637.5
9574.9
6844.9
2008.8
721.2
62.6
232.7
54.1
1326.9
Zhytomyr Oblast
1563
1426
1412.6
748.6
463.5
200.4
13.4
30.1
24.8
131.7
Zakarpattia Oblast
587.5
501.2
499.1
122.5
364.2
12.4
2.1
9.7
14.7
91.3
Zaporizhia Oblast
5885.5
5646.3
4980
2712.3
801.9
1465.8
666.3
246.3
533.8
526.7
1374.1
1229.8
975.9
504.6
354.5
116.8
253.9
54.5
90.6
180.4
Kyiv Oblast
3637.7
3005.6
2983.1
1580.4
788.4
614.3
22.5
560.7
200.6
271.9
Kirovograd Oblast
1006.6
895
888.2
497.1
308.4
82.7
6.8
22
3.4
92.9
Lugansk Oblast
6524.4
5794.6
5776
2106.3
928.1
2741.6
18.6
394.4
104.5
439.9
Lviv Oblast
4033.4
3460.6
3453.7
1778.7
977.7
697.3
6.9
299
113.5
387.3
Mykolaiv Oblast
1619.2
1711.7
1453.9
921.4
371.1
161.4
257.8
19.8
270.8
158.5
Odesa Oblast
4137.6
4105.3
3626.9
2074.7
830.5
721.7
478.4
71.1
502.3
463.5
Poltava Oblast
4825.8
4611.8
2877.7
1159.5
513.7
1204.4
1734.2
44
161.6
331.5
Rivne Oblast
1649.9
1794.6
1496.5
828.9
414.3
253.4
298.1
29.7
314.1
139.7
Sumy Oblast
394.5
2266.5
1851.8
1837.5
1099.9
438.2
299.4
14.3
25.4
5.2
Ternopil Oblast
863.5
801.7
800.4
464.6
231.4
104.3
1.3
19.7
25.2
67.4
Kharkiv Oblast
7745.5
8701.1
7650.8
5370.9
1488
791.9
1050.3
323.6
2442.4
1163.2
Kherson Oblast
988.4
790.7
789.2
469.9
275.4
43.9
1.5
37.8
6.7
166.7
Khmelnytsky Oblast
2163.3
1818.6
1817.6
1158.3
489.6
169.6
1
111.7
9.8
242.8
Cherkasy Oblast
2080.7
1805.2
1677.6
1109.3
432.6
135.7
127.6
21.7
132.3
386.1
Chernivtsi Oblast
481.4
464.8
464.1
221
227.2
16
0.7
7.1
20.7
30.2
Chernigiv Oblast
1935.8
1595.3
1593.3
996.9
413.7
182.8
2
72.9
18.7
286.3
16359.3
13975.6
13952.9
10167.2
3540.3
245.4
22.7
468
760.8
2676.5
980.6
842.9
842.9
686.6
156.1
0.2
–
26.8
0.7
111.6
Kyiv City
Sevastopol City
129
Annex 16: Heat production and supply by boiler house in rural areas in 2008
Ukraine
AR of Crimea
Vinnytsia Oblast
Volyn Oblast
Donetsk Oblast
Zhytomyr Oblast
Zakarpattia Oblast
Zaporizhia Oblast
Kyiv Oblast
Kirovograd Oblast
Lugansk Oblast
Lviv Oblast
Mykolaiv Oblast
Odesa Oblast
Poltava Oblast
Rivne Oblast
Sumy Oblast
Ternopil Oblast
Kharkiv Oblast
Kherson Oblast
Khmelnytsky Oblast
Cherkasy Oblast
Chernivtsi Oblast
Chernigiv Oblast
Sevastopol City
incl.
Thermal power
produced
during the
year, thousand
Gcal
Total thermal
power
supplied,
thousand
Gcal
Thermal power
supplied for
own
consumers,
thousand Gcal
residential
consumers,
thousand
Gcal
5314.2
82.8
64.2
160.6
83.2
146.7
210
38.9
127.3
202.4
470.3
131.6
62
157.2
129.1
133.3
283
179
143.7
123.5
1719.1
70.9
62.8
335.3
51.3
144.9
1.1
5239.4
82.1
64
157.5
82.7
135.4
210
38.6
129.8
196.1
439.3
132.8
61.1
161.4
129.2
132.7
281.6
177.3
141.4
123.5
1696.7
70.8
61.8
335.1
51.3
146.1
1.1
3840
82.1
64
156.5
81.4
135
210
38.6
129.8
195.5
438.1
132.8
61
161.3
128.6
127.7
280.8
177.3
141.4
123.5
309.5
70.8
61.6
335.1
51.3
145.2
1.1
285
4.9
3.9
3.5
3.6
41.2
1.9
2.9
0.9
–
85
2.4
2.8
15.5
0.9
6.8
32.4
3
5.9
–
54.4
1.9
–
7.1
–
4.1
–
municipal
consumers,
thousand
Gcal
2816.1
38.3
34
152.2
76.6
68.8
206.2
33.5
128.1
158.6
204
129.6
57
140.5
126.5
83
158.1
159.8
61.4
113.2
188.6
68.8
52.7
196.5
51.3
128.4
0.4
industrial
consumers,
thousand
Gcal
738.6
38.8
26.1
0.8
1.2
24.9
2
2.3
0.8
36.9
149
0.9
1.2
5.2
1.1
37.9
90.3
14.4
74
10.4
66.5
–
9
131.5
–
12.7
0.7
130
Supplied to
another
enterprise
(reseller),
thousand
Gcal
1399.5
–
–
1
1.3
0.4
–
–
–
0.6
1.2
–
0.1
0.2
0.7
5
0.9
–
–
–
1387.2
–
0.1
–
–
0.8
–
Thermal
power for
balance of
plants,
thousand
Gcal
65.4
0.7
0.2
3.4
0.5
4
0.1
–
0.2
5.7
12.3
0.2
0.2
0.6
0.3
0.5
1.7
2.1
2.5
–
25
0.1
1.1
3.7
–
0.2
–
incl.
73.4
–
–
4.5
0.7
–
0.4
–
2.9
0.4
25.7
1.4
–
5.9
0.8
–
0.7
1.3
0.2
–
21.9
–
–
4.4
–
2.2
–
Supplied to
another
enterprise
(reseller),
thousand Gcal
83.2
–
–
4.3
0.7
7.3
0.3
0.2
0.2
1
44.4
–
0.8
1.2
0.4
0.1
0.3
0.9
–
–
19.3
–
–
0.9
–
0.9
–
Annex 17: Heat production and supply by boiler house in urban and rural areas in 2009
Ukraine
AR of Crimea
Vinnytsia Oblast
Volyn Oblast
Donetsk Oblast
Zhytomyr Oblast
Zakarpattia Oblast
Zaporizhia Oblast
Kyiv Oblast
Kirovograd Oblast
Lugansk Oblast
Lviv Oblast
Mykolaiv Oblast
Odesa Oblast
Poltava Oblast
Rivne Oblast
Sumy Oblast
Ternopil Oblast
Kharkiv Oblast
Kherson Oblast
Khmelnytsky Oblast
Cherkasy Oblast
Chernivtsi Oblast
Chernigiv Oblast
Kyiv City
Sevastopol City
Thermal power
produced during
the year,
thousand Gcal
Total thermal
power supplied,
thousand Gcal
97971.3
2815.1
2101.2
1385.6
8796.2
10701.3
1685.3
632.7
4977.2
1326
3834.3
1051.6
4964.9
4103.7
1537.1
3958.9
4639.9
1758.9
2263.9
883.8
9333.9
1000
2125.6
2293.9
556.9
2014
16425
804.4
90727.8
2606.9
1913.2
1528.6
9076.3
9195.3
1554.3
555.6
4828.7
1182.8
3283.9
935.2
4466.1
3508.4
1670.7
3909.2
4426.1
1908.7
1830.2
826.1
10239.2
788.4
1821.2
2033.4
543.5
1705.6
13697.7
692.5
Thermal power
supplied for own
consumers,
thousand Gcal
83844.1
2533.1
1903.9
1262.1
8557
9168.6
1547.6
555.6
4196.3
1127.2
3264.6
932
4464.2
3502.8
1398.3
3397.1
2824.4
1606.7
1810.8
825.5
7852.7
788.4
1820.9
1884.9
542.9
1702.3
13681.7
692.5
incl.
residential
consumers,
thousand Gcal
52055
1445.8
876.6
697.1
5458.3
6676.1
775
85.5
2657.9
514.2
1653.1
475.5
2027.5
1953.3
799.9
1908
1243.5
892.6
1088.1
469.5
5584.6
438.2
1122.5
1136.2
253.3
1021
10243.7
558
municipal
consumers,
thousand Gcal
22241.7
1005
860
485.5
1863.4
1916.1
653
451.6
885.1
505.4
845.7
400.2
920.8
1043.5
447.6
754.2
619.8
532
453
322.6
1618.2
312.3
504.2
590.1
288.1
537
3293.3
134
industrial
consumers,
thousand Gcal
9547.8
82.3
167.4
79.6
1235.3
576.5
119.7
18.5
653.3
107.6
765.8
56.3
1515.9
506
150.9
734.9
961.1
182.2
269.7
33.4
649.8
38
194.1
158.5
1.5
144.3
144.7
0.5
131
Supplied to
another
enterprise
(reseller),
thousand Gcal
6883.4
73.8
9.3
266.4
519.4
26.6
6.7
–
632.4
55.6
19.3
3.2
1.9
5.6
272.4
512.1
1601.7
301.9
19.4
0.6
2386.5
–
0.3
148.4
0.6
3.3
16
–
Thermal power
for balance of
plants,
thousand Gcal
3243.5
45.5
57
24
227.3
228.9
26.7
8.1
159.8
53.4
463.7
24.8
224.3
284.1
10.7
63.9
41.1
32.3
25.5
17.7
326.5
23.9
97.8
24.6
7.7
66.8
655.6
21.8
incl.
8279
110.5
13.6
295.6
2136.1
31.3
22.5
9.3
508.6
101.1
226.9
3.5
99.6
122.9
285.4
453
160.4
323.8
4.5
25.1
2432
4.9
11
156.1
26.9
43.9
670.5
–
Supplied to
another enterprise
(reseller),
thousand Gcal
12279.3
273.1
144.5
128.6
1628.7
1308.5
126.8
78.4
497.3
190.9
313.5
95.1
374.2
434.2
141.2
438.8
333.2
141.8
412.7
65.2
1200.1
192.7
217.6
392
32.6
285.5
2742.1
90
Annex 18: Heat production and supply by boiler house in urban areas in 2009
incl.
Thermal power
produced during
the year,
thousand Gcal
Ukraine
AR of Crimea
Vinnytsia Oblast
Volyn Oblast
Donetsk Oblast
Zhytomyr Oblast
Zakarpattia Oblast
Zaporizhia Oblast
Kyiv Oblast
Kirovograd Oblast
Lugansk Oblast
Lviv Oblast
Mykolaiv Oblast
Odesa Oblast
Poltava Oblast
Rivne Oblast
Sumy Oblast
Ternopil Oblast
Kharkiv Oblast
Kherson Oblast
Khmelnytsky Oblast
Cherkasy Oblast
Chernivtsi Oblast
Chernigiv Oblast
Kyiv City
Sevastopol City
93110.8
2743.9
2047.1
1232.6
8726.6
10565.9
1486.9
570
4860.3
1155.2
3428.2
930.1
4910.7
3969.9
1422.5
3808.7
4346.9
1587.7
2196.6
763.2
7663.3
921.4
2075.4
2055.1
537.7
1875.9
16425
804
Total thermal
power supplied,
thousand Gcal
85916.3
2534.4
1859.6
1376.6
9006.8
9062.4
1355.8
492.9
4711
1016.7
2903.2
813.1
4412.2
3370.4
1556
3759.4
4132.7
1734.8
1764.3
705.3
8592.4
709.8
1771.9
1795.4
524.3
1565
13697.7
692.2
Thermal power
supplied for own
consumers,
thousand Gcal
80446.7
2460.6
1850.3
1110.3
8487.8
9035.7
1349.1
492.9
4078.6
961.9
2885.4
809.9
4410.3
3365.6
1284.3
3252.6
2532
1432.8
1744.9
704.8
7608.2
709.8
1771.7
1647
523.7
1562.6
13681.7
692.2
residential
consumers,
thousand Gcal
51832.9
1442.8
873.1
691.2
5455.7
6663.2
773.3
83.4
2657.1
514
1575
473.5
2025
1948.1
799.3
1899.1
1208.9
889
1086.1
469.5
5542.9
437.3
1122.5
1129.8
253.3
1018.1
10243.7
558
municipal
consumers,
thousand Gcal
industrial
consumers,
thousand Gcal
19533.7
955.3
813.9
339.9
1797.2
1798.6
457.4
392.7
769
366.3
646.1
280.7
869.8
915.6
335
666.2
471.7
367.2
413.6
212.5
1453.1
234.5
463.2
410.7
268.8
407.4
3293.3
134
9079.8
62.5
163.3
79.2
1234.9
573.9
118.3
16.7
652.5
81.6
664.3
55.7
1515.6
501.9
150
687.3
851.4
176.7
245.1
22.8
612.2
38
186
106.5
1.5
137
144.7
0.2
132
Supplied to
another
enterprise
(reseller),
thousand Gcal
5469.6
73.8
9.3
266.3
519
26.6
6.7
–
632.4
54.7
17.8
3.2
1.9
4.8
271.8
506.8
1600.7
301.9
19.4
0.6
984.2
–
0.2
148.4
0.6
2.5
16
–
Thermal
power for
balance of
plants,
thousand Gcal
3183.4
45.5
56.5
20.7
227
228.3
26.6
8.1
159.6
50.1
451.5
24.5
224.2
283.8
10.4
63.4
39.6
30.2
24.4
17.7
298.6
23.9
96.9
20.1
7.7
66.7
655.6
21.8
incl.
8197.1
109.2
13.6
289.3
2135.6
31.3
22.1
9.3
507.4
99
200.6
2.6
99.6
117.7
284.7
453
158.2
317.5
4.5
25
2411.1
4.9
11
151.6
26.9
40.9
670.5
–
Supplied to
another
enterprise
(reseller),
thousand
Gcal
12208.6
273.1
144.5
124.6
1628.4
1306.6
126.6
78.4
497.1
187.4
274.1
95.1
374
433.4
140.8
438.8
332.9
140.3
412.5
65.2
1183.4
192.7
217.6
391.2
32.6
285.2
2742.1
90
Annex 19: Heat production and supply by boiler house in rural areas in 2009
Ukraine
Autonomous Republic of the Crimea
Vinnytsia Oblast
Volyn Oblast
Donetsk Oblast
Zhytomyr Oblast
Zakarpattia Oblast
Zaporizhia Oblast
Kyiv Oblast
Kirovograd Oblast
Lugansk Oblast
Lviv Oblast
Mykolaiv Oblast
Odesa Oblast
Poltava Oblast
Rivne Oblast
Sumy Oblast
Ternopil Oblast
Kharkiv Oblast
Kherson Oblast
Khmelnytsky Oblast
Cherkasy Oblast
Chernivtsi Oblast
Chernigiv Oblast
Sevastopol City
Thermal power
produced during
the year,
thousand Gcal
Total thermal
power
supplied,
thousand Gcal
Thermal power
supplied for own
consumers,
thousand Gcal
4860.5
71.2
54.1
153
69.6
135.4
198.4
62.7
116.9
170.8
406.1
121.5
54.2
133.8
114.6
150.3
293
171.2
67.3
120.6
1670.6
78.6
50.2
238.8
19.2
138.1
0.3
4811.4
72.5
53.6
152
69.5
132.9
198.5
62.7
117.8
166.2
380.7
122.1
53.8
138
114.7
149.8
293.4
173.9
65.9
120.8
1646.7
78.6
49.3
237.9
19.2
140.6
0.3
3397.5
72.5
53.6
151.8
69.1
132.9
198.5
62.7
117.8
165.3
379.2
122.1
53.8
137.2
114
144.5
292.5
173.9
65.9
120.8
244.5
78.6
49.2
237.9
19.2
139.7
0.3
residential
consumers,
thousand Gcal
221.9
3
3.4
5.9
2.6
12.9
1.6
2.1
0.8
0.2
78.1
2
2.5
5.2
0.6
8.9
34.6
3.6
1.9
–
41.8
0.9
–
6.4
–
2.9
–
incl.
municipal
consumers,
thousand Gcal
2707.6
49.7
46.1
145.5
66.2
117.4
195.5
58.9
116.1
139.1
199.7
119.5
51
127.9
122.6
88
148.1
164.8
39.3
110.1
165.1
77.7
41.1
179.5
19.2
129.5
–
industrial
consumers,
thousand Gcal
467.8
19.8
4.1
0.4
0.4
2.6
1.4
1.8
0.8
26
101.5
0.6
0.3
4
0.8
47.5
109.7
5.5
24.6
10.7
37.6
–
8.1
52
–
7.3
0.3
133
Supplied to
another enterprise
(reseller),
thousand Gcal
Thermal power
for balance of
plants,
thousand Gcal
incl.
Supplied to another
enterprise
(reseller), thousand
Gcal
1413.7
–
0.1
0.4
–
–
–
–
0.8
1.5
–
–
0.8
0.6
5.3
0.9
–
–
–
1402.3
–
0.1
–
–
0.9
–
60.4
0.5
3.2
0.3
0.6
0.1
–
0.2
3.2
12.2
0.4
0.2
0.3
0.3
0.5
1.5
2.2
1.2
–
27.9
–
0.9
4.6
–
0.1
–
81.8
1.4
–
6.2
0.4
–
0.5
–
1.1
2.1
26.3
1
–
5.2
0.7
–
2.2
6.3
–
0.1
20.8
–
–
4.5
–
3
–
70.6
–
4
0.2
1.9
0.3
–
0.1
3.5
39.4
–
0.2
0.8
0.4
–
0.3
1.5
0.2
–
16.7
–
–
0.8
–
0.3
–
Annex 20: Heat production history
Dynamics of heat production by boilers in Ukraine during the period of 1997-2009 [11-25]
700000
6 54 640
6 150 04
590 33 0
600000
54 68 19
536 79 6
53 27 31
5 21 693
517 89 7
49 80 94
500000
497 53 5
46 94 66
4 38 354
E. TJ
41 01 86
400000
300000
200000
Dynamics
of heat received from outside in Ukraine for the period of 1997-2009 [11-25]
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
250000
200000
1 98 58 9
1 79 34 5
150000
E. TJ
97 04 7
100000
5 477 6
4 340 6
50000
3 96 59
3 74 17
3 32 67
3 27 40
327 47
296 87
34 663
30 879
0 boiler house own consumption in Ukraine for the period of 1997-2009 [11-25]
Heat used for
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
30000
2 60 60
26 47 1
25000
22 225
20000
18 55 0
17 917
18550
16329
15682
14 96 7
15000
13 91 9
E. TJ
13 580
1 235 8
11612
10000
5000
0
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Dynamics of total heat supplied in Ukraine in the period of 1997-2009 [11-25]
900000
800000
700000
7 73 32 2
6 89 62 0
6 37 340
600000
51 941 2
50 525 3
500000
48 118 0
49 62 91
47 224 4
49 30 89
4 799 67
4 310 71
E. TJ
4 024 14
400000
3 798 59
300000
200000
100000
0
134
Dynamics of heat provided for own consumers in Ukraine in the period of 1997-2009 [11-25]
800000
700000
667006
600000
558938
565160
500000
476200
462126
440003
457118
432154
454350
443064
398910
E. TJ 400000
372575
351038
300000
200000
100000
0
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Dynamics of heat provided for population in Ukraine in the period of 1997-2009 [11-25]
400000
350000
337248
322487
300000
284155
282030
266331
264709
251585
248140
250000
261045
253987
230316
216954
217944
2008
2009
E. TJ 200000
150000
100000
50000
0
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Dynamics of heat supplied to communal and household users in Ukraine in the period of 1997-2009
200000
180000
172895
160000
140000
120000
E. TJ 100000
138956
127947
112197
110335
104242
103952
98080
106547
109442
99210
98952
93122
80000
60000
40000
20000
0
1997 of1998
1999 2000
2001
2002needs
2003 in 2004
2005in the
2006period
2007 of 2008
2009 [11-25]
Dynamics
heat supply
for production
Ukraine
1997-2009
135
180000
160000
15 686 3
13 58 27
140000
11 4724
120000
100000
E. TJ
85 460
884 55
8762 1
8249 0
8 19 73
86 758
7963 3
80000
6 9384
5 6670
60000
399 75
40000
20000
0
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Dynamics
of heat
losses
in Ukraine
in the
period
of 1997-2009
[11-25]
60000
58000
55924
56000
54000
54696
53846
53584
54991
53149
52486
51739
52000
51751
51854
2007
2008
51411
50350
E. TJ 50000
48708
48000
46000
44000
42000
40000
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2009
136
Annex 21: Heat and power consumption by non-residential
sector in 2008
Actual use per
production unit in the
reporting period,
c.e.kg
Actual use for the
entire production in
the reporting period,
c.e.ton
330.1
4221952
396.2
649772
191.8
67582
Power generated by general use thermal plants,
except for CHPs, operating on organic fuel,
thousand kW-hour
399.0
26482195
Electric power generated by thermal plants, except
for CHPs, operating on organic fuel, not connected
to the power system, thousand kW-hour
190.8
23901
Thermal power generated and supplied by electric
power plants, Gcal
166.8
7088658
Thermal power generated and supplied by boiler
plants, Gcal
164.6
16461403
Thermal power generated and supplied by
individual boilers not connected to a boiler plant
(conditional boiler plants), Gcal
167.7
289388
Product
Power generated by general use CHPs operating
on organic fuel, thousand kW-hour
Power generated by CHPs operating on organic
fuel-block stations, thousand kW-hour
Power generated by CHPs operating on organic
fuel, not connected to the power system, thousand
kW-hour
Annex 22: Heat production and supply by boiler house in rural areas
in 2008
Product
Actual use per
reporting period,
c.e.kg
Actual use for the entire
production in the
reporting period, c.e.ton
Losses of thermal power in main thermal
networks of power system of the Ministry of Fuel
and Energy of Ukraine, Gcal
15.3
7268270
Electric power generated by CHPs operating on
organic fuel-block stations, thousand kW-hour
996.9
3825
137
Annex 23: Heat and power generation in 2008
Product
Actual use per
reporting period,
c.e.kg
Actual use for the
entire production in
the reporting period,
c.e.ton
Losses of electric power in electric networks of
power system of the Ministry of Fuel and Energy
of Ukraine, thousand kW-hour
11.0
14611182
Electric power generated by general use CHPs
operating on organic fuel, thousand kW-hour
128.2
2222
electric power plants, Gcal
20.0
6985
31.1
2075052
238.8
75208
Thermal power generated and supplied by boiler
plants, Gcal
individual boilers not connected to a boiler plant
(conditional boiler plants), Gcal
Annex 24: Usage of secondary fuel resources in 2008
Name
Ukraine
Vinnytsia Oblast
Volyn Oblast
Donetsk Oblast
Zhytomyr Oblast
Zakarpattia Oblast
Zaporyzhia Oblast
Kirovograd Oblast
Lugansk Oblast
Lviv Oblast
Mykolaiv Oblast
Poltava Oblast
Sumy Oblast
Khmelnytsky Oblast
Cherkasy Oblast
Output
tce
Actually used
tce
11024169
35504
15789
2685981
5768438
32060
52449
1298449
78268
55023
903706
17953
132
45790
28442
6170
15
9672427
33678
14285
2203586
5247960
21176
46532
1180780
76710
48223
712252
15014
132
45691
20310
6083
15
Consumption
coefficient, %
87.7
94.9
90.5
82.0
91.0
66.1
88.7
90.9
98.0
87.6
78.8
83.6
100.0
99.8
71.4
98.6
100.0
Losses
Absolute tce
1351742
1826
1504
482395
520478
10884
5917
117669
1558
6800
191454
2939
0
99
8132
87
0
%
12.3
5.1
9.5
18.0
9.0
34.0
11.3
9.1
2.0
12.4
21.2
16.4
0.0
0.2
28.6
1.4
0.0
138
Annex 25: Usage of secondary fuel resources in 2008
Name
Ukraine
Autonomous Republic of Crimea
Vinnytsia Oblast
Donetsk Oblast
Zhytomyr Oblast
Zakarpattia Oblast
Zaporyzhia Oblast
Kyiv Oblast
Kirovograd Oblast
Lugansk Oblast
Lviv Oblast
Odesa Oblast
Poltava Oblast
Rivne Oblast
Sumy Oblast
Kharkiv Oblast
Kherson Oblast
Khmelnytsky Oblast
Cherkasy Oblast
Chernigiv Oblast
м.Kyiv
Output
Gcal
16655766
511346
13602
1583399
6263586
13018
60104
526705
498166
44882
146060
2012490
12887
217600
221469
2687197
480257
216674
14645
7257
1121850
969
1603
Possible heat
generation
Gcal
13935294
372620
13602
1583399
5137855
11518
60104
520681
442866
38249
146060
1891424
12887
140600
130608
1701290
418015
177592
14645
7257
1111450
969
1603
Actually
used
Gcal
11935024
258856
13602
1244714
4514742
10709
60104
497647
351976
13544
0
1778959
12887
117498
96436
1491795
237760
134480
12313
7257
1077173
969
1603
Losses
Consumption
coefficient, % Absolute
%
Gcal
85.7
2000270
12.0
69.5
113764
22.3
100.0
0
0.0
78.6
338685
21.4
87.9
623113
9.9
93.0
809
6.2
100.0
0
0.0
95.6
23034
4.4
79.5
90890
18.2
35.4
24705
55.0
0.0
146060 100.0
94.1
112465
5.6
100.0
0
0.0
83.6
23102
10.6
73.8
34172
15.4
87.7
209495
7.8
56.9
180255
37.5
75.7
43112
19.9
84.1
2332
15.9
100.0
0
0.0
96.9
34277
3.1
100.0
0
0.0
100.0
0
0.0
139
Annex 26: Heat and water metering and controls in residential building stock, 2008
Region
Adjusted
Program
objectives
AR of Crimea
Vinnytsia
Volyn
Dnipropetrovsk
Donetsk
Zhytomyr
Zakarpattia
Zaporyzhia
Ivano-Frankivsk
Kyiv
Kirovograd
Lugansk
Lviv
Mykolaiv
Odesa
Poltava
Rivne
Sumy
Ternopil
Kharkiv
Kherson
Khmelnytsky
Cherkasy
Chernivtsi
Chernigiv
Kyiv City
Sevastopol City
Total:
8 791
6 487
2 272
16 453
20 051
5 126
4 532
9 530
5 543
5 418
1 605
16 631
16 828
3 974
18 853
7 743
2 485
3 533
2 191
22 230
3 370
3 159
2 700
4 366
3 521
9 808
2 535
209 735
Cold water meters
As on
As on
01.01.
01.01.
2007
2008
7 245
902
345
1 010
6 597
492
357
1 284
958
1 208
788
1 197
939
508
5 992
390
183
143
485
1 882
132
220
431
493
288
20 460
1 859
56 788
7 475
858
431
1 405
6 831
607
328
1 362
1 471
1 445
652
2 026
1 052
522
5 198
601
153
148
451
2 415
164
211
396
609
330
8 862
1 891
47894
% to the
Program
objective
Adjusted
Program
objectives
85.03
13.23
18.97
8.54
34.07
11.84
7.24
14.29
26.54
26.67
40.62
12.18
6.25
13.14
27.57
7.76
6.16
4.19
20.58
10.86
4.87
6.68
14.67
13.95
9.37
90.35
74.60
22.84
4 899
4 290
550
9 069
5 731
1 305
903
3 639
1 812
2 573
388
6 549
2 432
1 861
4 085
5 068
615
2 626
502
14 609
918
1 012
1 014
490
1 434
8 120
2 455
88 949
Hot water meters
As on
As on
01.01.
01.01.
2007
2008
215
110
30
94
361
87
11
729
197
113
11
45
648
217
291
127
22
49
65
228
6
57
96
1
84
1616
4
5 514
244
97
33
119
443
84
5
445
356
119
11
26
755
209
307
92
20
43
58
225
6
54
64
3
90
2046
4
5 958
% to the
Program
objective
Adjusted
Program
objectives
4.98
2.26
6.00
1.31
7.73
6.44
0.55
12.23
19.65
4.62
2.84
0.40
31.04
11.23
7.52
1.82
3.25
1.64
11.55
1.54
0.65
5.34
6.31
0.61
6.28
25.20
0.16
6.70
5 150
5 993
1 399
9 453
19 398
4 132
1 860
9 127
2 970
4 361
893
11 735
4 814
2 984
4 309
6 162
1 718
3 189
1 376
22 148
2 507
2 462
4 423
887
2 351
9 510
2 535
147 846
Thermal power meters
As on
As on
% to the
01.01.
01.01.
Program
2007
2008
objective
1943
637
93
831
4626
320
68
1054
204
467
538
220
3438
423
696
475
176
287
86
1221
532
362
462
67
283
2096
280
21885
140
2031
1180
119
1579
4596
269
17
1513
194
609
596
376
3697
425
572
453
170
525
67
1237
527
483
401
134
284
1974
307
24335
39.44
19.69
8.51
16.70
23.69
6.51
0.91
16.58
6.53
13.96
66.74
3.20
76.80
14.24
13.27
7.35
9.90
16.46
4.87
5.59
21.02
19.62
9.07
15.11
12.08
20.76
12.11
16.46
Adjusted
Program
objectives
5 150
5 993
1 399
9 453
19 398
4 132
1 860
9 127
2 970
4 361
893
11 735
4 814
2 984
4 309
6 162
1 718
3 189
1 376
22 148
2 507
2 462
4 423
887
2 351
9 510
2 535
147 846
Temperature regulators
As on
As on
% to the
01.01.
01.01.
Program
2007
2008
objective
9
89
3
71
2164
221
40
199
11
161
8
20
36
102
161
102
27
163
5
81
0
49
141
2
9
496
0
4 370
15
62
1
8
1390
46
2
362
2
8
0
5
75
44
130
30
17
43
0
37
0
20
10
1
6
260
0
2 574
0.29
1.03
0.07
0.08
7.17
1.11
0.11
3.97
0.07
0.18
0.00
0.04
1.56
1.47
3.02
0.49
0.99
1.35
0.00
0.17
0.00
0.81
0.23
0.11
0.26
2.73
0.00
1.74
Annex 27: Heat tariffs 2002-2009
Customer Category
2002
2003
2004
Weighted average
Residents
Budgetary
Others
63.22
96.25
102.19
64.17
102.62
109.13
67.52
109.50
116.74
2005
2006
UAH/Gcal
65.44
89.73
58.23
80.77
94.21
126.99
83.28
108.75
2007
2008
2009
133.22
115.20
214.79
179.97
172.23
144.56
282.75
242.72
229.80
179.45
432.01
393.70
Annex 28: Electricity prices for residential customers
Date from which the price is in effect
Residents
Residents that live in rural areas
Residents that live in buildings equipped with electric
kitchen appliances, electric heaters (including those living in
rural areas)
Residents that live in condominium buildings of human
settlements (cities, villages, towns) that have no natural gas
supply and which have non-functioning or no district heating
systems
Residential settlements
Residential settlements in rural areas
Residential settlements with buildings equipped with electric
kitchen appliances, electric heaters (including those living in
rural areas)
01.04.1999
01.05.2006
01.09.2006
01.12.2009
kopeks per 1 kWt/hour including VAT, as defined in the
NERC Decree #309 from 10.03.99 and its amendments
15.60
19.50
24.36
24.36
14.40
18.00
22.50
22.50
12.00
15.00
18.72
18.72
18.72
15.12
13.92
18.90
17.40
23.64
21.78
23.64
21.78
11.52
14.40
18.00
18.00
01.12.2009 01.02.2011
The tariffs are shown in kopiyka for 1 kWt/hour including VAT, and are shown according to the Decree of NERC #309
from 10.03.99 and its amendments
24,36
Residents:
24,36
if the amount of electricity consumption is not more than 150 kWh/month
31,68
if the amount of electricity consumption is more than 150 kWh/month
for families with many children, foster families and foster care homes with any amount of
electricity consumption
Residents that live in rural areas:
Residents in buildings with electric kitchen appliances, electric heaters
for families with many children, foster homes with any amount of electricity consumption
Residents that live in condominium buildings (cities, villages, towns) w/o gas supply or DH
Residential settlements
family type dormitories
Residential settlements in rural areas
family type dormitories in rural areas
family type dormitories which are in buildings equipped with electric kitchen appliances,
electric heaters (including those living in rural areas)
24,36
22,50
22,50
29,28
18,72
18,72
23,64
21,78
18,72
24,36
18,72
18,72
30,78
23,64
28,32
21,78
18,00
141
Annex 29: Natural gas prices for residential customers
# of the decree of NERC that sets the price
Date of the decree
Diversification of price according to consumption amount
if the amount of natural gas consumption is not more than
2500 sq.m/year:
in case gas meters are installed
in case gas meters are not installed
6000 sq.m/year:
12000 sq.m/year:
if the amount of natural gas consumption is more than 12000
sq.m/year:
310
10.03.99
01.04.99
400
30.03.06
01.05.06
739
08.06.06
01.07.06
1345
19.10.06
01.11.06
1672
19.12.06
01.01.07
1672
19.12.06
01.03.07
934
07.08.08
01.09.08
1239
25.10.08
01.12.08
812
13.07.10
01.08.10
31.5
34.5
31.5
34.5
35.82
39.36
48.36
53.16
72.54
79.80
47.8
52.6
47.8
52.6
54.24
59.64
73.20
80.52
109.80
120.78
98.0
107.8
98.0
107.8
111.00
122.10
149.88
164.82
224.82
247.32
117.3
129.0
117.3
129.0
132.60
145.86
179.04
196.86
268.56
295.41
The price of natural gas that is used for cooking and warming of water, but is not used for heating purposes:
31,5
34,5
The price of natural gas that is used by residents in for all purposes, including for heating, cooking and warming of water:
17.5
22.0
40.7
40.7
68.6
19.0
24.0
44.4
44.4
75.4
*Prices are provided in kopiykas/m3including VAT
142
Annex 30: Water supply tariffs, 2002-2009
Customer
Category
2002
2003
2004
2005
2006
2007
2008
2009
UAH/m3
Weighted average
0.75
0.92
1.20
1.53
1.96
Residents
Budgetary
0.55
1.25
0.65
1.55
0.72
1.92
0.61
1.69
0.78
2.12
1.08
2.57
1.38
3.11
1.85
4.03
Others
1.56
1.90
2.16
0.89
1.03
1.22
1.59
1.91
Annex 31: Waste water tariffs, 2002-2009
Customer
Category
2002
2003
2004
Weighted average
Residents
Budgetary
Others
0.40
0.84
1.03
0.44
1.11
1.34
0.51
1.35
1.59
2005
2006
UAH/m3
0.60
0.77
0.36
1.03
1.32
0.49
1.43
1.50
2007
2008
2009
1.05
1.33
1.81
0.69
1.88
1.96
0.90
2.34
2.39
1.32
3.09
3.14
143
Annex 32: Distribution matrix of residential building stock energy use
