Investment in Support of Energy Efficiency

Ukraine faces specific challenges in attracting energy investment required to reduce its currently high energy intensity, increase its energy production and upgrade its deteriorating energy infrastructure. Energy efficiency efforts and investment have been hampered by distortions in energy price setting and by an energy market structure dominated by state-owned firms. The June 2010 economic reform programme addresses these critical issues and sets objectives for accelerating privatisation in the energy sector and for gradually adjusting energy prices to the market level. Ukraine has developed a basic policy framework in support of environmentally friendly energy resources and technologies, but in the absence of energy price reforms the incentives for such investment have been limited.