The full-scale Russian invasion of Ukraine, and especially the systematic targeting of Ukraine’s national power grid, has accelerated the country’s ongoing embrace of renewable energy. Credit Agricole Ukraine has been engaged in this process since the prewar period and is now stepping up efforts to support Ukraine’s sustainable energy transition. To help facilitate a greener and more self-sufficient energy future, Credit Agricole Ukraine now offers a range of financing solutions while partnering with international financial institutions and with the National Bank of Ukraine.
“Financing renewable resources is one of the priority directions of our sustainable development strategy and an important initiative for the future of Ukraine,” says Nataliia Porvina, Head of the Agro Business Support and ESG Department at Credit Agricole Ukraine. “The main focus of the bank in this segment at present is supporting the energy transition of our clients.”
Credit Agricole’s focus on supporting Ukrainian businesses in their energy transition is not new but has evolved significantly since February 2022 amid wartime conditions. Prior to Russia’s full-scale invasion, many within the Ukrainian agricultural industry saw improvements in energy efficiency primarily as a way to open up additional growth potential, with investments in renewable energy typically viewed as an opportunity to benefit from the Ukrainian government’s green tariffs.
Attitudes began to change after the onset of Russia’s invasion, with Ukrainian farmers facing a range of more immediate issues relating to the rising cost of fuel and imports. The dramatically altered circumstances in the country increased the need for savings, helping to generate new momentum and additional interest in renewable energy options, while encouraging Ukrainian agribusinesses to seek ways to reduce their reliance on the national power grid.
This trend has continued to intensify in response to Russia’s targeted bombing of Ukraine’s energy infrastructure. The initial phase of Russia’s air strike campaign during the first winter of the war in late 2022 and early 2023 saw a rise in demand for short term options such as diesel-powered electricity generators. More recently, the destruction of a significant portion of Ukraine’s remaining power grid in spring and summer 2024 has sparked a comprehensive search for alternative sources of energy across the Ukrainian agricultural sector.
“We have witnessed a switch from the quick fix of generators to bigger and more sustainable energy solutions that can offer greater long-term reliability,” says Alexandre Tchesnakoff, a Management Board Member at Credit Agricole Ukraine. “This year, we are seeing far more solar, bio gas, and wind projects. Business owners are developing investment plans for the coming winter season and are also looking ahead to 2025 and beyond.”
Demand for the financing of energy projects has been strong, says Mr. Tchesnakoff. He notes that during the first half of the 2024 summer season, Credit Agricole Ukraine was able to build up a renewable energy portfolio of mostly small-scale projects focused on strengthening energy self-sufficiency that amounted to three hundred million euros. “And that is only our bank,” he comments. “I am sure other banks in Ukraine are also seeing similar interest.”
Nataliia Porvina notes that solar power and biogas projects are currently attracting the most interest among Credit Agricole’s Ukrainian clients as they seek to enhance their energy independence and reduce exposure to electricity supply problems. In addition to financing, the bank supports these efforts by offering expert guidance via teams of specialists who visit clients across Ukraine and provide detailed breakdowns of potential energy transition options. “Our experts spend around seventy percent of their time in the field. They consult with clients and give technological recommendations that also highlight potential savings and sustainability,” says Nataliia Porvina. “Our bank aims to serve as a center of Agro and ESG expertise; our mission is to help finance Ukraine’s green transformation.”
While wartime realities are playing a key role in driving Ukraine’s energy transition forward, the country’s parallel progress on the road toward future membership of the European Union is serving as an important additional factor helping persuade the country’s agribusiness owners to commit to a greener energy future. Ukraine was granted official EU candidate country status in June 2022, with membership talks officially beginning in spring 2024.
It is still likely to be many years before Ukraine finally joins the European Union, but as the process evolves and Ukraine incorporates more EU regulations into its national legislation, the agricultural industry will be obliged to adapt accordingly. “The EU integration process is helping to fuel a culture of sustainability and underlining the advantages of energy self-sufficiency,” says Alexandre Tchesnakoff. “Little by little, the mindset is moving.”
Credit Agricole Ukraine recently signed an agreement with USAID to provide cash back on financial leasing and support for SMEs updating their vehicles, equipment, and machinery to make their operational processes more environmentally friendly. All this adds up to improvements within the Ukrainian energy sector that could have a profound impact on the country’s agricultural industry for years to come.
Alexandre Tchesnakoff identifies the large-scale Russian bombardment of Ukraine’s energy infrastructure that took place in March 2024 as an important “wake-up call” for the country. He says it is now possible to identify signs of an historic shift taking place across the Ukrainian energy sector.
“Transformation is usually easier to pinpoint in retrospect and is not always visible while it is underway. But in two or three years time, the energy generation picture in Ukraine will be very different and we will then be able to recognize that much of this change began in spring 2024,” says Alexandre Tchesnakoff. “For us, this is a huge responsibility. We are here in Ukraine for the long term, which means that we adopt a long-term perspective rather than seeking short-term gains. It is important for us to be trusted, so we are always as transparent as possible. We try to be an innovative bank responding promptly to changes and remaining quite mobile, while at the same time we are unwavering in our financial monitoring standards.”