Zone I
Delivered energy in kWh/m2 for:
Space heating (incl vent.)
DHW
Lighting
Various
Total delivered energy in kWh/m2
Building stock conditioned area m2
Total delivered energy in MWh
DHW
Lighting
Various
Building stock conditioned area
m2
DHW
Lighting
Various
Zone II
165,0
22,0
10,0
12,6
After EE
measures
72,7
22,0
5,1
12,6
209,6
112,4
Baseline
262 765 515
55 075 652
143,0
22,0
10,0
12,5
After EE
measures
66,1
22,0
5,1
12,5
187,5
262 765 515
85 085 758
29 534 844
15 953 580
172,0
22,0
10,0
12,6
After EE
measures
59,7
22,0
5,1
12,6
216,6
99,4
Baseline
Zone III
Baseline
104,0
22,0
10,0
12,3
After EE
measures
54,2
22,0
5,1
12,3
105,7
148,3
93,6
85 085 758
51 303 966
8 993 565
7 608 378
158,0
22,0
10,0
12,5
After EE
measures
60,0
22,0
5,1
12,5
202,5
99,6
Baseline
Zone IV
Baseline
139,0
85,7
51 303 966
15 296 304
4 802 051
2 126 186
131,0
22,0
10,0
12,4
After EE
measures
49,0
22,0
5,1
12,4
175,4
88,5
Baseline
94,9
22,0
10,0
12,1
After EE
measures
46,5
22,0
5,1
12,1
Baseline
15 296 304
1 310 893
111,0
22,0
10,0
12,2
After EE
measures
41,9
22,0
5,1
12,2
155,2
81,2
Baseline
55 042 899
55 042 899
17 819 702
17 819 702
10 744 695
10 744 695
3 204 155
3 204 155
11 922 292
5 471 264
3 608 490
1 774 842
1 884 619
950 905
497 285
260 177
289,9
14,0
10,0
12,6
After EE
measures
121,3
14,0
5,1
12,6
326,5
153,0
Baseline
258,0
14,0
10,0
12,3
After EE
measures
110,0
14,0
5,1
12,3
294,3
141,4
Baseline
225,1
14,0
10,0
12,1
After EE
measures
98,2
14,0
5,1
12,1
261,2
Baseline
190,2
14,0
10,0
12,1
After EE
measures
89,7
14,0
5,1
12,1
129,4
226,3
120,9
Baseline
Building stock conditioned area m2
344 129 750
344 129 750
125 393 988
125 393 988
75 647 460
75 647 460
20 200 303
20 200 303
112 358 363
52 651 852
36 903 451
17 730 710
19 759 117
9 788 781
4 571 328
2 442 217
144
Annex 33: Classification of multi-story residential buildings in
Kyiv, 2004
Name
Series
Construction year
Number of
buildings,
units
"Pre-revolutionary"
–
before 1917
1556
12.9
1…8
"Stalinky"
–
1920s – mid 1950s
1898
15.7
2…13
"Khruschevka", "Cheshka", "464"
mid 1950s – late 1980s
1695
14.1
3…12
"96", "134",
"BPS-б"
1970s – 1980s
1041
8.6
9…16
"T", "KT", "APPS"
1970s – 1980s
861
7.1
9…22
"Khruschevka", "MM-640", "K14",
"1-318-35/36"
mid 1950s – late 1980s
2878
23.9
2…14
"87", "Departmental houses", "KP"
before 1991
809
6.7
4…20
Modern panel buildings
"APPS lux", "KT Uyut", "B-5",
"ES", "Individual project"
after 1991
286
2.4
9…26
Modern brick buildings
"Individual project"
after 1991
1038
8.6
2…28
Panel buildings
Brick buildings
Share, %
Stories
Annex 34: Normative maximum heat consumption of multi-story
buildings
House assignment/ number of
stories
Residential houses and hotels /
1-3
4-5
6-7
8-9
10 - 11
12 and more
Public and office buildings /
1
2
3
4 -5
6 -7
8 -9
10 - 11
12 and more
Medical and children
educational facilities /
1
2
3
4 -5
6 -7
8 -9
10 - 11
Pre-school facilities /
1-3
Shops, department stores,
supermarkets /
1
2
3
4 -5
6 -7
I
Emax, kW∙hour/m2, [kW∙hour/m3], for the temperature zone
II
III
IV
89 [32]
83 [30]
79 [29]
75 [27]
73 [26]
According to annex 23
77 [28]
65 [24]
72 [26]
61 [22]
69 [25]
58 [21]
65 [23]
55 [20]
63 [23]
54 [19]
53 [19]
50 [18]
48 [17]
45 [16]
44 [16]
[44]
[40]
[38]
94 [35]
89 [33]
83 [31]
79 [29]
77 [28]
[38]
[34]
[33]
81 [31]
77 [29]
72 [27]
69 [25]
67 [24]
[32]
[29]
[28]
69 [26]
65 [24]
61 [23]
58 [21]
57 [20]
[26]
[24]
[23]
56 [21]
53 [20]
50 [19]
48 [17]
46 [17]
[35]
[34]
[33]
[32]
[31]
[30]
[29]
[31]
[30]
[29]
[28]
[27]
[26]
[25]
[26]
[25]
[24]
[24]
[23]
[22]
[21]
[21]
[21]
[20]
[19]
[[19]
[18]
[17]
[43]
[37]
[31]
[26]
[24]
[23]
[22]
[21]
[21]
[21]
[20]
[19]
[18]
[18]
[18]
[17]
[16]
[15]
[15]
[92]
[14]
[13]
[12]
[12]
145
Space of
the building
heated, m2
Less than
60
60 - 150
151 - 250
251 - 400
401 - 600
601 - 1000
More than
1000
1
I
146
II
126
III
107
IV
87
130
115
104
113
99
90
95
84
76
78
69
62
–
–
–
Number of stories
2
3
Emax, kW∙hour/(m2∙year), for the temperature zone
I
II
III
IV
I
II
III
IV
–
–
141
125
109
94
83
73
122
108
95
81
72
63
103
92
80
69
61
53
84
75
66
56
50
44
–
117
99
86
77
68
135
115
99
89
78
99
84
73
65
57
81
69
59
53
47
4
I
II
III
IV
88
76
69
61
72
62
56
50
–
–
–
120
104
94
83
104
90
81
72
Annex 35: Distribution of housing in urban and rural area by
temperature zone
Temperature operation zone of Ukraine
Indicator
Number of
buildings, units
І
ІІ
ІІІ
ІV
6186974
2243297
1345849
363008
Total for
Ukraine
10139128
146
Total floor area of
housing
premises, m2
640139919
245315446
131535948
47975339
1064966652
Annex 36: Distribution of housing in urban area by temperature
zone
Indicator
Total for
Ukraine
І
ІІ
ІІІ
ІV
Number of
buildings, units
2565479
824632
496217
150611
4036939
Total floor area of
housing
premises, m2
420853554
152380930
75406040
34751053
683391577
Annex 37: Distribution of housing in rural area by temperature
zone
Indicator
Total for
Ukraine
І
ІІ
ІІІ
ІV
Number of
buildings, units
3621495
1418665
849632
212397
6102189
Total floor area of
housing
premises, m2
219286365
92934516
56129908
13224286
381575075
147
Annex 38: Distribution matrix of energy savings by EE measures
Apartment blocks up to 7 floors construction*
Zone I
Measures/Savings
New windows
kWh/m
32,8
27,0
12,8
19,6
4,9
2
2
Savings in kWh/m :
Apartment blocks more than 7 floors construction**
97,2
Zone I
Measures/Savings
New windows
kWh/m
42,5
41,7
3,6
18,9
4,9
2
Savings in kWh/m :
2
111,6
Zone I
Measures/Savings
New windows
TRV installing
Replacement heat generator with high efficient boiler
kWh/m
59,6
26,1
40,4
11,0
4,9
31,5
2
Savings in kWh/m :
173,5
2
Zone II
Zone II
2
2
kWh/m
29,0
19,2
11,9
16,9
4,9
kWh/m
17,4
11,6
8,5
12,3
4,9
81,8
Zone II
kWh/m
36,7
35,8
3,4
17,1
4,9
54,7
Zone II
2
kWh/m
29,1
31,0
2,6
14,2
4,9
97,8
Zone II
kWh/m
53,9
21,1
35,3
10,0
4,9
27,7
81,8
Zone II
2
kWh/m
48,9
15,6
30,4
8,9
4,9
23,1
152,9
131,8
* mostly before 1980
**mostly after 1980
2
148
2
Zone IV
kWh/m
17,0
11,5
8,2
11,7
4,9
2
53,3
Zone IV
kWh/m
24,7
24,4
2,4
12,5
4,9
2
68,9
Zone IV
kWh/m
41,4
12,6
21,3
6,6
4,9
18,6
105,4
2
Annex 39: Distribution matrix of savings in MWh
Urban areas
Urban apartment blocks up to 7 floors
construction*
Measures/Savings
New windows
Savings in MWh:
Urban apartment blocks more than 7
floors constructions**
Measures/Savings
New windows
Savings in MWh:
Urban single family houses
Measures/Savings
New windows
TRV installing
efficient boiler
Savings in MWh:
Zone I
MWh
8 246 915
6 796 541
3 227 926
4 932 727
1 231 757
Zone II
MWh
2 335 363
1 546 839
956 536
1 359 913
395 092
Zone II
MWh
846 014
566 370
412 511
595 773
238 217
Zone IV
MWh
248 023
168 405
120 447
171 616
71 659
Total
MWh
11 676 315
9 078 155
4 717 420
7 060 029
1 936 725
24 435 866
6 593 744
2 658 886
780 150
34 468 645
Zone I
MWh
2 241 419
2 200 389
188 836
994 856
258 278
Zone II
MWh
619 713
604 527
56 705
289 178
82 844
Zone II
MWh
296 767
316 394
26 110
144 672
49 950
Zone IV
MWh
75 633
74 831
7 360
38 402
15 026
Total
MWh
3 233 532
3 196 141
279 010
1 467 108
406 097
5 883 777
1 652 966
833 893
211 251
8 581 888
Zone I
MWh
7 809 832
3 421 606
5 303 050
1 446 286
642 446
Zone II
MWh
2 265 385
887 112
1 484 922
422 308
206 068
Zone II
MWh
1 239 444
394 558
769 860
226 570
124 247
Zone IV
MWh
315 929
96 204
162 230
50 517
37 375
Total
MWh
11 630 589
4 799 480
7 720 062
2 145 681
1 010 135
4 128 003
1 164 565
586 913
141 776
6 021 256
22 751 224
6 430 359
3 341 591
804 029
33 327 203
Rural areas
Rural apartment blocks up to 7 floors
construction*
Zone I
Zone II
Zone II
Zone IV
149
Total
Measures/Savings
New windows
Savings in MWh:
Rural apartment blocks more than 7
floors construction**
Measures/Savings
New windows
Savings in MWh:
Rural single family houses
Measures/Savings
New windows
TRV installing
efficient boiler
Savings in MWh:
MWh
373 554
307 858
146 213
223 434
55 794
MWh
129 026
85 461
52 847
75 133
21 828
MWh
46 780
31 318
22 810
32 943
13 172
MWh
11 398
7 739
5 535
7 887
3 293
MWh
560 758
432 375
227 405
339 397
94 088
1 106 852
364 296
147 024
35 852
1 654 023
Zone I
MWh
99 215
97 399
8 359
44 037
11 432
Zone II
MWh
33 458
32 638
3 061
15 613
4 473
Zone II
MWh
16 036
17 096
1 411
7 817
2 699
Zone IV
MWh
3 397
3 360
331
1 725
675
Total
MWh
152 106
150 494
13 162
69 191
19 279
260 441
89 244
45 060
9 487
404 231
Zone I
MWh
12 688 733
5 559 127
8 615 933
2 349 800
1 043 790
Zone II
MWh
4 489 301
1 757 986
2 942 662
836 885
408 363
Zone II
MWh
2 458 265
782 550
1 526 911
449 371
246 426
Zone IV
MWh
520 756
158 576
267 409
83 269
61 606
Total
MWh
20 157 055
8 258 239
13 352 915
3 719 325
1 760 185
6 706 818
2 307 812
1 164 061
233 694
10 412 384
36 964 201
12 743 009
6 627 583
1 325 309
57 660 102
150
Annex 40: Distribution matrix of savings in MW per apartment and family houses
For the apartment blocks in Ukraine
Measures/Savings
New windows
Sum savings in MWh:
For the single family houses in Ukraine
Measures/Savings
New windows
TRV installing
efficient boiler
Sum savings in MWh:
Total for Ukraine savings in MWh
Zone I
MWh
10 961 103
9 402 186
3 571 334
6 195 053
1 557 261
Zone II
MWh
3 117 561
2 269 466
1 069 150
1 739 837
504 237
Zone II
MWh
1 205 597
931 178
462 842
781 206
304 038
Zone IV
MWh
338 450
254 335
133 672
219 629
90 652
Total
MWh
15 622 711
12 857 165
5 236 997
8 935 726
2 456 189
31 686 937
8 700 250
3 684 862
1 036 739
45 108 787
Zone I
MWh
20 498 565
8 980 734
13 918 983
3 796 086
1 686 236
Zone II
MWh
6 754 686
2 645 098
4 427 584
1 259 193
614 431
Zone II
MWh
3 697 708
1 177 108
2 296 771
675 941
370 673
Zone IV
MWh
836 685
254 779
429 638
133 786
98 981
Total
MWh
31 787 643
13 057 719
21 072 977
5 865 006
2 770 320
10 834 820
3 472 376
1 750 974
375 469
16 433 639
59 715 424
91 402 361
19 173 368
27 873 618
9 969 174
13 654 036
2 129 338
3 166 078
90 987 305
136 096 092
151
Annex 41: Berdichev project costs estimates
Name of the projected
works
Project works during all
period of the renovation
External walls heating
insulation
Installation of the
consumed heating energy
check point
Installation of the electric
heater for the all building
hot water supply
Installation of the
individual heating
distribution point
Preparation and
renovation of the individual
heating distribution point
and electric boiler rooms.
Internal building water
supply, heating and
sewage pipe line systems
Installation of the roof gas
heater for the building hot
water and heating supply
Building backyard asphalt
renovation
Internal building basement
water supply, heating and
sewage systems
renovation
Stairwells windows change
for metal-plastic ones,
building front doors
replacement
Total
Total
cost
(thousan
d UAH)
Cost, thousand UAH.*
20/1 Lenina Str.
14 Lupova Str.
36 Novo-Ivanivska Str.
Thousand
UAH
Thousand
Euro
Thousa
nd UAH
Thousa
nd Euro
Thousand
UAH
Thousand
Euro
84,1
23,2
-
24,7
-
36,2
-
3215
1188,0
-
980,0
1047,0
-
20
10,0
-
-
-
10,0
-
420
140,0
-
140,0
-
140,0
-
330
110,0
-
110,0
-
110,0
-
7
7,0
-
-
-
-
-
14
7,0
-
7,0
-
-
-
980
-
-
450,0
-
530,0
-
21,6
-
-
21,6
-
-
-
60
-
-
-
-
60,0
-
60
-
-
-
-
60,0
-
5211,7
1485,2
1733,3
1993,2
* UAH/EUR exchange rate as of Sep. 01, 2007 is 6,9 UAH for 1 EUR
Annex 42: Berdichiv project financing plan
No.
According to the financing sources
% of the
general need
1,6
16,5
Applied to
ЕSCО own funds
City budget funds
Ukrainian State budget funds
Sum, UAH
(000)
84,1
860,9
1
2.
3.
4.
DIGH Loan
Total
4266,7
5211,7
81,9
100,0
Investments
Payment for design work
Investments
Annex 43: Lutsk project cost estimates
152
Type of works
Cost, UAH
Façade insulation
Roof insulation
Engineering systems
modernization
Replacement of old windows
Lighting system modernization
Total project cost
1 694 793
209 150
1 291 904
561 718
15 600
3 773 165
Annex 44: Banks loan and investment portfolio , 2011
(mln UAH)
Incl.
No
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
BANK
LIP**
TOTAL
613285.07
PRIVATBANK
93189.87
UKREXIMBANK
53630.81
OSCHADBANK
49234.79
UKRSOTSBANK*
30799.11
PROMINVESTBANK* 26872.16
VTB BANK
26774.67
OTP BANK
21093.38
ALFA BANK
18575.75
FINANSY I KREDIT
17158.58
NADRA
16685.74
PUMB
12672.58
BROKBUSINESSBANK 11092.38
CREDITPROMBANK* 10784.91
FORUM
9692.43
PIVDENNY*
8246.29
SVEDBANK
7958.36
SBERBANK ROSSII
7900.08
DELTA
7607.46
ING BANK UKRAINE 7599.73
UKRGAZBANK
7579.05
UNICREDIT BANK*
6995.23
ERSTE BANK
6303.51
FINANCIAL INITIATIVE 5791.52
DONGORBANK
5415.18
IMEXBANK
5006.06
UNIVERSAL BANK
4919.79
CITIBANK UKRAINE 4801.34
KHRESCHATYK
4793.78
VAB BANK
4179.95
INDEX-BANK
4006.85
KYIVSKA RUS*
3992.81
PRAVEX-BANK*
3883.66
BANK CREDIT3715.59
DNIPRO
CIB Credit Agricole
3176.48
BANK TAVRIKA
3035.55
MARFIN BANK
3000.56
BTA BANK
2932.71
CREDOBANK
2790.38
100.00
15.195
8.745
8.028
5.022
4.382
4.366
3.439
3.029
2.798
2.721
2.066
1.809
1.759
1.580
1.345
1.298
1.288
1.240
1.239
1.236
1.141
1.028
0.944
0.883
0.816
0.802
0.783
0.782
0.682
0.653
0.651
0.633
46866.16
10377.07
703.71
538.01
318.65
2590.94
259.45
402.69
2266.65
89.02
480.41
1062.68
687.65
865.96
139.47
510.92
1198.04
582.51
472.07
322.54
1721.79
0.00
406.70
262.01
1167.08
137.48
321.70
82.88
612.57
210.05
281.20
291.69
0.00
1736.52
312.68
66.02
3.35
16.49
45.28
3.01
54.76
59.25
8.94
148.80
19.49
1.40
4.19
154.03
4.60
13.01
6.67
0.21
14.94
482.79
0.00
1.44
49.18
12.65
4.06
0.67
0.83
0.53
1.48
3.58
0.30
0.00
476181.35
79558.32
48881.91
39034.64
16212.76
23948.54
25817.96
11591.53
16560.12
13550.62
8568.87
9763.36
8364.82
7486.00
8900.71
7458.22
8167.25
7397.06
6732.24
6412.82
5881.01
5674.24
1871.34
6336.61
2702.49
4830.51
1450.62
2224.62
3627.05
3625.91
2329.39
3248.33
1029.43
144121.52
19046.33
1095.03
4614.52
17496.90
1192.72
2715.89
9399.54
4306.14
3815.62
12547.63
3111.54
2382.99
2525.59
3889.05
885.24
5427.42
1221.49
3468.59
97.90
2517.64
1025.42
3241.49
1.69
1298.10
490.49
3340.66
52.75
514.70
1341.44
1928.21
488.96
3768.25
Reserve for
loans and
Securities
clients'
arrears
115844.74 63697.31
16352.33 873.16
7392.33
10408.53
5574.27
10625.23
6574.69
3361.99
2090.82
1276.06
4683.68
2668.07
3354.79
3109.17
6027.48
1529.58
1529.28
1241.53
5190.05
427.67
3009.58
1764.07
865.18
523.50
1603.44
1515.00
4304.62
1221.85
621.75
18.26
7274.55
453.21
2413.28
1118.96
3224.51
159.29
148.25
929.67
4916.34
2857.75
767.24
1062.81
1399.01
2184.43
808.24
48.64
1109.70
1369.87
448.37
0.01
1205.05
1012.53
136.64
2578.57
386.74
426.74
1185.75
189.79
597.96
69.59
223.43
187.56
1062.24
148.23
0.606
82.09
1.71
3384.97
600.61
416.49
66.12
0.518
0.495
0.489
0.478
0.455
110.00
460.57
253.62
1033.30
0.00
4.30
0.74
8.80
1.03
1.54
3319.40
2387.32
1918.90
1614.41
2785.01
21.86
268.76
926.43
435.00
983.28
271.72
100.44
582.36
247.43
1377.55
1.24
20.07
492.78
98.47
401.18
Share
(%)
Reserve Loans for
Interbank
Loans for
for banks' legal entities
loans***
individuals
arrears
***
153
Incl.
No
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
BANK
MEGABANK
BM BANK
PIREUS BANK MKB
UKRAINIAN
PROFESSIONAL
BANK
ACTIV-BANK
SEB BANK
INDUSTRIALBANK
CLEARING HOUSE
PIVDENCOMBANK
UKRINBANK
PROCREDIT BANK
VOLKSBANK
ZLATOBANK
UKRBUSINESSBANK
DIAMANTBANK*
NATIONAL
INVESTMENTS
BANK OF CYPRUS
EUROGAZBANK
RODOVID BANK
INTEGRAL
PLATINUM BANK
ASTRA BANK*
INVESTMENTS AND
SAVINGS BANK*
FORTUNA-BANK
EXPOBANK*
EXPRESS-BANK
ENERGOBANK
BUSINESS
STANDARD
BG BANK
DEMARK
TERRA BANK*
CREDIT EUROPE
BANK*
FINBANK
KAMBIO
GLOBUS
MISTO-BANK*
BASIS
UKRAINIAN CAPITAL*
UKRGAZPROMBANK
MERCURY
ZOLOTI VOROTA
DANIEL
HOME CREDIT BANK*
POLTAVA-BANK*
CAPITAL
ZAHIDINCOMBANK
AUTOKRAZBANK
UNEX
INPROMBANK
ERDE BANK*
UKRAINIAN
FINANCIAL WORLD
BANK
2744.68
2429.85
2242.47
0.448
0.396
0.366
135.94
344.71
102.71
0.03
0.16
0.03
2068.09
1802.16
1810.48
535.56
373.85
606.66
Reserve for
loans and
Securities
clients'
arrears
131.51
136.65
121.24
30.52
639.25
361.89
2206.47
0.360
313.23
6.16
1744.75
134.01
120.89
141.52
2180.30
2155.07
2149.43
2116.84
2091.24
1928.97
1925.03
1855.01
1819.73
1814.52
1745.98
0.356
0.351
0.350
0.345
0.341
0.315
0.314
0.302
0.297
0.296
0.285
193.70
100.48
105.61
129.60
405.76
370.74
35.92
70.00
342.66
51.74
145.79
0.18
10.88
3.39
0.04
6.76
3.56
0.56
0.73
3.19
1.79
0.26
1435.62
1172.34
1933.37
2112.99
1505.19
1372.62
974.52
617.24
1554.90
921.18
1524.16
646.36
1163.53
161.60
248.11
81.48
271.43
1042.94
1388.17
114.99
872.37
80.59
100.40
575.87
305.45
413.21
102.35
130.86
150.93
592.23
189.70
55.96
80.04
5.20
305.48
257.70
39.40
207.93
48.60
23.14
372.55
0.06
26.98
75.74
1737.76
0.283
354.92
0.44
910.76
464.89
66.92
74.54
1606.31
1508.56
1433.01
1417.66
1414.63
1387.96
0.262
0.246
0.234
0.231
0.231
0.226
32.51
1136.76
4.23
1010.12
412.68
100.00
0.11
0.09
1.09
11.67
32.12
10.52
1065.22
273.31
2346.90
385.83
0.00
257.73
509.67
98.97
1529.61
69.24
1206.20
419.19
185.02
10.49
3038.74
80.09
173.21
108.43
184.03
10.11
592.09
44.23
1.08
729.98
1332.77
0.217
240.30
1.98
1118.13
29.04
52.72
0.00
1296.82
1249.41
1180.08
1162.16
0.211
0.204
0.192
0.189
267.43
154.57
0.80
253.87
1.40
0.21
0.04
0.04
1140.14
999.21
902.08
750.45
27.86
308.09
404.45
227.48
137.27
300.00
139.19
99.24
0.06
87.74
11.99
29.65
1141.19
0.186
252.34
0.62
514.98
289.61
105.90
190.79
1133.39
1097.15
1095.57
0.185
0.179
0.179
296.60
177.56
480.14
0.81
1.35
2.18
695.51
967.20
323.58
196.02
89.93
115.41
74.09
153.93
38.86
20.17
17.74
217.49
1051.59
0.171
45.35
1.31
612.40
224.38
120.32
291.09
991.87
976.28
941.66
927.61
916.31
840.16
834.99
796.92
793.43
782.23
767.52
766.30
755.15
700.74
699.78
688.17
666.06
661.64
0.162
0.159
0.154
0.151
0.149
0.137
0.136
0.130
0.129
0.128
0.125
0.125
0.123
0.114
0.114
0.112
0.109
0.108
263.74
86.47
602.24
114.08
11.94
571.62
303.96
42.75
0.00
243.26
88.11
11.81
39.96
0.00
71.05
82.76
67.14
240.63
0.57
0.43
3.53
0.10
0.08
1.39
7.09
0.16
0.20
0.07
0.90
0.01
0.04
0.01
0.01
0.55
0.09
8.00
685.39
776.09
325.66
518.32
725.19
163.92
484.47
489.55
496.11
279.68
83.82
676.22
524.19
867.53
588.62
596.68
626.35
386.11
51.25
92.55
8.56
275.38
191.94
91.62
78.51
255.92
408.50
191.81
400.58
95.88
167.21
206.00
54.44
4.04
153.59
15.71
20.43
40.02
62.81
144.00
46.60
22.60
58.93
16.17
110.97
38.68
132.92
47.38
39.83
402.87
54.17
38.76
223.12
26.12
12.49
61.62
71.54
163.94
33.92
37.00
34.06
25.02
0.00
106.22
328.82
29.79
63.66
30.08
39.84
44.00
42.19
53.31
651.64
0.106
7.67
2.53
611.36
33.59
76.16
77.72
643.77
0.105
115.01
0.12
509.68
83.92
106.69
41.96
LIP**
Share
(%)
Reserve Loans for
Interbank
Loans for
loans***
individuals
arrears
***
154
Incl.
No
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
BANK
PETROCOMMERZUKRAINE
APEX-BANK*
PLUS BANK
FIRST INVESTMENTS
BANK
TK-CREDIT
КOMINVESTBANK*
EUROBANK*
PREMIUM*
BANK 3/4*
CONVERSBANK
LVIV
INTERNATIONAL
INVESTMENTS BANK
UNICOMBANK*
SOTSCOMBANK*
A-BANK
PORTO-FRANCO
NOVY*
METABANK
AGROCOMBANK
ARTEN-BANK
EUROPROMBANK*
GRANT
Bank Russian
Standard*
FINROSTBANK*
RENAISSANCE
CAPITAL BANK
VBR*
ASVIO BANK
CLASSIC BANK
INTERBANK
BLACK SEA BANK OF
RECONSTRUCTION
AND DEVELOPMENT
PROMECONOMBANK
INVESTBANK
REAL-BANK
POLICOMBANK
MORSKY
KYIV
TRUST-CAPITAL*
VOLODYMYRSKY
LEGBANK
SIGMABANK*
ACCORDBANK*
CONTRACT*
REGION BANK
CONCORD*
UKRCOMUNBANK*
EBRF
STOLYCHNY
RADICAL BANK
UCOOPSPILKA*
D-M BANK*
CREDITVEST BANK*
MOTOR-BANK*
LIP**
Share
(%)
Reserve Loans for
Interbank
Loans for
loans***
individuals
arrears
***
Reserve for
loans and
Securities
clients'
arrears
642.75
624.81
0.105
0.102
380.13
63.68
0.87
0.07
141.89
101.89
122.29
514.35
11.19
55.11
10.50
0.07
590.61
0.096
80.99
7.75
498.71
117.01
124.50
26.16
582.56
582.17
581.36
577.24
575.16
572.81
521.29
0.095
0.095
0.095
0.094
0.094
0.093
0.085
0.00
284.54
51.72
365.47
548.91
204.48
15.38
0.00
0.05
0.01
0.28
4.73
0.64
1.55
560.52
247.97
274.13
295.24
8.74
317.28
407.12
32.09
79.02
188.45
0.79
18.01
50.47
177.17
26.66
29.31
8.37
83.97
0.14
23.35
108.10
16.60
0.00
75.44
0.00
4.38
24.58
31.27
519.29
0.085
66.81
0.05
443.67
14.93
11.83
5.77
516.71
511.16
499.10
487.92
484.45
451.36
445.22
434.22
431.86
393.48
0.084
0.083
0.081
0.080
0.079
0.074
0.073
0.071
0.070
0.064
0.00
0.00
8.46
102.06
79.88
64.92
174.23
232.77
70.87
3.02
0.00
0.00
0.10
0.28
0.22
0.08
1.70
0.81
0.19
0.00
619.12
457.40
118.86
306.72
404.90
236.81
169.99
116.52
367.75
303.79
6.14
151.58
504.38
96.47
32.34
153.12
89.76
60.11
3.01
91.58
108.56
97.82
132.49
22.05
60.47
35.88
36.84
32.88
9.58
8.60
0.00
0.00
0.00
5.00
28.01
32.46
49.79
58.50
0.00
3.70
371.46
0.061
73.25
0.55
16.00
297.19
14.42
0.00
354.71
0.058
88.99
6.30
281.50
21.92
31.39
0.00
352.32
0.057
118.42
16.22
0.00
292.27
42.15
0.00
349.32
346.10
339.43
337.51
0.057
0.056
0.055
0.055
11.94
17.16
100.81
22.26
0.05
1.52
13.24
0.03
191.29
260.76
292.07
226.98
146.98
76.47
0.00
18.06
0.84
6.77
62.11
61.38
0.00
0.00
21.89
131.62
320.79
0.052
64.48
0.03
160.46
98.49
7.79
5.17
302.93
295.80
284.25
283.12
268.50
252.96
252.68
252.04
248.98
240.14
237.78
225.78
225.72
223.26
213.75
202.08
192.18
172.33
171.05
164.25
164.08
155.69
0.049
0.048
0.046
0.046
0.044
0.041
0.041
0.041
0.041
0.039
0.039
0.037
0.037
0.036
0.035
0.033
0.031
0.028
0.028
0.027
0.027
0.025
0.00
69.94
45.00
46.64
45.57
190.49
141.47
0.00
23.87
3.08
74.20
26.93
33.44
20.50
0.00
5.01
0.00
1.99
3.98
15.33
119.37
94.32
0.00
7.03
0.38
0.13
0.06
1.62
15.21
0.00
0.07
0.03
0.02
0.09
0.01
0.20
0.01
0.10
0.00
0.00
0.00
0.06
0.05
3.40
286.47
194.18
199.62
247.82
187.49
3099.75
100.30
200.48
201.43
282.66
125.58
222.72
147.24
220.92
161.25
217.96
223.47
152.72
151.72
91.47
54.49
67.70
36.22
47.54
7.01
12.06
59.40
451.43
51.68
135.48
16.05
0.60
43.52
19.11
57.33
1.63
74.18
35.92
3.10
18.63
19.21
23.73
7.38
0.39
30.59
18.64
0.70
24.84
23.94
4114.66
30.57
83.92
15.68
55.03
7.53
42.90
12.28
27.33
22.47
56.73
38.72
1.63
3.86
2.42
17.10
12.33
10.84
9.81
33.71
1.57
0.04
627.56
5.00
0.00
23.38
8.86
2.01
0.00
0.00
7.74
0.80
0.02
4.33
0.62
0.00
36.20
0.00
9.00
155
Incl.
No
BANK
142 CREDIT-OPTIMA*
INDUSTRIAL
143
FINANCIAL BANK*
144 PROFINBANK
COMMERSIAL
145
INDUSTRIAL
146 FINEXBANK
147 BANK VELES
SHIDNO148
PROMYSLOVY BANK*
149 RADABANK
150 ZEMELNY CAPITAL
151 TMM-BANK*
152 STOLYTSYA
UKRAINIAN BANK OF
153 RECONSTRUCTION
AND DEVELOPMENT*
154 BANK FAMILNY
142.65
0.023
54.79
0.00
64.99
30.11
Reserve for
loans and
Securities
clients'
arrears
7.24
0.00
137.40
0.022
21.00
0.65
64.20
16.13
10.56
47.28
114.33
0.019
57.99
0.62
4.78
55.67
28.51
25.03
96.89
0.016
60.02
5.71
40.46
3.68
1.62
0.06
93.87
93.27
0.015
0.015
0.00
0.00
0.01
0.00
85.37
112.93
23.36
2.63
14.84
22.28
0.00
0.00
85.02
0.014
19.49
0.20
39.13
21.68
4.99
9.91
75.06
72.72
63.23
55.33
0.012
0.012
0.010
0.009
20.00
0.00
0.00
0.00
0.90
0.00
0.00
0.02
60.40
46.30
50.85
59.06
1.13
18.84
22.72
39.37
5.56
5.75
10.34
43.08
0.00
13.33
0.00
0.00
53.23
0.009
40.00
0.25
9.65
1.02
0.17
2.97
32.61
0.005
0.00
0.01
0.39
30.59
10.22
11.87
LIP**
Share
(%)
Reserve Loans for
Interbank
Loans for
loans***
individuals
arrears
***
156
Annex 45: Interviews with banks
Interview on March 28, 2011 with Sergei Hudiyash, Head of Department for working with the IFIs.
Per bank’s representative, the bank does not lend to SME nor to physical entities for residential EE
investment. The bank’s primary focus is work with large clients, since this is a general policy of
bank’s work.
However, the official site of the bank (http://www.eximb.com) provides information on broad
spectrum of loans that the bank offers to SME and private clients. The choice of the financial
products is quite similar to the ones that are now offered by other banks:
1)
for private clients there are mortgages available for purchase of apartment or a house; loans for
purchase of transport vehicles and credit lines.
for SME the bank offers mortgage loans, loans for business development, for replacement of
outdated equipment, and credit lines.
2)
I the table below there is a summary of the interest rates offered to SME as of Nov 2, 2010.
Interest rates to SME as of Nov 11, 2010
Currency
Interest rates, %
Lending product "Commercial mortgage"
UAH
from 16.60
USD
from 9.00
EURO
from 8.10
Lending product "Transportation vehicle"
UAH
from 16.60
USD
from 9.00
EURO
from 8.10
Lending product "Business development"
UAH
from 15.40
USD
from 7.30
EURO
from 7.30
Lending product "Equipment and machinery"
UAH
from 16.60
USD
from 9.00
EURO
from 8.10
Lending product "Overdraft"
UAH
from 18.30
USD
from 10.20
EURO
from 9.20
Source: http://www.eximb.com/ukr/sme/loans/conditions/
157
As stated by the bank representative in the interview, the bank has no interest in pursuing its business
in residential EE by designing financial products to residents, CAs or SME, since it is not in the
policy of the bank.
RAIFFEISEN BANK AVAL
Meeting on March 23, 2011
The following representatives of the bank took part in the meetings:
Evgeniy
DEMYANOV
Director of the Products and Marketing for Private
Clients Department
Andrey
GIDULYAN
Head of Micro Business Processes and Products
Department
Vitaly
KYSLENKO
Director of the State Sector and Trade Finance
Department
Tetyana
KORGAN
Head of Public and Municipal Sector Department
Bank has no products specially designed for investing into EE in general, nor in EE in residential
buildings. In 2008, the Bank ceased most of its lending activity in municipal and private sectors.
For Micro and Small Business sector the bank offers very limited number of financial products:




