I&U Group secure EUR 15 million EBRD loan for 6 MW biogas project in Ukraine
In Ukraine, I&U Group, a vertically integrated agricultural holding engaged in crop farming and sugar production, has recently secured a senior long-term loan of up to EUR 15 million from the European Bank for Reconstruction and Development (EBRD). The EBRD is promoting investments in innovative technology and best practices associated with the use of agricultural waste in Ukraine by providing sustainable energy financing in line with its strategy for the country.
The funds will be used to finance the development, construction, and operation of a 6 MW biogas plant located at a sugar beet processing facility in the Kirovograd region of central Ukraine. According to EBRD, the financing package will consist of an EUR 13 million loan from the EBRD and an EUR 2 million concessional loan from the Clean Technology Fund (CTF) designed to support renewable energy and technology aimed at reducing carbon intensity.
This will be the first project supported under the Ukraine Agribusiness Waste Residues Window, funded by the CTF. According to media reports, it will also be the first facility in Ukraine to use an innovative “Austrian” biogas production technology to process sugar beet pulp, which will reduce energy consumption and supply power to the grid – subject to project completion by December 2019 to avail of the current feed-in tariff (FIT) scheme.
The digestate from the anaerobic digestion (AD) process will be used as biofertiliser, partially replacing the use of chemical fertilisers. The project will benefit from a US$534 800 incentive grant from the EBRD’s Finance and Technology Transfer Centre for Climate Change (FINTECC) programme, funded by the Green Environment Facility and designed to transfer technology in the area of climate change mitigation and adaptation.
In addition, the project will receive an EUR 22 150 grant from the European Union’s Neighbourhood Investment Facility while a significant part of the legal due diligence cost will be covered by grant funding from the Japan-EBRD Cooperation Fund (JECF).
The EBRD is the largest international financial investor in Ukraine. To date, EBRD has made a cumulative commitment of almost EUR 12.1 billion across some 400 projects, including biogas, since the start of its operations in the country in 1993.