President of Ukraine Volodymyr Zelenskyy has signed a law amending the Budget Code of Ukraine and introducing the State Fund for Decarbonisation and Energy Efficiency Transformation.

The corresponding draft law No. 8433 was developed by MPs with the participation of the Ministry of Infrastructure and the State Agency on Energy Efficiency and Energy Saving and was approved by the Parliament on 11 April this year.

The decision taken by the Parliament and the President is a landmark step that confirms that Ukraine is following the global decarbonisation trend against all odds.

Finally, for the first time in many years, Ukraine is implementing the European "polluter pays" principle, as envisaged by the EU Energy and Climate Action Management Regulation. This means that the funds from the CO2 tax will be used for energy efficiency purposes.

"The law gives the green light for the creation of a special fund in Ukraine, which will become a reliable and, importantly, permanent source of funding for numerous energy efficiency projects and programmes in various sectors of the economy," explained Anna Zamazeyeva.

"I am grateful to the President, the Parliament and everyone who contributed and supported the creation of the fund. As soon as the law was adopted, we, together with the team of the Ministry for Communities, Territories and Infrastructure Development, began to develop mechanisms for using the funds and creating financial instruments that could stimulate both decarbonisation and energy efficiency," explained Hanna Zamazeyeva.

"Thanks to the fund, the State Agency on Energy Efficiency and Energy Saving, as the country's chief energy manager, will implement state policy with the actual introduction of effective tools. It is planned to implement various mechanisms that exist in the world: from green bonds, ESCO projects, green lending to factoring and leasing.

The main objectives of the fund are:

• supporting government programmes for energy efficiency, alternative energy sources and decarbonisation;
• attracting international loans and grants for the implementation of investment projects;
• reliable payback and repayment of foreign investments and financial liabilities.

"By creating and filling the fund, we will be able to implement many programmes that will allow the population, businesses, and local authorities to become energy efficient and energy independent.

The saved funds can be used by communities for their reconstruction and social welfare, while enterprises can invest in their development and increase their competitiveness," summed up Anna Zamazeyeva.