Standard overdraft - up to one year, at 20% annual interest rate
Investment loan for purchase of equipment
Investment loan for purchase of transportation vehicle
Non collaterized loan for business development – up to 7 years, maximum amount 100
thousand UAH, 30% annual interest rate.
Investment loan for purchase of equipment can be used for:




Purchase of equipment - new, or the one that is used
Modernization or reconstruction of equipment
Purchase of special vehicles
Business development
Standard conditions:
1.
2.
3.
4.
5.
6.
Term of lending 6 months – 5 years
in UAH
Maximum loan amount: EUR 100 000 (in UAH equivalent)
One time commission: 0.99%
First contribution: from 35% (if lending is above 12 months)
Collateral: • Property, which is purchased for loan amount or any other liquid property;
• Deposit
Currency
UAH
Clients with turnover up to EUR
1 000 000
from 20%
Clients with turnover above EUR
1 000 000
from 18.5%
158
Max
credit line
amount
Up to 100 000 euro(equivalent in uah)
Up to 1.5 mln euro (equivalent in
uah)
The Bank has clients in the M&SB sectors, but there are no specific purchases of EE equipment or
any other similar to it. Among clients there are housing and maintenance companies which do not
borrow for investment.
Since April, 2011 the Bank plans to renew its lending to private clients by offering two products:


