UKRAINE—IFC, a member of the World Bank Group, is providing a financing package of up to $50 million equivalent to OTP Leasing in Ukraine to scale up sustainable energy investments, particularly for small and medium enterprises (SMEs).

IFC said in a statement that Ukraine is among the world’s most energy-intensive economies, partially attributed to its large industrial base with prevalently outdated and inefficient production technologies.

“This first IFC green-leasing project in Ukraine aims to promote growth in the country’s leasing sector, especially among smaller agricultural players and entrepreneurs,” said Georgina Baker, IFC Vice President for Europe, Central Asia, Latin America, and the Caribbean.

“It will also help attract other investors, ultimately bolstering Ukraine’s climate finance market, enhancing access to finance, and creating jobs,” added Baker.

The member of the World Bank Group notes that improvement of supply-side efficiency in the power sector, increasing the share of renewable energy, and enhancement of end-use energy efficiency are critical for Ukraine to sustain economic growth.

The financial institution opined that long-term financing—currently not readily available in Ukraine, especially for SMEs—will enable businesses to acquire energy-efficient machinery and upgrade their facilities with modern equipment to support a lower carbon footprint.

“Historically, the scarcity of long-term funding has limited the ability of businesses, especially SMEs, to finance the acquisition of modern technologies and equipment,” said Andrii Pavlushyn, OTP Leasing CEO.

“Our cooperation with IFC aims to help change that and encourage private sector investment in sustainable technologies,” added Pavlushyn.

The Ukrainian leasing market is far below its potential for supporting businesses, especially SMEs.

At the same time, sustainable energy financing and leasing make an ideal combination, as leasing products for businesses are especially focused on various types of energy-efficient equipment and machinery.

According to the IFC, the financial package includes $20 million equivalent from IFC’s own account, $20 million from Climate Investment Funds, and a syndicated loan of up to $10 million equivalent, noted IFC.

IFC also has an ongoing advisory project that aims to develop new areas of green finance in Ukraine.

The Ukraine Green Finance Program helps increase investment in energy efficiency and renewable energy in the country.

During the last four years the project has helped provide green loans worth $800 million.