Loan for purchase of housing for living
Loan for repairs
At the end of the year, the bank’s lending portfolio to private clients was:
2009 - UAH 22.5 billion
2010 - UAH 19.2 billion
Loan for repairs collaterized by the residential mortgage
Standard conditions:






Term of lending up 15 years
Maximum loan amount: EUR 100 000 (in UAH equivalent)
Annual 16-17% in UAH (fixed rate for the year and adjusted after that)
No requirement of the first payment
Annuity repayment
Collateral: residential premise
Private clients’ department in principle does not see a problem of lending to individual homeowners
if residential property is used as collateral. No other collateral so far is viewed as acceptable for the
bank.
The Bank has the following concerns for getting into residential EE market:








It is treated as consumer lending since OSBB (CA) is not treated as a viable borrower;
CA is not treated as a viable borrower because the law does not give clear procedure on
collecting debts by the CA from the individual owners;
Simple investment pay back period exceed 5 years, while the bank has no long term capital in
hryvna;
The payback of the EE project may increase with the cost of lending, which should be affected
by inflation that is projected to be 1% per month;
Residential EE in multi-storied apartments is perceived to be a social project, which has to be
supported by state and developed by state; Since flat owners have very different income in one
building, low income residents may be an obstacle for EE investment; pensioners are viewed as
the group that does not care about investment at all; so it is expected that this sector may offer
very low profit;
Development of the market should be supported by state through state banks (referred to
Ukrexim, Kyiv, Savingsbank, Ukrgasbank) because the state banks have an opportunity for
exchanging debt to securities
Tariffs for housing and communal services are unpredictable;
The bank has no desire in developing a market that has low profits while there are sector that
can bring high returns;
159
With respect to working with the CAs Private Client department:




would be interested in developing a product for marketing to the CAs;
does not see a problem of having to deal with 100s of individual homeowners in the building;
see as possible problem for implementation a situation when CA votes for EE measures, but
only certain percentage of owners is eligible for getting a loan backed by the residential
mortgage (e.g. families with small children, non proper documentation etc), so it will have to be
decided by the CA how to finance the total investment amount; the bank believes that in this
situation it is possible to offer up front payment by the owners.
would be able to consider CA as a client if the law defined clear mechanisms for repayment of
liabilities by the individual homeowners to the CA.
The Bank would be interested in:


considering penetrating EE market with leasing products, e.g. the bank has Raiffeisen Bank
Aval Leasing which is the 3rd larges in Ukraine (as cited by the bank representatives). But
currently they finance only those objects which can be easily returned; with the boilers etc it is
not clear how to behave.
Testing a demo project in public buildings EE.
ALFA BANK
Andrey Repko, Head of SME Products Department took part in the meeting.
buildings. EE in general is not spelled out as a priority in the bank’s policy. For SME the bank offers
commercial loan (business loan), micro-loan (including non collaterised one), and some
products.
The purpose of the loans includes purchase of additional equipment, transport etc.
Information that provided by A. Repko somewhat varies from the info that is available on the
official site of the bank. However, in general, the bank offers to SME loans up to 5 years starting
from 150 thousand UAH - to 8 million UAH at 21-22% per annum. If the amount is lower than
that – 35% per annum.
Key criteria for issuing a loan is creditworthiness of the borrower and adequacy of the collateral.
The latter should be liquid. If the loan amount is 2 million UAH, the required collateral should be
2.8 million in order to meet NBUs requirement for reserving. They have a practice of accepting
accounts receivable as a form of collateral while it has been so far accepted by the bank when
there are receivables of the big companies as METRO, Toyota, Kyivstar (mobile phone operator).
The projects which the borrowers finance may include the ones which are aimed at optimization of
business costs, including energy efficiency. But the projects are not analysed for engineering
viability, common sense is applied for judgment on the project’s viability.
Non collaterised loans are available maximum for 50 thousand UAH with interest rate per annum 3560%.
The bank has no clients who operate under EPC. In general, the idea of repayment with savings is
acceptable by the bank for considering funding, but the bank would require at least 50/50 funding of
it with the loan and contributed by the borrower money. In principle it is viewed that a variety of
possible arrangements exists.
160
The Bank has the following concerns for getting into residential EE market:






The market is considered to be small – for 12000 of the CAs, it seems to be unreasonable to
develop a product;
It should be a role of the state to develop a market, while it is easier for the bank to work with
commercial companies;
The bank is looking for profit and not on developing of the market;
The state should develop standard projects for typical buildings (of certain construction types)
and offer a whole package of documentation that needs to be agreed upon with various state
bodies for implementing such projects;
The law should give a clear answer on what to do if individual owners do not pay or how to
divert the payments of the CA to bank in case of non payment;
The bank has no resources in UAH for 10 years.
The bank does not see a problem of lending to the individual borrowers in the multi-flat building if at
least 70 owners out of 80 (in a standard multi flat house) were to give their passports to the bank for
verification of their.
Leasing of EE equipment might be an interesting tool for offering because leasing can be organized in
hard currency.
UKRSIBBANK
Eugene Burlachenko, Deputy Head of territorial Division of Kyiv.
buildings.
Lending activity of the bank was practically ceased over 2008-2010. It renewed in January 2010.
For physical enteritis the bank offers mortgage lending up to 5 years at 19.9% per annum and from 5
to 15 years at 17.9 % per annum. Lending pre payment conditions depend on the type of housing that
is purchased.
There is also lending to physical entities with collateral being either individual apartments in the
multi-apartment buildings or individual house with adjacent territory. The purpose of lending
may be to fund all kinds of consumer needs – for repairs, for education, treatment etc.
For SME the bank offers commercial loan (business loan), micro-loan (including non collaterised
one), and some products. The borrower should be over 25 and no more than 60 when the loan has to
be rapid. The borrower has to have a permanent place of work and legal income. Such borrowers are
possible employees of Ukrsibbank, employees of the corporate clients of the bank, or SME clients,
who get officially salary; and top managers of the state companies. The term of the loan can be up to
7 years, with the value that is not exceeding 50% of the cost of property. There is a commission for
issuing a loan. In principle, this type of lending can be provided for any of the EE measures in the
building.
There is a financial product which bank offers to its corporate clients that are supplying valuable
goods for personal use (bank did not mention his clients of this product). The bank concludes a
contract with such client and with the person who buys such goods from the corporate client. A
person repays the cost of the valuable good over a specified period of time with the collateral of the
good itself. While the corporate client gets the payment from the bank immediately. Such type of
lending potentially can be offered by the bank to the producers of EE equipment. Estimated cost of
such lending is about 36% in national currency per year. But the terms will be negotiated in each
161
individual case. For the producers of materials, it is in principle possible to offer such lending, but
again, the terms have to be clarified in each individual situation.
The Bank does not offer lending the CAs at the moment because the legal status of the entity is not
clear to the bank. CAs have not been at all considered as borrowers.
BANK FORUM Commerzbank Group
Meeting on April 7, 2011 with Sergei Boiko, Head of Small and Micro Business
Loans to private clients are quite standard and include loans for repairs of housing. According to
the site info the terms are as following: http://www.forum.com.ua
Max amount of
lending:
Up to 50% of the value of
real estate
Max term of
lending:
5 years
Currency:
UAH
% rate:
(effective of
20.01.2011)
18.75% per annum
Amount of
loan:
From UAH 50 000 to UAH
300 000
Commission:
From 2% of loan amount
For SME a bank offers also standard set of lending products: overdraft, loan for operating
activity (purchase of raw materials, goods, etc.), credit line, investment credit.
As a form of guarantee the following collaterals can be accepted:




Movable and immovable assets;
Property rights;
Cash, deposited with BANK Forum by private of legal entities;
Pledge, guarantees of physical and legal entities.
Investment credit is offered for carrying out construction, reconstruction, modernization and purchase
of equipment, real estate, implementing of new technologies and other capital assets, under condition
that borrowers’ up front contribution is no less than 30% of the project value.
The bank has reorganized recently its corporate clients division into corporate clients, SME and micro
businesses. So, there are no internal policies and rules available for responding about lending on EE
in residential buildings.
The bank is very interested in developing programs with EBRD on energy efficiency. But only in
May the bank will be able to answer the question on the internal obstacles they have for lending to
co-owners of multi-flat buildings. Currently, as the bank’s representative said, the bank does not
know if there are any internal obstacles for such lending.
162
Today the bank can lend to individual home owners who reside in individual housing for energy
efficiency as lending for repairs.
163
Annex 46: Detailed Description of Legal and Regulatory Norms
for Provision of Housing and Communal Services
1.
Definition of housing and communal services
In accordance with the Ukrainian legislation, housing and communal services are the result of
economic activity aimed at providing for conditions of persons' residence and stay in residential
and non-residential premises, houses and buildings, complexes of houses and buildings, in
accordance with norms, regulations, standards, procedures and rules. The law of Ukraine "On
Housing and Communal Services" divides all housing and communal services by their functional
classification and the procedure of setting prices/tariffs. Thus, depending on the functional
classification, housing and communal services are divided into:
5) Communal services, which include centralized cold and hot water supply, sewage, gasand electric power supply, centralized heating as well as household solid waste disposal,
etc.;
6) Services on maintenance of houses and buildings and adjacent territories: cleaning
internal house premises and the adjacent territory, sanitary and technical service,
maintenance of internal house networks, maintenance of elevators, illumination of
common use areas, maintenance repair, household solid waste disposal, etc.;
7) Services on management of the house, building or group of houses: balance sheet
holding, conclusion of agreements for performance of services, control over
implementation of the agreement's provisions, etc.;
8) Services on repair of premises, houses, buildings, including replacement and
fortification of constructions and networks elements, their reconstruction, renewal of the
bearing capacity of bearing elements of constructions, etc.
Tentative lists of housing and communal services and their composition depending on the
functional classification are defined by the central executive body in the housing and communal
economy. Thus, for example, the Cabinet of Ministers of Ukraine ratified the tentative list of
services on maintenance of houses and buildings.
Depending on the procedure of setting prices/tariffs on housing and communal services, they
are divided into three groups:
1) The first group includes housing and communal services, prices/tariffs for which are set
by specially authorized central executive bodies;
2) The second group includes housing and communal services, price/tariffs for which are
set by local self-government bodies for their provision on the respective territory;
3) The third group includes housing and communal services, price/tariffs for which are set
exceptionally under the contract (agreement among the parties).
Prices/tariffs for communal services and services on maintenance of houses and buildings and
adjacent territories are formed and set by executive bodies and local self-government bodies in
accordance with their authority stipulated by the law.
Provision of housing and communal services is subject to normative regulation on the part of
central and local executive bodies and local self-government bodies within the limits of their
authority pursuant to the legislation. The latter develop and approve standards, regulations,
norms, procedures and rules in the field of housing and communal services.
The respective standards, regulations, norms and rules must create a complex of qualitative
and quantitative indicators and requirements regulating production and performance of housing
164
and communal services taking into account social, economic, natural climatic and other
conditions of regions and settlements.
The legislation also sets minimal norms of housing and communal services. It is done for the
purpose of ensuring sanitary and hygienic requirements for residence of people and their stay in
premises, providing for technical requirements to house (building) operation, support of the
bearing capacity of constructions and operating characteristics of internal house networks and
systems.
Minimal norms of housing and communal services define the minimal list, minimal requirements
to the amount and quality of housing and communal services are to be adopted by the Cabinet
of Ministers of Ukraine. Thus, the list of minimally required housing and communal services
cannot include the services prices/tariffs for which are defined exceptionally based on the
contract (the agreement among the parties).
Until now there is no list of minimally required housing and communal services in Ukraine. The
Cabinet of Ministers of Ukraine approved only the Typical list of services on maintenance of
houses and buildings and adjacent territories and delegates to local executive authorities and
local self-government bodies the opportunity to set temporary norms of consumption of housing
and communal services of the II group (cold and hot water, centralized heating, household
waste transportation), norms of services' quality and modes of their provision taking into
account economic capacities of housing and communal economy enterprises, climate and other
local conditions.
But in any case, in accordance with the law, the procedure of providing housing and communal
services, their qualitative and quantitative indicators must meet conditions of the agreement on
providing for housing and communal services and requirements of the legislation.
User has to obtain communal services in an uninterrupted way, except for the time of
interruptions for:
 Realization of repair and prophylactic work by the provider/producer under the schedule
coordinated with executive bodies of local councils or local state administrations
pursuant to operating construction norms and rules, rules of technical operation and use,
regulations on realization of maintenance and major repairs and other regulatory
documents;
 Period between heating periods for heating systems, the decision on the beginning and
ending of which is made by executive bodies of respective local councils or local state
administrations based on climatic conditions, pursuant to operating construction norms
and rules, technical operation rules and other regulatory documents;
 Liquidation of consequences connected with force-major situations.
In the case of application of an interruption in services provision, the provider/producer is
obliged to notify the user via mass media about such interruption no later than 10 days before
(except for the interruption arising as a result of a failure or force-major situations). In the
notification, it is necessary to indicate the reasons and term of the interruption in provision of the
respective services. In the case of exceeding the normatively set terms, except for force-major
circumstances, the provider/producer will be liable pursuant to the law.
Local executive authorities or local self-government bodies according to the procedure set by
the Cabinet of Ministers of Ukraine are authorized to temporally determine other norms of
consumption, quality and modes of providing housing and communal services taking into
account economic capacities of enterprises, climatic and other local conditions. The action term
of the decision on limitation of other parameters and norms, modes of housing and communal
services provision cannot exceed one year.
165
Who and how provides housing and communal services
All subjects of economic activity that work in the field of housing and communal services
provision in the Ukrainian legislation are divided into producers and providers of such services.
The producer is the subject of economic activity that produces or creates housing and
communal services. The provider is the subject of economic activity whose activity is provision
of housing and communal services to the user in accordance with an agreement provisions.
Thus, the producer of services can be simultaneously their provider.
All relations regarding provision of housing and communal services in accordance with the
legislation must be formed exceptionally on contractual bases. Accordingly, participants of such
relations in the field of housing and communal services are their user and provider.
Each of these subjects has respective rights and duties in the field of housing and communal
services provision.
The Law of Ukraine “On Housing and Communal Services”, the ensures user the right to:
 Receive in good time and in the proper quality housing and communal services pursuant
to the legislation and provisions of the agreement for provision of housing and
communal services;
 Receive according to the procedure set by the legislation necessary information about
the list of housing and communal services, their cost, the total amount of monthly fee,
structure of the price/tariff, consumption norms, procedure of provision of housing and
communal services, their customer properties, etc.;
 Compensation of damages inflicted to his/her property and/or premises, harm caused to
his/her life or health as a result of improper provision or non-provision of housing and
communal services;
 Removal during the term set by the agreement or legislation of revealed failures in
provision of housing and communal services;
 Reduction of the amount of fee for services provided in the case of their non-provision or
provision not in full, reduction of their quality in accordance with the procedure set by the
agreement or legislation;
 Non-payment of the cost of housing and communal services for the period of temporary
absence of the user or/and his/her family members at the proper documentary
registration, as well as for the period of actual absence of housing and communal
services set in the agreement according to the procedure set by the Cabinet of Ministers
of Ukraine;
 Receive from the provider compensation at the rate set in the agreement, by a court
ruling or legislation for exceeding normative terms of conducting failure and repair work;
 Check the amount and quality of housing and communal services according to the
procedure set by the Cabinet of Ministers of Ukraine, etc.
At the same time, the user is obliged to:
 Conclude an agreement for provision of housing and communal services drafted by the
provider on the basis of the typical agreement;
 Timely apply measures for removal of revealed defects related to receipt of housing and
communal services that arose up because of his/her own fault;
 Provide for integrity of communal services measuring devices and not to interfere in their
work;
 Repair and change sanitary and technical devices and devices, equipment that broke
down due to his/her fault at his/her own expense;
 Pay for housing and communal services within the terms set by the agreement or law;
166
 Follow fire safety and gas safety rules, sanitary norms;
 Admit to premises, houses and buildings representatives of the provider/producer
according to the procedure set by the law and the agreement for liquidation of failures,
removal of defects of sanitary technical and engineering equipment, its installation and
replacement, realization of technical and prophylactic inspections and verification of
measuring devices' indications;
 Adhere to requirements of the housing and town-planning legislation regarding
realization of repair or reconstruction of premises or their parts, not to allow violation of
legal right and interests of other participants of relations in the field of housing and
communal services;
 Timely conduct preparation of the residential house, apartment (in which he/she lives or
which belongs to him/her under the property right) and its technical equipping for
operation in the fall/winter period;
 Pay the fine in the amount set by the law or the agreement in the case of untimely
payments for housing and communal services to.
Rights and duties of the provider and producer of services are also defined by the Law of
Ukraine "On Housing and Communal Services" and spelled out in the Exhibit A:
Exhibit A: Rights and duties of providers and producers of communal services
Provider
Producer
The provider has the right to:
The producer has the right to:
- develop and submit for approval calculations
regarding the level of prices/tariffs on housing and
communal services of the first and second groups
according to the procedure set by the legislation;
- develop and submit for approval calculations
regarding the level of prices/tariffs on housing
and communal services of the first and second
groups;
- offer at conclusion of the agreement prices/tariffs on
housing and communal services of the third group;
- offer at conclusion of the agreement
prices/tariffs on housing and communal services
of the third group;
- take part in competitions for acquisition of the right to
perform housing and communal services in a certain
territory;
- require from the user observance of operation rules
requirements for residential premises and the adjacent
territory, sanitary and hygienic and fire-prevention
rules and other regulatory and legal acts in the field of
housing and communal services;
- require from the user timely realization of works in
relation to removal of defects discovered related to
receipt of housing and communal services that arose
due to a fault of the user, or compensation of the cost
of this work;
- receive compensation for privileges provided in
accordance with the law to separate categories of
citizens and charged subsidies for payment of housing
and communal services and to repay them in the case
of non-provision of such services or privileges;
- sign agreements with local self-government
bodies for production and creation of housing and
communal services;
- request timely and full payment of services
provided from providers;
- take part in competitions for acquisition of the
right to perform housing and communal services
in a certain territory;
- issue permits and technical terms for
connecting users to respective centralized
engineering networks according to the procedure
set by the legislation;
- receive information about local programs of the
housing and communal economy development
and other sector programs for respective
territories;
- compensation of losses in the case of adoption
167
Provider
- compensation of losses in the case of adoption by
the respective local self-government body of
prices/tariffs lower than the amount of economically
substantiated costs of their production;
Producer
by the respective local self-government body of
prices/tariffs lower than the amount of
economically substantiated costs of their
production.
- access to apartments, houses and buildings for
liquidation of failures, removal of defects of sanitary
technical and engineering equipment, its installation
and replacement, realization of technical and
prophylactic inspection and verification of measuring
devices' indications in accordance with the procedure
stipulated by the law and the agreement.
The provider is obliged to:
The producer is obliged to:
- provide for timeliness and proper quality of housing
and communal services pursuant to the legislation and
provisions of the agreement, including by creation of
quality control systems in accordance with national or
international standards;
- sign an agreement with the provider (the user)
on the terms of housing and communal services
provision;
- carry out control over the technical condition of
engineering equipment of houses, apartments,
premises;
- draft and sign with the user the agreement for
housing and communal services provision with
definition of liability for observance of its provisions'
implementation pursuant to the typical agreement;
- provide according to the procedure set by the
legislation necessary information about the list of
housing and communal services, their cost, total
amount of the monthly fee, the structure of
prices/tariffs, consumption norms, mode of housing
and communal services provision, their customer
properties, etc.;
- timely conduct preparation of the residential house
and its technical equipment for operation in the
fall/winter period;
- consider within the term set by the legislation users'
claims and complaints and to conduct respective recalculation of the amount of fee for housing and
communal services in the case of their non-provision
or provision not in full, deterioration of their quality;
- produce housing and communal services in
accordance with provisions of the agreement,
standards, norms, regulations and rules;
- conduct in accordance with the procedure set
by the Cabinet of Ministers of Ukraine respective
recalculation of the amount of the fee for
housing and communal services in the case of
their non-provision or provision not in full,
deterioration of their quality;
- implement energy-efficiency and innovatory
technologies of housing and communal services
production;
- carry out technological accounting of material
and power resources;
- provide according to the procedure set by the
legislation necessary information about the list
of housing and communal services, their cost,
total amount of the monthly fee, the structure of
tariffs, consumption norms, mode of housing
and communal services provision, their
customer properties, etc.
- keep in proper technical condition, to carry out
technical maintenance and repair of internal house
networks, to apply measures for liquidation of
emergency situations, removal of services quality
168
Provider
Producer
violations within the terms set by the agreement and/or
the legislation
- pay to the user compensation for exceeding the set
terms of realization of emergency and repair work in
the amount set by the agreement or legislation;
- register requirements (claims) of users in connection
with violation of the procedure of housing and
communal services provision, change of their
customer properties and exceeding of the terms of
emergency and repair work;
- timely and in good time at its own expense conduct
work for removal of revealed defects related to receipt
of housing and communal services arising due to its
fault.
2 Agreements in housing and communal sphere
Relations in the housing and communal sphere are built exceptionally on contractual relations.
At the same time, the legislation regulates such relations by setting requirements regarding
development and approval of tariffs, quality of services, as well as approval of typical
agreements for provision of the respective services.
Agreement between the provider/producer and the user of housing and communal
services
Substantial provisions of the agreement regarding provision of housing and communal
services are data on parties to the agreement, services to be provided and their respective
costs, payment terms and procedures, rights and duties of each party and all other general
and special conditions
Except for the substantial provisions, the agreement may also contain other terms based on
agreement of the parties.
An agreement for provision of housing and communal services comes into effect from the
moment of its signing. In the case the provider is not the same as a producer, relations
between these parties are regulated by a separate agreement issued in accordance with the
above-mentioned provisions.
The procedure of coordinating the agreement takes place during one month from the day of
draft agreement submission by one of the parties.
The above-mentioned requirements regarding substantial provisions of the agreement for
provision of housing and communal services are applied to all types of agreements in the field
of housing and communal services.
Agreement for provision of the services of maintenance of houses and buildings and
adjacent territories
The Procedure for Tariff Setting on services on maintenance of houses and buildings and
adjacent territories and the Typical Agreement for provision of services on maintenance of
houses and buildings and adjacent territories is approved by the Decree of the Cabinet of
169
Ministers of Ukraine of 20.05.209 No. 529, which define the mechanism of forming tariffs on
services on maintenance of houses and buildings and adjacent territories. This Procedure is
extended to all economic entities providing services, economic entities providing separate
services subject to subcontract agreements with providers, local self-government bodies,
owners of residential houses, owners (tenants) of apartments, owners of non-residential
premises in residential houses.
Tariffs are calculated separately for every house depending on the planned quantitative
indicators of actual provision of services taking into account proper sanitary and hygienic, fireprevention, technical status of houses and buildings and adjacent territories in view of the
typical list of services regarding maintenance of houses and buildings and adjacent territories.
The services are provided in accordance with the tariff approved by the local self-government
body, its structure, frequency and terms of services provision. It should be noted that a copy of
such decision is an inalienable part of the agreement for services provision.
In accordance with the abovementioned Procedure, when setting the tariff for services it is
necessary to provide for transparency of defining the cost of all services calculated per 1 sq.
meter of the total floor space of the apartment, residential premises in a dormitory and nonresidential premises in residential house.
The Typical Agreement for provision of services regarding maintenance of houses and
buildings and adjacent territories is adopted with the same Procedure, the terms of which must
be followed by participants of housing and communal relations.
The typical agreement for provision of the services of maintenance of houses and buildings
and adjacent territories must include subject of the agreement, payment for services used,
rights and duties of the parties, liability of the parties, the procedure of disputes resolution,
force-majeure circumstances, validity term of the agreement and other general and special
terms and conditions, as required.
Determination of the provider of housing and communal services in houses of state and
communal property takes place based on competitive principles. The procedure of preparation
and realization of such competition is regulated by the Procedure of realization of the
competition for housing and communal services provision ratified with Resolution of the
Cabinet of Ministers of Ukraine of 21.07.2005 No. 631.
During realization of activity related to housing and communal services provision, it is
necessary to take into consideration the Exemplary List of services regarding maintenance of
houses and buildings and adjacent territories and services regarding repair of apartments,
houses, buildings ratified with the Order of the State Committee of Ukraine for the housing and
communal economy of 10.08.2004 No. 150.
The agreement on provision of services of district heating, cold and hot water supply,
and wastewater collection
Relations between the subject of economic activity the activity of which is housing and
communal services provision and the individual or the legal entity that receives the centralized
heating, cold and hot water-supply and sewage services are regulated by the Rules of
centralized heating, cold and hot water-supply and sewage services provision and the typical
agreement on provision of centralized heating, cold and hot water-supply and sewage
services adopted with Resolution of the Cabinet of Ministers of Ukraine of 21.07.2005 No.
630. Pursuant to the Rules, the services must meet:
 Centralized cold and hot water-supply – requirements regarding the quality and
pressure of water, temperature of hot water, as well as calculations norms of water use
in the analysis point;
170
 Centralized heating – the normative air temperature of in premises of the apartment (a
farmstead house) under the condition of their insulation by users and use by the owner
(balance holder) of the house and/or provider of insulation measures actions for
warming joint use places in the house;
 Centralized sewage – norms of sewage of flow water under the condition of
maintaining the proper condition of premises of the house and the adjacent territory.
Local executive authorities and local self-government bodies are authorized to temporally
determine other consumption norms, quantitative and qualitative indicators and modes of
services provision in accordance with the procedure defined by the Cabinet of Ministers of
Ukraine.
In accordance with the abovementioned Rules, the list of services provided for the user
depends on the level of equipping of the respective house.
Centralized heating, cold and hot water-supply, and sewage services are provided to the user
pursuant to the agreement, which is issued based on the typical agreement for provision of
centralized heating, cold and hot water-supply and sewage services.
Based on the agreement for provision of centralized heating, cold and hot water-supply and
sewage services, the provider is obliged to timely provide the user with centralized heating,
cold and hot water-supply and sewage services of the proper quality, and the user is obliged
to timely pay for the services provided under the tariffs set in terms and subject to provisions
of the agreement.

The typical (standard) agreement for provision of centralized heating, cold and hot
water-supply and sewage services is similar to the previous contracts and must
contain all required information, such as parties to the agreement, service to be
provided, payment type and schedule, and other general and special conditions.
Energy supply contract
Requirements to the energy supply contract are stipulated in the Economic Code of Ukraine
(hereinafter – the ECU). In accordance with article 275, under the energy supply contract the
power-supply enterprise (power supplier) provides electric power, steam, hot and heated
water (hereinafter – the power) to the user (subscriber), which is obliged to pay for the power
received and to adhere to the regime of its use envisaged by the agreement, as well as to
provide for safe operation of power equipment used by him/her.
Provision of power without issuance of the energy supply contract is prohibited.
The subject of the energy supply contract is specific types of power with description stipulated
in state standards or technical terms.
The producers and suppliers of power which have monopolistic position, in particular natural
monopolies, are obliged to sign the energy supply contract upon the request of the users who
have the technical means for receiving power.
Power-supply enterprises of forms of ownership other than state and communal one can take
part in providing power for any users, including through the state (communal) power network
subject to conditions stipulated in respective agreements.
According to article 276 of the ECU, the total amount of power supplied is defined based on
consensus of the parties. If the power is provided on account of the order for priority state
needs (the limit), the power-supplier does not have the right to reduce this limit for the
subscriber without the latter's consent.
Suggestions of the subscriber regarding the amount and types of power, terms of its provision
are priority ones, provided the power-supplier has the production capacity.
171
Power quality indicators are coordinated by the parties on the basis of state standards or
technical terms by approved of the list (amount) of indicators, observance of which is a duty of
parties under the agreement.
The terms of power-supply are set by the parties in the agreement, as a rule, based on the
necessity of providing for its in-time and trouble-free supply to the subscriber. The ten-day
period is the basic registration period for power-supply, with volumes correction during the
day. The parties can coordinate power-supply during the day by hours, as well as the time and
duration of maximum and minimum loads.
The amount of power that is not received in the previous periods due to a fault of the powersupplier is to be replenished upon the subscriber's request. If the power was not used by the
subscriber or not received in the proper amount for heating in connection with favorable
weather conditions, replenishment of power not received in the proper amount is carried out
upon consensus of the parties.
Settlements under energy supply contracts are carried out on the basis of prices (tariffs) set in
accordance with provisions of the law.
Payment for power provided is carried out, as a rule, in the form of prepayment. Based on
consensus of the parties, planned payments with further revision, or payment for actually
supplied power can be used.
In the case a subscriber has his/her own power-source and supplies power into the powersupplier's network, settlements based on the balance of mutually obtained power are allowed.
The subscriber is authorized to supply energy to the secondary users connected to his/her
networks (sub-subscribers). In this case, sub-subscribers sign a energy supply contract with
the subscriber and have the rights and duties of a subscriber, while the subscriber has rights
and duties of the power-supplier.
In this case, the subscriber is obliged to report on the list of sub-subscribers to the powersupplier, which has the right to control power-networks and devices of sub-subscribers and
the right to control sub-subscribers' observance of rules of using power.
The mechanism of forming tariffs on production, transporting, supply of thermal energy by
enterprises of the heating sphere and centralized heating, cold and hot water-supply services
provision are defined by the Procedure of setting tariffs on production, transporting, supply of
thermal energy and centralized heating, cold and hot water-supply services ratified with
Resolution of the Cabinet of Ministers of Ukraine of 10.07.2006 No. 955.
In accordance with the Procedure, tariffs setting by enterprises carrying out production,
transporting and supply of thermal energy is carried out in accordance with the annual plans of
production, transporting and supply of thermal power, economically substantiated planned
costs defined on the basis of state norms of use of resources, feasibility calculations and
estimates, rates of taxes and fees (mandatory payments) and prices in the planned period
defined on the basis of forecasted indicators of prices of industrial products manufacturers.
Agreement on providing gas-supply services for population
Relations among gas-supplying enterprises, gas-distributing enterprises and individuals (the
population) - gas users are regulated by the Rules approved by the Decree of the Cabinet of
Ministers of Ukraine "On Approval of the Rules of Providing Population with Gas-Supply
Services" of 09.12.1999 No. 2246.
In accordance with the Rules, the provider is the enterprise that executes gas-supply work
and/or provides gas-supply services.
172
Gas-supplying is the service that envisages realization of natural or liquefied gas by
transporting it to the user. Gas-supply to the user is carried out by a gas-supply enterprise that
has the respective license. Gas-supplying is carried out on the basis of an agreement between
the user and the gas-supplying enterprise.
Transporting of gas of a gas-supplying enterprise to the user and proving him/her with
technical maintenance and gas pipelines and house gas-supplying systems repair services on
the basis of the respective license are carried out by a gas-distributing enterprise – an
enterprise operating gas-supply systems buildings and gas pipelines
The user is an individual (population) to whom gas-supply services for household needs
(cooking meal, warming water and heating premises) are provided in accordance with the
agreement.
Gas-supply services are provided for the user on the basis of the agreement signed by
him/her in accordance with the typical agreement approved with Resolution of the Cabinet of
Ministers of Ukraine "On Approval of the Typical Agreement for Provision of Population with
Gas-Supply Services and Amending Resolution of the Cabinet of Ministers of Ukraine of
December, 9, 1999 No. 2246" of July, 5, 2006 No. 938.
Under the agreement for providing population with gas-supply services, the provider is obliged
to continuously provide the user, his/her family members and other persons registered in the
apartment, private house the services of supplying natural or liquefied gas from group
reservoirs for household needs with a guaranteed reliability, safety, quality levels and pressure
rate, while the user is obliged to timely pay for the services provided under the set tariffs
(prices) within the terms and subject to provisions stipulated in this agreement.
The provider offers the services of supplying natural or liquefied gas and maintenance and
repair of house gas-supply systems and court gas pipelines. In addition, in the agreement for
providing population with gas-supply services, it is necessary to indicate volumes, regime and
quantity of services provided and their costs. It should be noted that the retail price on natural
gas is set by the NERC. The price on liquefied gas supplied from group reservoirs is regulated
(set) by the Council of Ministers of the Autonomous Republic Crimea, regional, Kyiv and
Sevastopol city state administrations).
Agreement for provision of household waste transportation services
The procedure of signing the Agreement for provision of household waste transportation
services is regulated by Resolution of the Cabinet of Ministers of Ukraine "On Approval of the
Rules of Household Waste Transportation Services" of December, 10, 2008 No.1070. The
Rules determine the mechanism of provision by subjects of economic activity regardless of
their form of ownership of household waste transportation services in cities, settlements and
villages. Besides, this Resolution sets requirements to the Typical Agreement for provision of
household waste transportation services.
The agreement for provision of household waste transportation services is signed between the
owner of the apartment, the tenant or lodger and the balance-holder or a person authorized by
him/her.
If the balance-holder is not the services provider, the services provision agreement is signed
between the balance-holder and the services provider. The services provider is determined:
 For objects in public and communal domain – based on the result of the competition
that is conducted in accordance with the Procedure approved with Resolution of the
Cabinet of Ministers of Ukraine of July, 21, 2005 No. 631;
173
 For residential houses in private property – by the local self-government body, except
for the cases when owners of the houses expressed their desire to determine the
services provider independently.
The volume of services provided is calculated on the basis of norms ratified by the local selfgovernment body.
Under the agreement for provision of household waste transportation services, the provider is
obligated pursuant to the schedule to provide household waste transportation services, and
the user is obliged to timely pay for the services under the set tariffs in terms and subject to
the conditions stipulated in this agreement
The provider provides the user with solid, large, repairs and liquid waste transportation
services.
Resolution of the Cabinet of Ministers of Ukraine "On Approval of the Procedure of Setting
Tariffs on Household Waste Transportation Services" of 26.07.2006 No. 1010 sets the
mechanism of forming of tariffs on household waste transportation services.
The services of transporting household waste include household waste handling operations
(collection, storage, transportation, processing, utilization, making harmless and burial), which
are carried out in a settlement pursuant to the amenities rules ratified by the local selfgovernment body.
Formation of tariffs on such services by the enterprise is carried out in accordance with annual
plans of services provision and economically substantiated planned costs defined on the basis
of state norms of use of resources, feasibility calculations and estimates, rates of taxes and
fees (mandatory payments) and prices in the planned period defined on the basis of
forecasted indicators of the enterprise's prices.
In the cases stipulated by legislation, subjects of economic activity intending to produce
(provide) housing and communal services must obtain respective permits, licenses.
Energy supply contract (or contract for supplying energy resources and other
resources via connected network)
Under this type of contract, the provider supplies the consumer with electricity, steam, hot and
superheated water (hereinafter – energy) to consumers (subscribers)72, or other resources73,
which, following the definition in the CCU, include water, and the provider's responsibility stops
at the entrance to the building. Therefore, only investments that are allocated for purchase
and installation of in-building heat, cold and hot water meters can be recovered via the tariff on
the respective energy or other resource. These provisions are stipulated in the procedures of
tariffs setting on thermal energy, water and wastewater collection .
Regarding electricity and gas supply for population in an apartment house, in fact, purchase of
meters should be compensated by the consumer, and the power and gas supplier shall freeof-charge (as defined in paragraph 40 of the Rules of Electricity Supply for Population74 and
paragraph 1.16 of the Rules of Gas Supply for Population75) exercise routine verification,
maintenance and repair of meters (electricity), periodic verification of gas meters, their
maintenance and repair associated with such verification (including removal, transportation
and installation) shall be carried out at the expense of the gas supplying company; offer
72
See art. 275 of the ECU.
73
See art. 54 of the CCU.
74
CM of Ukraine Decree No.1357 of 26.07.1999
75
CM of Ukraine Decree No.2246 of 09.12.1999
174
recommendations on the possibility and feasibility of using electric power for heating, as well
as on energy conservation and power consumption modes.
We should pay particular attention to specific features of use of electric power tariffs for
population residing in apartment buildings and individual ones, as well as in the buildings
where condominium associations (or HCC) have been created, and in the buildings where coowners have not organized the association.
NERC Resolution of 10.03.99 No.309 "On Tariffs of Electric Power Provided for Population
and Settlements" (with further amendments and extensions), and NERC Resolution of
31.07.96 No. 28 "On Approving the Rules of Using of Electric Power (with further amendments
and extensions), allocate such category of consumer as "a settlement".
In practice, NERC and energy supplies include to the category "settlement", among other
things, associations of consumers (population) – condominium associations, HCCs, etc. –
thus artificially separating these associations, which according to the law represent
consumers, from consumers as they are. Given the difference between the tariffs approved by
NERC for population and "settlements", consumers united in condominium associations or
HCCs find themselves in a less advantageous position than consumers who do not create
such associations.
At the same time, the indicated division of consumers and their category "settlement" are not
stipulated either in the Law of Ukraine "On Housing and Communal Services", nor in the Law
of Ukraine "On Electric Power". I.e., the abovementioned NERC regulations in this part do not
meet the higher priority legislative acts.
According to the Resolution of the Cabinet of Ministers of Ukraine "On Approving the Rules of
Using of Electric Power for Population" of 26.07.1999 No.1357, in an apartment house the
energy supply shall execute agreements with each tenant (owner) of apartments. That is, the
energy supplier's costs related to sale of electric power are a part of the tariff.
However, as seen from the table with the list of tariffs set by NERC for households and for
settlements, the tariff on electric power for settlements is higher than the "retail" tariff for the
end user in an apartment house, there has no economic justification.
In this regard and given the need to support establishment and operation of condominium
associations, providing for equal access to electric power services for consumers and energy
efficiency development in buildings, we find it necessary to harmonize regulations of NERC
with current legislation, and when setting tariffs on electric power to include associations of
consumers in housing stock (condominium associations, HCCs) to the "population" category
or to ensure economic feasibility of determining the difference between the tariffs for the
abovementioned groups of consumers.
The second group of contracts described in following text are the contracts with payment for
services paid in addition to the cost of housing and communal services.
Sub contract for capital construction76
Subcontracting relations in capital construction are regulated by chapter 33 of the Economic
Code of Ukraine. It should be noted that legislation does not impose restrictions on definition
76
This section is partly based on materials of the report on the research project "Development of Methodological
Guidance for Organizing the First Capital Repair of an Apartment Building by Its Owners, Co-Owners and the State
through the Co-Financing Mechanism (final), 2010" prepared by LLC "MDI" under the contract with the Ministry of
Housing and Communal Economy of Ukraine.
.
175
by the parties of settlement conditions under the capital construction subcontract. Thus, the
parties themselves on the contractual basis determine the mode of payment for the respective
services. However, when executing agreements in the sphere of capital construction, it is
necessary to take into account requirements of other regulations.
Thus, the foundational rules of determining the cost of new construction, expansion,
reconstruction and technical re-equipment of enterprises, buildings, repair of housing, social
and communal facilities and landscaping, as well as restoration of architecture monuments are
set with the Order of the State Construction Committee of Ukraine "On Approval of the
Construction Costing Rules (DBN D.1.1-1-2000)" No.174 of 27.08.2000 and are binding when
determining the cost of buildings (objects) construction of which is carried out using budgetary
funds or funds of state-owned enterprises, facilities and organizations.
According to DBN D.1.1-1-2000 and the Order of the Ministry of Finance "On Approval of
Accounting Provisions (Standard) 18 "Construction Contracts"" No.205 of 04/28/2001, capital
repair is attributed to the construction works defined as "constructing of a new object,
renovation, expansion, completion, restoration and repair of objects, installation works".
According to DBN D.1.1-1-2000, the construction object is any separate building (commercial
building or workshop, warehouse, residential house, etc.) or structure (bridge, tunnel, platform,
etc.) with all arrangement (walkways, platforms, etc.), equipment, furniture, inventory, utility
and axillary devices belonging to it and, if necessary, with engineering networks adjacent to it.
For object construction, it is necessary to create a separate design and estimate or estimated
budget calculation (object estimate or object estimated budget calculation).
At construction of enterprises, industrial or residential civil complexes, separate objects in
composition of the building are external network with service and auxiliary facilities on them
(water supply, wastewater collection , district heating, gas supply, power supply, etc.), access
roads, in-factory or in-district roads, other general site works.
If at the construction site, under the design, only one main purpose object is constructed
without construction of subsidiary or auxiliary facilities (e.g., in industry – the main workshop
building; in transport – the building of a railway station, in housing and civil construction – a
residential building, theatre, school building, etc.), the notion of the construction object
coincides with the notion of the structure.
According to clarification by the Ministry of Regional Development and Construction of
Ukraine77, use of standard forms of the source accounting records in construction "Acceptance
Act for Construction Works (standard form No.KB-2v) and "Certificate of the Cost of
Construction Works Performed and Costs Items" (standard form No.KB-3) approved with
Order of the Ministry of Regional Development and Construction of December 4, 2009
No.55478, these model forms are subject for use in the course of settlements for work
performed between customers and performers of construction (the contractor) performed at
the expense of budget funds and funds of state-owned enterprises, institutions and
organizations.
Frequency of the subcontractor's submission of the model forms is stipulated in the
subcontract (paragraphs 98, 99 and 102 of the Framework Conditions of Execution and
Performance of Subcontracts in Capital Construction" approved by the Cabinet of Ministers of
77
Letter of the Ministry of Regional Development and Construction of Ukraine "On Application of Model Forms of Source
Accounting Records in Construction" of 06.05.2010 No.2/12-20/4993.
78
Order of the Ministry of Regional Development and Construction of Ukraine "On Approval of Model Forms of Source
Accounting Records in Construction " of 04.12.2009 No.554.
176
Ukraine "On Approval of the Framework Conditions of Execution and Performance of
Subcontracts in Capital Construction" of 01.08.2005 No.668 (hereinafter – the Framework
Conditions), subparagraph 3.3.8 of the Rules for Determining Cost of Construction DBN D.1.11-2000). The practice of settlements for construction work performed is, usually, monthly
execution of such documents.
Framework Conditions, under the Civil Code of Ukraine, determine the procedure of signing
and executing subcontract for carrying out new construction, reconstruction of buildings and
structures, as well as technical modernization of operating enterprises (hereinafter – capital
construction of objects), as well as complexes and types of work related to capital construction
of objects.
Provisions of Framework Conditions also apply to execution and performance of subcontract
for restoration and capital repair of buildings and structures.
Financing of the work (building of the object) is carried out according to the plan drafted by the
customer, coordinated with the investor (the main manager of budgetary funds) and the
contractor and being an integral part of the subcontract. The construction funding plan is
drafted on the basis of the building (object) title, the construction organization design taking
into account calendar work implementation schedules and the procedure of settlement for
work performed. The parties agree on the construction funding plan according to the
procedure stipulated by the contract.
The construction funding plan is drafted for the entire construction period by years, and for the
current year – by months indicating sources and directions of funding (types of costs). Monthly
distribution of funds for transitional construction projects is annually agreed by the parties
within the terms set in the contract. According to the subcontract, the customer has the right to
amend within set terms the schedule of construction funding for the current year in view of
available funds, volumes of actually performed work, etc.
If the customer fails within the terms set in the contract to pass to the contractor for approval
the construction funding schedule for the current year, the contractor has the right not to start
work, and at transitional constructions – to halt its execution, and, if the customer fails to apply
the necessary measures, to request termination of the subcontract.
Should the customer make the decision on acceleration or slowdown of work implementation,
at the same time it is necessary to amend the construction funding plan with making
respective amendments in the subcontract.
Allocations for work performance (object construction) at the expense of public funds are
made in accordance with the procedure stipulated by the law.
In the case of performing work using budgetary funds, funds of public and communal
enterprises, the issues of settlements for work performed (advance payment, interim
payments, payment terms, etc.) are defined by the subcontract in compliance with
requirements of the legislation governing these issues.
In particular, in 2009 the Ministry of Housing and Communal Economy of Ukraine approved
with its order79 the form of the agreement for allocation in 2009 of budget funds from the
Stabilization Fund for implementation of investment and innovation projects for energy
efficiency in the housing and communal economy. The agreement set the form under which
79
Order of the Ministry of Housing and Communal Economy of Ukraine "On Approval of the Form of the Agreement for
Granting in 2009 of Budget Funds from the Stabilization Fund for Implementation of Investment and Innovation Projects for
Energy Efficiency in the Housing and Communal Economy" of 13.08.2009 No.252.
177
the Ministry provides budgetary funds for the recipient of funds under the conditions of cofunding at the expense of own and / or raised funds by transferring them to the recipient's
account for the project's implementation (or without co-funding by transferring the funds to the
recipient's account for the project's implementation).
According to the Framework Conditions of conclusion and execution of subcontracts for
capital construction, the Ministry of Construction, Architecture and Housing and Communal
Economy of Ukraine approved the Model Subcontract in capital construction (hereinafter – the
Model Subcontract)80. The Model Subcontract is applied by customers and subcontractors
during construction as guidelines when executing the subcontract for object construction work
performance. In the Model Subcontract, several options for presentation of certain conditions
are offered, which enables the parties to the contract to choose the most appropriate option
for them.
Under provisions of part IV of Article 179 of the Economic Code of Ukraine on the status of
model contracts, the parties to the subcontract have the right by mutual agreement and based
on specific conditions to modify specific provisions stipulated by the Model Contract or
complement its content. The parties, however, must comply with provisions of the legislation
and the Framework Conditions of executing and performing subcontracts in capital
construction approved with Resolution of the Cabinet of Ministers of Ukraine of August 1, 2005
No.66881.
According to provisions of Resolution of 01.08.2005 No.668 "On Approval of the Framework
Conditions of executing and performing subcontracts at capital repair", the essential terms of
the subcontract to perform residential house capital repair work at the expense of budgetary
funds are fully prescribed, and include names, contracted works description and values, and
all general and special conditions of the contract.
The definition of capital repair is set by Order of the State Committee of Ukraine for Housing
and Communal Economy "On Approval of the Rules of Maintenance of Residential Buildings
and Adjacent Territories" of May, 17 2005, No. 76 (hereinafter – Order No.76 of 17.05.2005).
According to this order, "Capital repair of a building is a complex of repair and construction
work related to restoration or enhancement of the building's operational qualities, with
restoration or replacement of bearings or frame constructions, engineering equipment and fire
protection equipment without change of construction dimensions of the building or its technical
and economic indicators".
Capital repair envisages replacement, restoring and modernizing the building's constructions
and equipment in connection with their physical wearing out and destruction, improvement of
operational qualities, and improvement of the building's planning and improving the territory
without changing construction dimensions of the object.
The procedure of drafting, the scope and nature of design estimates for major repairs of
residential buildings, as well as the terms of their issue for the contractor, the procedure of
realization and funding of major repairs in residential buildings must be set in accordance with
requirements of legislative and regulatory technical documents.
80
Order of the Ministry of Construction, Architecture and Housing and Communal Economy of Ukraine "On Approving the
Model Subcontract in Capital Construction" of October, 27 2005 No.3.
81
Decree of Cabinet of Ministers of Ukraine "On Approving the Framework Conditions of Executing and Performing
Subcontracts in Capital Construction" of 01.08.2005 No.668.
178
Thus, in view of requirement of the abovementioned regulations, when signing a subcontract
for capital construction, contracting parties may agree on deferred payment of the relevant
work. Application of such form of payment is a real basis and opportunity for owners (coowners) of an apartment building to independently, in the form of direct investment, finance
capital repair of their apartment building. Organization of owners' (co-owners') payment under
such contract is similar to the procedure described in the section "Direct Investments of
Owners (Co-Owners)". Specific features of organizing co-financing for capital construction at
the expense of budgetary funds is strictly regulated and, therefore, take a long time and
require professional training both for the customer and the contractor.
Energy performance contract
Ukraine's legislation does not establish specific features of legislative regulation of the energy
service subcontract (see the text inset "Fact Sheet") as a separate type of economic contracts,
thus such contract form may be selected by the parties themselves. Today, Ukraine has the
practice of executing agreements between co-owners of apartment buildings and energy
service companies (Nizhyn - condominium "Zorya" – LLC "SEC "ESCO-Centre", Lutsk –
condominium "BINOM" – LLC "Energy Servicing Company "Lutsk Utility Systems"). To
regulate their relations, the parties chose the contract for provision of centralized heating and
centralized hot water supply services.
In Nizhyn, elements of the energy service subcontract in the services contract were
implemented by setting own algorithm for calculation of the ceiling rate of the tariff on services.
This rate should be 97% of the tariff for heat supply set for thermal power provider in the city
multiplied by the rate of heat power consumption per square meter of heated space in the
house that has been observed during the several recent years and is calculated on the basis
of house heat power meters' indications. LLC "SEC "ESCO-Centre" entered into agreements82
with each apartment owner for provision of centralized heating and hot water supply services,
in which the annex to provisions of the model contract includes the algorithm of calculation for
determining the ceiling rate. Apartment houses co-owners-project participants will gradually
repay to ESCO for work performed by paying monthly fees for services during ten years.
In Lutsk, the condominium association "BINOM" – LLC "Energy Servicing Company "Lutsk
Utility Systems", similarly to the contract concluded between the parties in Nizhyn, envisaged
that consumers would pay for services at the tariff that makes up 93% of the one set in the city
during 10 years. Thus, when tariffs in the city change, the new size of the tariff for consumers
of the house cannot exceed the rate that includes the actual average monthly consumption of
heat power in this house calculated per one square meter of heated space defined by
calculation. But, unlike the contract signed in Nizhyn, this average consumption rate is not
determined. As stated in the contract, improvements that are not parts of energy conservation
measures (roof repair, lobby improvement, sewer repair) will be performed by the ESCO
under a separate contract and paid by the customer during 10 years at the expense of funds
collected from the condominium as the fee for maintenance of buildings, structures and
adjoining territories.
Despite ESCOs' attempts to introduce separate elements of energy service subcontracting in
services contracts, there are now a number of limitations to extensive application of
performance contracts in Ukraine. Among them:
82
Similar to the Model Contract on provision of centralized heating, hot and cold water supply and wastewater collection services
approved with Decree of the Cabinet of Ministers of Ukraine of July, 21 2005 No.630
179
Due to the nature of social welfare programs (housing subsidies, privileges regarding paying
housing and utilities fees), which determine the size of social allowances depending on tariffs
on services, ESCO companies have to be centralized heating and hot water supply services
performers. Otherwise, the payment for energy service contracting services, which would not
be linked with the tariff on services, will not be taken into account when determining the
amount of social allowances for low income consumers and those who have privileges
regarding payment for services.
Any work (services) associated with implementation of energy efficiency measures in an
apartment house, except for measures in the sphere of district heating or hot water supply,
must be funded by residents as a separate fee. This is due to peculiarities of tariffs setting on
centralized water supply, wastewater collection, maintenance of buildings, structures and
adjacent territories and electric power supply for population (or "settlements", see below).
Without setting a clear benchmark understandable for consumers (which is the tariff on heat
consumption per square meter), ensuring of energy saving achieved by the ESCO required
preparation of the procedure of verification and monitoring of energy consumption indicators
before and after implementation of the energy efficiency measures, as well as understanding
of these aspects by co-owners for negotiating with the ESCO. Since there is no such
experience in Ukraine, the demand for ESCO services in their pure form has not yet formed.
180
Annex 47 – Contractual details of concluding loan agreements
with condominiums; legal background for lease agreements
1. Loan Agreements
Part two of Article 66 of the Economic Code of Ukraine provides for the general right of
enterprises to attract bank loans. The legislation contains no direct restrictions on this right either
on the basis of the legal and organizational form, or on the basis of the enterprise's form of
ownership.
The term "loan" is used in several legislative acts, and in different acts different meanings are
attributed to these concepts. Types of loans are also defined in different ways.
For the purposes of article 1054 of the Civil Code of Ukraine, the loan is interpreted as the
monetary funds that a bank or another financial institution (lender) provides for the borrower
provided the borrower agrees to repay the money and pay interest on using the funds.
Along with this, Article 1057 of the Civil Code of Ukraine contains a reference to the "commercial
loan" in the form of advance payment, prepayment, deferred or installed payment for goods,
work or services.
Article 1 of the Law of Ukraine "On Financial Services and State Regulation of Financial
Services" contains the definition of the "financial loan", which corresponds to the understanding
of the loan under Article 1054 of the CCU.
According to Article 4 of the Law of Ukraine "On Financial Services and State Regulation of
Financial Services", loan disbursement under financial credit conditions is attributed to financial
services. According to Article 5 of this law, the right of providing financial services belongs to
financial institutions, while the right to extend financial loans due to borrowed funds only belongs
to lending institutions on the basis of the respective license.
Financial institutions, according to the law, include banks, credit unions, pawnshops, leasing
companies, trust companies, insurance companies, pension savings institutions, investment
funds and companies, as well as other legal entities the sole business of which is provision of
financial services. Credit institutions, pursuant to the applicable law, include banks and credit
unions, however, among the financial institutions from which companies may receive loans there
are only banks (the range of the entities to whom credit unions can extend loans is limited by the
Law of Ukraine "On Credit Unions").
According to Article 347 of the Economic Code of Ukraine, bank loans can have the following
forms: bank, commercial, lease, mortgage, other. Types of loans vary in: terms of use (short,
medium and long-term), security means; risk rate, extension methods, maturity, other terms of
extension, use or repayment.
The law does not prohibit taking loans from non-residents (including foreign banks). According to
the "Regulation on the Procedure of Receiving Loans, Loans in Foreign Currency by Residents
from Non-residents and Extension by Residents Loans in Foreign Currency for Non-residents",
approved by Resolution of the NBU of 17.06.2004 No. 270, such attraction of loans shall be
made through authorized banks of Ukraine ("servicing bank.). The contract under which the loan
is extended shall be subject to registration with the NBU.
Condominium associations as legal persons have the right to obtain loans. Article 4 of the Law of
Ukraine "On Condominium Association" provides for that the association's property is composed
of:
 Property transferred to it by association members as property;
 Income obtained;
 Other property acquired on grounds not prohibited by law.
181
Not a single legislative act contains prohibition for condominiums to receive funds as loans.
At the same time, the legislation sets some conditions for attracting and using loan resources by
condominiums. Thus, Article 21 of the Law of Ukraine "On Condominium Associations" and
paragraph 6.2. of the Model Statute of the Condominium approved with Order of the State
Committee for Housing No. 141 of 08.27.2003, it is envisaged that use and disposal of funds
shall be carried out "in compliance with the statute and the approved estimate".
Consequently, attraction of loan funds and their use and repayment should be stipulated in the
association's estimate. Under article 10 of the abovementioned Law, adoption of the estimate is
assigned to exclusive competence of the general meeting of the association. Therefore, the
decision on the condominiums' taking a loan must be made at a general meeting of the
association, and simultaneously with the adoption of such decision the meeting should decide on
the appropriate amendments to the estimate (or adoption of a new one). Besides, depending on
the mechanism of loan funds' repayment, it may be necessary to implement relevant targeted
contributions from co-owners.
Collateral under loans for condominium associations
Since obtaining a loan is always related to provision of a collateral by the borrower for the lender
(pledge, etc.), it is necessary to pay attention to the fact that a condominium as a legal entity
does not own either the apartment building as a whole, or joint property (elevators, attics,
basements, etc.) of such house. The so-called joint property of an apartment building in
accordance with Article 382 of the CCU and the Law of Ukraine "On Condominium Associations"
is jointly owned by owners of apartments and non-residential premises in the building. So, in
most cases the only property owned by a condominium association as a legal entity is the funds
on its bank accounts and obligations / debts of co-owners to the condominium. Another "asset"
of a condominium association might be the fees that the condominium will receive in the future
but the maturity of which has not yet come. Ukrainian legislation allows pledging titles to
property, including those that the mortgagor will obtain in the future (Articles 4 and 49 of the Law
of Ukraine "On Pledge", art. 576 of the CCU) – that is, in our case, claim rights under obligations,
including those maturity of which has not yet come, can be pledged.
It should be noted that among the abovementioned joint property in an apartment house there
are also auxiliary premises that condominiums can now lease. Such premises are not separated
from the general bulk of a building's joint property, there are no title documents for them, they
remain joint property of all co-owners of the apartment house. Association can only lease them
because such right is directly given to condominium associations in the Law of Ukraine "On
Condominium Associations". And despite the fact that condominiums sign lease agreements for
such premises on their behalf, they are not owners of such premises.
Therefore, in our opinion, condominiums cannot pledge auxiliary premises. Besides, to be
pledged an auxiliary premise should be separated from the joint property of the house. Since the
premises are separated from joint property of the apartment building's co-owners, it is the coowners (not the condominium association) that will be co-owners of the premises83.
Theoretically, co-owners of the premises can pledge them under loan commitments undertaken
by the condominium, but this will require reaching 100% consent on this issue, which in practice
is not always possible.
Separate condominiums own apartments or non-residential premises and title documents issued
for them.
83
Since premises are real estate objects and the title on them is subject to state registration, all co-owners must be mentioned in the title
certificate for such premises. Among other things, this also creates purely practical inconveniences.
182
So, a condominium association as a legal entity usually has no assets that potential lenders
would be willing to accept as collateral. For the exception of the few condominiums that own
apartments, the only asset of the associations is the "cash flow" of contributions and mandatory
fees of co-owners.
Organizational aspects of loans by condominium associations
It should be taken into account that most condominiums lack knowledge, experience and
expertise to negotiate a loan and sign the necessary agreements. Getting a loan, apart from
actually finding a potential lender who offers optimum loan conditions is also associated with the
need to develop a business plan and prepare a set of documents for obtaining the loan, which
may be required by the lender. Moreover, in the case of extending a loan the condominium
association would need qualified legal assistance when signing the loan agreement and the
collateral agreement. As experience proves, in Ukraine there are very few chairs and members
of condominium boards who have the necessary education or training for this. And even among
condominium members it is not always possible to find appropriate experts who could provide
such assistance. While involvement of outside experts would incur additional costs for
condominiums – while the quality of such specialists' services is not always guaranteed.
Since in Ukraine loans secured with pledging of the claim right for financial liabilities are too
expensive (due to peculiarities of regulation of the banking market in Ukraine), in practice it is not
profitable for condominiums to take a loan from a Ukrainian bank. Accordingly, the most
profitable option for condominiums is receiving from the contractor company a commercial loan
(art.1057 of the CCU) as installment payment for work performed. This helps condominiums
avoid the need to independently negotiate and sign agreements with lenders (because
condominiums far not always have the opportunity to request the assistance from experts in law,
finance, etc.).
The main limitation for use of loan as a source of funding for investment projects by
condominiums is lack of knowledge, experience and expertise to negotiate the loan and sign the
necessary agreements, as well as the fact that the condominium as a legal entity lack property
that potential lenders would be willing to accept as collateral; plus the status of a condominium
as a non-profit organization, which for some banks is not acceptable for extending loans in
accordance with internal regulations.
Co-owners of the multi apartment building in which there is no HOA established can apply to the
bank for borrowing for the purpose of capital repairs in their building. In order to make a decision
on borrowing, it is necessary to obtain 100% agreement of all the co-owners. In this case coowners will have to apply for borrowing as individuals and have their own property as collateral.
This may be a big barrier for borrowing. Since there is no special provision in the law which
prescribes a mechanism of decision making on the issue of borrowing by the co-owners in the
multi-apartment building in which there is no established HOA, getting an agreement of 100% of
co-owners on the issue of borrowing seems to be technically unrealistic.
Lease Agreement84
In the housing sector for energy conservation it is possible to apply leasing relations. Legal and
economic principles of financial leasing are stipulated by the Law of Ukraine "On Financial
Leasing" No.723/97-VR of 12.16.1997 (hereinafter in this section – the Law).
84
When preparing this section, we used materials of the report "Review of Funding Sources for Investment Projects in the
sector of District Heating and the Options of Their Application within the Municipal Heating Reform Project". The Study
Results Report. Part I. Prepared by the Municipal Development Institute within the USAID "Municipal Heating Reform"
project. Task 6.1. Kyiv, 2009"
183
According to Article 1 of the Law, financial leasing (hereinafter – leasing) is a type of civil legal
relations arising from the lease agreement. Under the financial lease agreement (hereinafter –
the lease agreement), the lessor undertakes to acquire an object as property from the seller
(supplier) in accordance with specifications and conditions set by the lessee and to pass it for
the lessee's use for a specified period not less than one year at a fixed fee (lease payments).
According to Article 4 of the Law, lease subjects can be any legal entities, namely:
 Lessor – the legal entity who transfers the right to owning and using the leasing object to
the lessee;
 Lessee – the individual or legal entity who receives the right to owning and using the
leasing object from the lessor;
 Seller (supplier) – the individual or legal entity from whom the lessor acquires the object
that later will be transferred as a lease subject to the lessee;
 Other individuals or legal entities who are parties to a multilateral lease agreement.
Article 6 of the Law stipulates that essential provisions of the lease agreement are:




Lease subject;
Period for which the lessee is entitled to use the lease subject (lease term);
Amount of lease payments;
Other conditions on which upon the request of at least one of the parties agreement must
be reached.
The law sets general rules and restrictions on definition of essential provisions of the financial
lease agreement.
The lease subject. Article 3 of the Law provides for certain restrictions on the subject of the
lease agreement. The subject of the lease agreement (hereinafter – the lease subject) may be
an inconsumable thing (intended for repeated use) defined by individual features and classified
according to legislation as fixed assets.
Land plots or other natural objects, integral property complexes of enterprises and their separate
structural subdivisions (branches, workshops, divisions) cannot be leased.
Property in state or communal property to which no prohibition on transfer for use and / or
possession applies, can be leased according to the procedure prescribed by this Law.
The lease term. Article 6 of the Law specifies that the lease term is determined by the parties to
the lease agreement in accordance with provisions of the law and, therefore, cannot be less than
one year.
Lease payments. According to Article 16 of the Law, payment of lease payments shall be made
according to the procedure prescribed by the agreement. Lease payments may include:




The amount that partially compensates the value of the leased asset;
Payment as remuneration to the lessor for property obtained on lease;
Reimbursement of the interest under the loan;
Other costs of the lessor directly related to execution of the lease agreement.
Thus, the legislation of Ukraine does not contain restrictions on the range of legal entities who
may provide financial leasing services or use financial leasing services. The company (lessor)
not necessarily must be a financial institution in order to provide property for another enterprise
as financial leasing. Under financial leasing, there are no additional requirements to the collateral
or security, as the property leased is a form of collateral under the agreement.
However, leasing is not extensively applied in the housing sector, primarily due to lack of
demand from co-owners. According to expert assessments, the cost of financial leasing may be
184
higher compared with a loan, as it includes not only the interest, but also other costs of the
lessor that are directly related to execution of the lease agreement (remuneration and other
lessor's costs, etc.), the cost of leased property insurance, etc.
Today in Ukraine leasing companies offer executing agreements for the term of up to 5 years.
Moreover, financial leasing actually limits the company that needs to purchase equipment to the
choice for equipment of those suppliers who can offer sale under financial leasing conditions, or
to involving leasing companies, which increases the cost of the agreement.
Realization by co-owners of lease payments can be considered both as a part of the tariffs on
district heating and hot water supply (as required in accordance with the Tariffs Setting
Procedure of RCMU No. 955), and as a separate payment when it comes to equipment that
cannot be attributed to the heating sphere (elevators , potable water booster pumps, etc.).
Thus, for the purpose of funding investment needs of a residential building, co-owners of the
building may enter into a financial lease agreement. However, considering the specific features
of financial leasing, the owners' (co-owners') choice in favour of this method of funding may be
unnecessarily expensive and economically unsound.
185
TECHNICAL ASSISTANCE FOR IMPROVING
THE ENERGY PERFORMANCE OF RESIDENTIAL BUILDINGS
ANNEX 48
Gap Analysis
of
Law of Ukraine “On Association of Co-Owners of Residential Buildings”
(Bulletin of Verkhovna Rada of Ukraine, 2002, N10, p. 78)
Prepared For:
Ministry of Housing and Municipal Economy of
Ukraine
Prepared by:
Jaroslava Zapletalova
Housing Institute, c. a.
Bratislava, Slovakia
Under the subcontract with:
2675 Morgantown Road
Reading, Pennsylvania 19607-9676
United States
CONTRACT: FC474/EBSF-2010-08-124F
Table of Content
Synopsis ..................................................................................................................................... 3
1. Summary of Ukrainian Law............................................................................................... 4
1.1 Summary of Current Law................................................................................................. 4
1.2 Suggested Approach......................................................................................................... 5
2. Summary of Slovak Housing Policies................................................................................ 6
3. Gaps between the Slovak and Ukrainian legislative .......................................................... 8
4. Conclusion and Recommendations: ................................................................................. 12
2
Synopsis
This paper provides Gap Analysis of the “Law of Ukraine on associations of co-owners of
multi-apartment residential buildings”1 from 2002 and as amended in2005 and 2006 with
„relatively well functioning“ legislative of Slovakia relevant to the residential building
sector. It is apparent that the two legislatives on apartment ownership are substantially
different. The differences are most likely a result of differences in perception of the
responsibilities of the apartment owners for their domicile and the differences in the upto-date state housing policies influenced by the socio-economic environment of the two
countries.
(“ Про об'єднання співвласників багатоквартирного будинку ( Відомості Верховної Ради
(ВВР), 2002, N 10, ст.78 ) ( Із змінами, внесеними згідно із Законом N 3053-IV ( 3053-15 ) від
03.11.2005, ВВР, 2006, N 4, ст.60 )
1
3
1. Summary of Ukrainian Law
1.1 Summary of Current Law
“Law on associations of co-owners of multi-apartment residential
buildings” defines legal and organizational principles of establishment,
functioning, reorganization and liquidation of associations of owners of
residential premises and premises used for non-residential purposes,
protection of their rights and performance of duties regarding joint
maintenance of apartment house.
Law provides definition of used terminology, recognizing two terms
describing the way the homeowners can be organized:

Association of apartments owners and co-owners of common area - legal
entity established for the purpose of utilization common property (article
3,4)

Association of apartment owners – also a legal entity established for the
purpose of protecting common interest of the union (article 3,8)
Law sets the process of establishing, registration, activity and liquidation of
these legal entities, their interrelations and relations between them
government and local governments as well as their relations to commercial
entities.
Law correctly defines the association of apartment owners (Homeowners
Association), form of establishing, rights and responsibilities of the members
– owners of rooms, apartments and other-non living spaces, and the
association representatives (articles 2-11). However, the problematic issue is
the definition of its establishment within the apartment complex. It can
consist of single building or from multiple buildings, and may include
buildings owned by others based on contractual agreement. In such case,
the decision making process applied by the owners of rooms, apartments
and non-living are it is not clear. In such arrangement, the owners may not
have direct control utilization of funds in their own building (their property),
the funds they have the responsibility to collect in the bank for the purpose of
repairs and maintenance (article 21), together with other buildings of the
apartment complex. Such ”common” funds are not registered and
appropriated for the specific buildings, which in turn is the reason for lack of
interest of the apartment owners in proper repair and maintenance. This
system does not allow transparent management of funds. Law does not
permit establishing multiple associations within one building (article 4) and it
allows building management based on contract with building management
organization (article 13)
Association is defined by the law as legal entity with non-profit organization
status (article 4), but in article 10, it allows establishing or participation in for
profit entity with limited liability (Ltd) (article 17) which is contradictory to law
on non-profit organizations.
4
The membership in the association is voluntary (article 9), the member can
be accepted of expelled (article 7), which makes the association the same as
association base on common interest. Association of owners is a form of
common asset management and therefore the membership and associated
decision making responsibility mandatory for all owners of the apartment in
the building.
The rights and responsibilities of association members (articles 14, 15, 16)
are defined correctly.
The payments are divided to creation of necessary accounts and for
payments for services (article 21, 22). Payments for services are to be made
monthly according to agreement. The type of agreements, necessary billing
documents containing service type and volume of services, definition of
suppliers and recipients of services are not defined. (need s to be
determined by other laws)
In case of non payment, the association can refer the case to the court after
60 days after payments ceased and can demand the payments (article 13).
Law does not include establishment of legal claim (Lien) against the property
in favor of the other owners. Establishing Lien is important for ensuring
payments and also had significant role in obtaining loan for reconstruction
and its repayment
Law maintains the participation of former owner of the assets on repair and
maintenance of building common spaces (article 24). By transferring the
ownership to the property, all responsibilities for its repair and maintenance
should be transferred on new owner. Responsibility of former owner of the
assets to participate in repair and maintenance should only apply in case
when not all apartments are sold or transferred. In such case the former
owner should have the same rights and responsibilities as the other owners.
One of the main problem of the law is its definition of two levels of legal
entities – Association and union, on which the responsibility for maintenance
of common spaces can be delegated. (article 12 and 16). In this case, the
owners are excluded from decision making process. The second level of the
legal entity should be eliminated.
1.2 Suggested Approach
The law should be based on principle of transferring responsibility for the real
estate assets of multi- apartment buildings from former owner (state, or
other) on individual owners of apartments and non-living spaces and to
define their rights and responsibilities. The law has to establish the fact that
with the ownership of apartment carries also common ownership of the
common spaces and rights to it and responsibilities for it.
Main content of such law in any country must include:

Record in registry of real estate property ownership for individual owners
acquired by purchase, inheritance or by other acts, and all associated
5
issues such as financial responsibility for payments for repairs and
maintenance.

Ensuring management of the common area and common equipment of the
building by establishing Home owners Association (HOA), establish
selection and rights of its management, process of selecting executive
representative(s). Second form of management can be agreement
(contract) with specialized, licensed building management organization or
private person.

Responsibility to collect financial resources for repairs and maintenance of
common property and means of payment for services that are associated
with utilization of apartments (utilities)

Establish decision making process of the owners regarding use of financial
resources for repair and maintenance by voting process, and in case of
insufficient own resources allowing use of other means such as loans.

Provide means of enforcing payments by the apartment owners to the fond
for repair and maintenance and for services obtained

Establish rules for common management and maintenance of the building,
in compliance with other laws, such as energy law, safety standards, etc.
Mentioned principles are currently not included in the Ukrainian Law from
2002.
2. Summary of Slovak Housing Policies
In 1990, the Government of Slovakia adopted basis principle that the citizen
has the solo responsibility for his/her domicile, for acquiring it on housing
market and for its maintenance. On this basis, in 1992 all previously applied
system of rent and other housing related subsidies were permanently
abolished. At the same time, payments for rent and services were separated
and “rent control” was gradually reduced and finally eliminated. Currently,
Slovakia has no rent control.
The principle of citizen’s responsibility for its own domicile is in Slovakia
currently applied to the entire housing sector, including apartments in private
ownership of the residents. So called „social blindness“ in the residential
sector required introducing provisions for introducing a safety net assistance to economically and socially disadvantaged citizens who are for
one or the other reason (mostly economical reasons) not capable of securing
their own domicile.
State assumed the responsibility for protection of socially and economically
vulnerable part of the society through a set of legislative acts, directives and
through other available means and effectively protects the socially and
economically disadvantaged groups, such as young families, retires, large
families, single parent families, disabled, minorities, etc). Gradual
introduction of the social protection tools since 1992 and effective
combinations of such tools substantially influences not only availability, but
6
also affordability of the housing, its maintenance and recently also it
improvements.
In 2006, European Council adopted the proposal of team of expert and
issued Directive on housing, financing and subsidies with intention to
formulate the provisions for securing adequate means of housing for
disadvantaged part of population and prevent exclusion of part of the society
due to poverty, racism, or xenophobia. This document contains definitions
and description of fiscal means that can be applied, including a specific
housing subsidy. Most of the proposed means in this document is being
applied in Slovakia with very positive, encouraging results. Results include
new construction of public sector rent based housing, support of low interest
loan for single family and multi-apartment housing construction, soft loan
schemes for housing reconstruction, program of loan guarantees, etc. The
legislative and all directives are periodically reviewed for their effectiveness
and impact and as necessary, amended. Results are used to formulate state
housing policy, within a 5-year cycle.
As a result of the privatization of apartment houses (1993), the former
owners of the housing stock were released from any responsibility for the
housing. In 1991-1992, some experts estimated that the cumulative cost of
neglected maintenance and repair in apartment houses (especially the
concrete panel construction) reached approximately EUR 13 bill; which is
about two annual state budgets of the country. Thus, the state revoked any
further commitments concerning privatized housing stock, since such amount
of money could not be accumulated neither by the state, nor by the
municipalities which gradually became owners of those apartments. That is
also a reason why prices for apartments were downgraded, since the owners
started to accept their responsibility for the status of privatized housing stock.
The degree of neglect required quick action. Instead of direct support,
incentives were introduced for the owners – subsidies for building retrofits
through state grants. The apartment owners engaged themselves in longterm saving plan to accumulate money for refurbishment, obtained mortgage
loans subsidies through reimbursement of the part of interest rate, guarantee
program sponsored by the Slovak Guarantee and Development Bank, etc. In
1994, the State Housing Development Fund (SHDF) was established based
on revolving principle. In 1996, it started to provide support to both legal
entities and natural persons in form of a loan and unrecoverable contribution.
State Housing Development Fund /hereinafter only referred to as "SHDF"/ is
a fund established to cover state support for housing stock refurbishment
and expansion typically in form of advantageous long-term loans. The state
makes regular annual contributions to this fund. The total government
subsidies of the housing sector in Slovakia is lower then in many West
European countries,
Since the very start, Slovakia supports the approach that every house
(residents of the single house) should be responsible for their own economic
management and handling of their resources based on joint decision-making
of apartment owners. A large number of houses provide evidence of
correctness of this approach, since with a little support from the state and
many available financing sources the apartment owners carried out the
refurbishment of their properties by themselves. Estimates show that about
20% + of residential buildings were completely renovated. Often, improved
7
technical status of the house is not the only objective, since many owners
are also trying to reduce their energy consumption in the house in line with
the Act on Higher Energy Efficiency of the houses. A large part of the loans
is then paid back by saved energy – especially reduced heating demands.
3. Gaps between the Slovak and Ukrainian legislative
Definition of Assets
The Ukrainian and Slovak laws define terms differently. The Slovak law
defines and works only with term “apartment building” and is not considering
“apartment complex” consisting of multiple apartment buildings. Ukrainian
law does not define the size of the apartment complex. This affects the
decision making related to financial resources and movement of resources
between the complex units. This may lead to lack of transparency and loss of
interest in care of the property.
Land
Ukrainian law is addressing transfer of ownership also of the land, In
Slovakia, this issue was complicated by the restitutions process and the land
transfer is complicated and is not completed yet. Both laws are based on the
fundament of the definition of condominium, where residential or nonresidential premises form subject of direct ownership and a share of common
premises forms part of joint ownership and apartment owners are obliged to
take shared care of them.
Apartment transfer
The Ukrainian law also deals with the issue of housing cooperatives’ transfer,
which is an issue still unresolved in Slovakia. It is much related to unpaid
loans for cooperative apartments that have to be returned to the state. The
Slovak law only considers apartment transfer once the loan has been paid
back, which happens gradually
Type of Legal Entity
The Ukrainian law differentiates between two levels of legal entities – an
association and a union. The definition of both is different from Slovak law in
terms of apartment building maintenance in ownership of the residents. In
case of association, the objective of the establishment is unclear, since the
law fails to define the objectives, e.g. if it is a housing management or
association based on common interests. This is a form, which is unknown to
the Slovak law. Slovak legislation, allows only one legal level of housing
management called home-owners’ association or a contract signed with the
housing manager. A joint ownership of infrastructural networks’ outside of the
building is not allowed in Slovakia, since there are other laws on service
suppliers serving this purpose. The service suppliers are owners of networks,
which is much related to the duty of introducing meters in houses, for which
service suppliers are liable (water, heat and hot water).
National Association of HOA
The National Association of Home-Owners’ Associations established in
Slovakia is a legal entity operating on voluntary basis with member
associations from all around Slovakia. It provides training for HOA officials,
regularly publishes a magazine for its members, represents the interests of
8
associations vis-à-vis the government, Parliament and other organizations.
As a matter of principle, it will not carry out housing management and it
works via regional organizations. Since its establishment in 1996 the NAHOA
becomes a very important partner of all government organization, provides
expert opinion on legislative and all related sub-laws and directives and
represents interest of apartment owners as well as users of services and
energy consumers. Slovak law on apartment ownership does not define the
NAHOA, this organization is established based on civil codex and it is
registered as non-profit organization
In Slovakia, home-owners’ association (HOA) – owners of apartment and
common building area- is the only legal form which can be established by
home-owners in order to manage their common premises and equipment in
the houses. HOA is registered as non-for-profit organization which may not
own immovable property or conduct business activities via other persons.
The only form of HOA income comes from the rent of common premises or
equipment that is taxed in line with regulations (initially, they were deductible
items prior to taxation).
Process of Establishing HOA
Similarly to the Ukrainian legislation, the Slovak law also precisely defines
the procedure concerning HOA establishment via memorandum of
association and registration with respective registration place of public
administration. Establishment of associations in Slovakia is possible only in
houses with more than four apartments. Based on registration, HOA will
acquire an identification number and enlists itself with the tax authority as a
tax payer. Registration authority puts down the name and address of HOA,
identification number, bodies of home-owners’ association as well as
statutory, i.e. HOA chairman. The contract must contain information on HOA
(title and address, HOA bodies, management style, framework covering
rights and responsibilities of home-owners – the basic duties of homeowners are established directly in the law – participation to the meeting,
voting, etc.), ways and authorizations for persons handling with money in the
fund (general meeting, chairman, board, or another party agreed upon).
Appointment of statutory is important when dealing with other legal entities
and statutory bodies (responsibility, right to sign).
HOA Management
Similarly to the Slovak law, the Ukrainian legislation also appoints
association’s managing body. In fact, their composition differs, but the role of
general assembly remains similar (meetings of home-owners). Law does not
define the issues to be decided only by the general meeting of owners. Law
does not define the obligation of owners to create and contribute to fund for
maintenance and repairs through periodic monthly payments. Lack of this
responsibility likely causes the consequent lack of understanding by the
owners of their responsibility to maintain their property. In addition, Ukrainian
law allows possibility to establish business entity by the association. In
Slovakia this is in contrary with the non-profit status of HOA.
According to the Slovak law, bodies of HOA consist of: chairman, board,
general assembly (meeting of home-owners) and other bodies approved by
home-owners in their agreement. Since its adoption in 1993, this law had
9
been amended 10 times and original option of having collective statutory
body has now been replaced by the only position of the chairman as person
bearing legal liability and acting in line with decisions of the general
assembly and according to the provisions in law.
Chairman as an executive body (statutory) coordinates activities of HOA and
acts on its behalf, the general assembly elects him/her for three years. The
board is HOA’s supervisory body with at least three members. Its role is to
control economic management in the house and submit a report on
economic management to the home-owners’ annual general assembly.
General assembly is a supreme HOA’s body formed by all home-owners in
the house. The board convenes general assembly at least once a year. It
also contains other ways of convening an assembly. Apart from these basic
provisions, the law also defines other details on rights and duties, voting,
approval of documents, elections, etc. Furthermore, the law also defines way
in which HOA can be liquidated.
Housing management contract
In SR, it is obligatory for home-owners to facilitate housing management
directly via HOA establishment or by means of contract signed with natural
person or legal entity – house administrator. There is only one form of
housing management acceptable by law. In case that house administrator is
in charge, a written contract must be signed with home-owners which define
mutual rights and duties of both parties. The law is quite specific about duties
of the administrator towards home-owners. The house administrator must
keep finances of home-owners on specific bank account. HOA or
administrator must conduct book-keeping in line with regulations for non-forprofit organizations. Finances are deposited on bank accounts and mutual
balancing with service providers is based on reimbursements of received
invoices for rendered services. Social subsidies are targeted and are
received directly by owners.
Number of buildings
Typically, HOA would be established in one house only, while joint
associations occurred very rarely in cases of joint technical equipment (e.g.
boiler for 3 houses, etc.). A principal reason for having individual HOAs was
economic management of financial resources which had to be paid by homeowners and were, therefore subject to their joint decision-making. State does
not play role in establishing the HOA. Very positive role in support of the
process was played by the media by making available information
Operation and Maintenance Fond
Home-owners have to pay regular monthly payments based on advancepayment note laid out by the HOA or housing administrator. These are
composed of monthly advance payments for services which are accounted
for on annual basis according to the actual consumption and on payment to
the fund of repair approved by home-owners (depending on their co-owned
share). Fund of maintenance, repair and operation is indivisible and typically,
it is used to pay for repairs of joint parts and common equipment. To provide
for recovery of receivables, the law defines a pledge pro bono HOA or other
home-owners. The pledge is registered in the cadastre (register of
immovable property) and based on this provision, a legal procedure may be
10
applied to claim and recover receivables from owner- debtor, which results
in execution (in line with law on execution) or even auction of apartment (law
on auction).
It is a duty of a chairman or administrator to submit activity plan at the
beginning of the year and to account for advance payments for the services
rendered in the previous year. Division of payments for services takes place
according to the measurements or rules agreed upon by home-owners (e.g.
waste disposal or cleaning of premises per number of persons, hot water
consumption according to the meters, etc.). According to the Ukrainian law,
plans for refurbishment require complex technical inspection which forms
basis for home-owners’ decision on one-off repair or gradual step-by-step
reconstruction. These decisions take into consideration financial resources
owned by home-owners in maintenance fund, bank loan availability, and
state’s incentive grant programs. The general meeting of apartment owners
makes decision on selecting the service supplier, contractors for construction
or maintenance. Ukrainian law lacks of definition of this process. Text
“application according to status and agreement” is not sufficient to determine
the decision parties.
Rights and Responsibilities of owners
Rights and obligations of home-owners are defined in both types of
legislation in a very similar way. One of the fundamental rights is to take part
in the meeting, to be elected and to make decisions about proposed
measures. Some of the crucial duties are: a duty to pay fees for services and
to contribute to the fund for repairs of common premises based on one’s coowned share. Gradually, a system supporting planning of repairs and
accumulation of funds, including loans and other support mechanisms were
developed in Slovakia. Such mechanisms include state subsidies such as
subsidy for removal of systemic breakdowns in panel houses which were
precisely mapped and defined as a result of insufficiencies in original plans).
Individual associations generate one fund of maintenance and repairs which
may be divided into various sub-groups of funds (fund of reserves, etc.).
Neither the State or the municipality has nothing to do with creation of funds.
Information on generation of fund per m is an important indicator for banks
and for the State Housing Development Fund granting loans and proving
one’s solvency.
In one of its most recent amendments, the law introduced an option for
apartment owners to sell apartment of home-owner who keeps violating the
rights of others. This provision is considered to be „Damoclean sword“ for
those who are not able to keep the conditions of co-existence (alcoholics,
drug addicts, etc.).
Sales Price of the Unit
Apart from above-mentioned provisions, the Slovak law also contains an
independent part on stipulation of sale price for apartments, studios and
garages, which were sold from the state or municipalities for the price which
would be lower than the market one with regard to the technical status of the
housing stock. Forthcoming amendment plans to get rid of this part.
Building modifications/additions
11
Another separate part of the law covers housing construction – it tackles new
housing construction, additions or in-built parts. This part was frequently
used when dealing with additions, in which, home-owners allowed apartment
construction (note: in attic) to take place, which resolved an issue of leaking
roofs on expense of others.
Decision making process
In conclusion, it has to be emphasized that the crucial part of the Slovak law
is the one covering direct decision-making on resources in individual houses
accumulated by home-owners themselves. This way, home-owners gradually
developed a sense of responsibility for the house condition which is
something home-owners need to develop in contrast to tenants attitude of
indifference towards the property. This process is quite lengthy and requires
cooperation between public and private sector as well as involvement of
media (TV, daily print, training institutions, schools, etc.) which played an
important part in refurbishment process of housing sector in Slovakia. As the
experience clearly show, the basis of positive development in housing sector
was well written law on housing ownership which eliminated possibility to
combine the process with all “ways of working”
4. Conclusion and Recommendations:
Comparison of existing Ukrainian law and its amendment dated 2009 with
existing Slovak law, and with the experience with Slovak law development
and application, offers the following major issues:
1. The Ukrainian law and its amendment introduce unclear definitions at two
levels (association and union) which introduce confusion.
Recommendation:
Law should allow only one form of Home Owners Association (HOA) as
the entity responsible for management of the assets.
2. Ukrainian approach to housing policies does not in general, consider the
apartment owner to have ultimate responsibility for his/her property. The
amendment expects the former owner to invest in property which is now
owned by others (apartment owners), regardless of the lack of financial
resources.
Recommendation:
By transferring the ownership of the apartment, law must transfer full
responsibility for its future repairs and maintenance to the now owner(s).
The responsibility of the former owner (state) should be terminated by
transfer of ownership.
3. Ukrainian law does not provide specific guidance for decision-making
within the HOA
Recommendation:
Law should include establishing voting process for individual issues based
on their importance
12
4. Ukrainian law allows association to create for-profit entity, which is in
contrary with Slovak functioning non-profit status of HOAs
Recommendation:
Eliminate from the law the possibility of establishing HOA as an
organization for protection of HOA interest. Law should allow establishing
possibility to establish HOA as “common interest” organization based on
Civil Code
5. Ukrainian law assumes common management of multiple buildings and in
it section no 20 (likely copying the Russian law) establishes that: „The
former manager (owner, asset holder) of the residential building organizes
and funds the first complete overhaul of the building after the union’s
establishment according to the legislation.” By this requirement, it
practically eliminates responsibility of current owners to start taking care of
their property. This is a major problem with the law, as it is
counterproductive in housing stock improvement and also puts extreme
burden on state budget. It is therefore asserted that the amendment if not
changed, will influence the future progress inversely.
Recommendation:
It is necessary to establish whether Ukraine has sufficient financial
resources to include in the Law this condition, or whether solution to this
problem should be by another form – for instance establishing revolving
fond, or providing owners with soft loans etc.
13
ANNEX 49
Review and Comments
on Amendment
of
Draft Law of Ukraine “On Association of Co-Owners of Residential
Buildings”
Prepared For:
Ministry of Housing and Municipal Economy of
Ukraine
Prepared by:
Jaroslava Zapletalova
Housing Institute, c. a.
Bratislava, Slovakia
4th April 2011
Under the subcontract with:
2675 Morgantown Road
Reading, Pennsylvania 19607-9676
United States
Synopsis
This paper provides review and comments on the latest amendments to the “Law of
Ukraine on associations of co-owners of multi-apartment residential buildings”1 from
2002 and as amended in2005 and 2006 with „relatively well functioning“ legislative of
Slovakia relevant to the residential building sector. This document refers only to the
introduced amendments; the overall gap analysis were subject of earlier review.
(“ Про об'єднання співвласників багатоквартирного будинку ( Відомості Верховної Ради
(ВВР), 2002, N 10, ст.78 ) ( Із змінами, внесеними згідно із Законом N 3053-IV ( 3053-15 ) від
03.11.2005, ВВР, 2006, N 4, ст.60 )
1
Draft amendment introduces significant changes into legal framework for co-ownership
relationships in apartment houses which need to respect its typical integration of exclusive
and joint ownership of real estate. It includes direct apartment ownership and joint ownership
of common premises and facilities in the house. This legal framework for ownership was
incorporated from Anglo-Saxon legal system into many European and Asian regulations in
modern era, while it is predominantly enforced in USA, Canada and Germany as of 1951.
With greater or smaller success depending on individual legal formulations, it was adopted in
almost all Eastern European countries.
Legal framework for ownership of multi-apartment houses is important not only for
relationships between individual owners of residential and non-residential premises in these
houses, but also for housing management, operation and safety of these buildings. That is
related to legal contacts with other entities, such as natural persons or legal entities – e.g.
housing managers, suppliers of services, construction companies or banks etc. which
provide various types of services for these buildings based on contractual relations.
Privatization of apartment houses in Eastern European countries significantly changes the
status of apartment users – from tenants to owners. This fact implies new circumstances –
new rights and duties. This is a reality which must be clear to apartment house owners as
well as other stakeholders including state and local administration bodies which will still be
able to intervene with affairs of apartment houses based on various types of legislation (e.g.
building law, technical and safety standards, etc.) or by means of contractual relationships.
In majority of Eastern European countries, the housing stock suffers by greatly neglected
maintenance and ineffective energy consumption of all types, thus it is inevitable to enshrine
owners’ obligation to take care of it in the law. Meeting these requirements will demand a lot
of resources related to ownership rights of new owners (the same way owners of family
houses take care of their houses). State and local support must be limited to inevitable
motivational level and must be strictly defined. The most inadequate form of support is any
across-the-board subsidy. The role of this law is to settle relationships in houses with
apartments owned by citizens, so that the wording of the law itself makes it obligatory to
collect finances for repairs and thus facilitate energy saving. At the same time, the law must
also clearly define the way in which default payments may be claimed from defaulters and
what can be settled by lawful registration of pledge to apartment of all owners in the registry
of real estate ownership.
The tasks related to refurbishment and energy saving can be facilitated by owners
themselves once they combine their own resources and bank loans, which is a model that
can be observed in some countries and which proved to work in several Ukrainian projects.
However, banks will not grant loans without clear specification of partners, majority consent
of apartment owners and sufficient loan guarantee along with possibility for claiming
receivables. Thus, such mechanism must be in line with several related laws and other
necessary tools, such as guarantee fund establishment to help with guarantee provision. The
state should only retain money to finance repairs resulting from original planning errors of
panel construction – should such cases appear in Ukraine. Current draft of amendment fails
to incorporate this overall mechanism to necessary extent.
On the other hand, draft amendment adequately omits residential complex as one of the
options for establishing owners’ association (Art. 1). This way, it creates conditions for
association to be formed within individual houses, which helps to make economic
management of funds generated jointly by apartment owners and saved on a house account
much more transparent. As a result, individual owners will be more interested in financial flow
in the house. Unless apartment owners start to feel like real stakeholders in the house
demanding information on financing of house operation, maintenance and repair, no real
improvement of their property can be expected. Such mental and physical change should be
of key interest to everybody who takes part in transformation changes of state economy.
Definitions in the Article 1 should be complemented by a definition of apartment house (in
order to distinguish it from a family house); furthermore a definition of apartment and possibly
also a room for permanent residence should be included too, since they form a direct subject
of ownership constituting co-owned share in jointly owned premises and facilities in the
house and respective land. Co-owned share forms prerequisite for payments into the fund of
maintenance and repair.
Art. 1 including definitions stipulates that federation of associations is a legal entity
established to advocate common interests of associations. On the other hand, Art. 8 defines
federation as an entity gathering associations with joint ownership of internal infrastructural
networks. Neither basic definition, nor Art. 8 define legal form of such entity – profit or nonprofit. Art. 16 states that general assembly may delegate some rights of their managing
bodies to the federation and it may be a founder of it. However, transfer of any rights shall
result in loss of owner’s direct stake in management of his/her apartment house. Thus, we
recommend elapsing from the law the level of federation as higher degree of an organization.
Association of co-owners is defined (Art. 4) as registered legal entity of non-profit character
(co-owners contribute to the operation and maintenance from their taxed income), which is
not meant to generate profit or distribute it among co-owners. Art. 17 implies that
associations may establish further legal entities – it is not clear what type; probable business
form could be deduced from Art. 21 on income of association and companies established
by the association. This wording is mutually irreconcilable. Abovementioned article allows for
establishment of fund of repair, however, its formulation does not make it clear whether its
formation can be understood as legal duty to establish a fund.
In its original version, the law had already tackled transformation of apartment cooperatives
to associations – Art. 5, which is a phenomenon not present in many countries and there are
still many organizational and property-related issues connected to this matter. That is why
this solution should be appreciated as one of the best.
Art. 24 covers relationship between former owner and jointly owned property. Participation
of a former owner should take the same form as in case of direct owners of apartments and
non-residential premises, but only in case of unsold residential and non-residential premises.
Once the last apartment or non-residential space was sold, mutual relationships should
cease to exist completely.
Article 25 deals with subsidies for apartment owners. This article very much depends on
overall state subsidy policy. In most countries, social assistance takes form of direct housing
allowance for those who need it due to low income to secure a decent housing. Thus, in the
future, this article may be amended as a result of price liberalization and related social
support adjustment on the level of state or region.
Author of the commentary:
Jaroslava Zapletalová, Housing Institute, 4th April 2011

here

Transcription

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