Ukraine Energy Support Fund
Ukraine Energy Support Fund
Upon request by the European Commission and in agreement with the Ministry of Energy of Ukraine, the Energy Community Secretariat set up the legal framework for the Ukraine Energy Support Fund to counteract the impact of the Russian invasion.
What value does the Ukraine Energy Support Fund add?
Much support is already offered to the Ukrainian energy sector in its struggle to keep the light and the heat on, by private and by public donors. The Fund aims at complementing these efforts by providing capital to the energy companies not able to raise the financial means to pay for their most-needed procurements. This is based on the assumption that the energy companies generally know best what they need, how urgently they need it and whether or not their financial situations allows them to engage in a procurement. The Fund matches demand for financing necessary procurements upon initiative of the companies and thus effectively channels available donations to where they can make the most useful impact. The Fund also makes it possible to support the Ukraine energy sector for those donors unable to provide assistance in kind.
What is the Ukraine Energy Support Fund?
The Fund is the sum of all grants to Ukraine (represented by the Ministry of Energy of Ukraine) transferred by donors to a special purpose bank account at a bank in Austria.
What kind of purchases does the Ukraine Energy Support Fund cover?
Eligible for disbursement from the Fund are
- purchases of necessary equipment, spare parts, other gear etc.,
- all types of fuels needed to generate heat and electricity as well as electricity itself,
- services such as repairs or reinforcements and
- capital inflow.
Besides the four categories of eligible purchases, the Fund will also cover necessary ancillary costs such as transportation. Donors will be able to earmark their donation for specific purposes.
Which energy companies in Ukraine are eligible for grants on the Ukraine Energy Support Fund?
The Ministry of Energy of Ukraine keeps and updates a comprehensive list of eligible energy companies in Ukraine, public and private. Donors can further narrow down the list of companies eligible for disbursements from their funds.
How will energy companies in Ukraine procure the necessary equipment, fuels, services or capital inflow?
Under normal circumstances, an energy company in Ukraine would use its established supply channels, markets and follow Ukrainian procurement rules. Since this is not possible during the state of war, the procurement of equipment, fuels or services will be supported by international governmental procurement agencies, which offer their services on the basis of arrangements with the Ministry of Energy of Ukraine. This introduces transparency in the process. Given the time-sensitivity, the time for procurement through these agencies is strictly limited. The supply contract will be concluded directly between the Ukrainian energy company and the selected supplier.
What is the procedure for grants made to the Ukraine Energy Support Fund to reach their beneficiaries?
Before a supply contract is procured, an amount corresponding to the likely price of the supply will be reserved by the Fund, to guarantee that a transaction will be financed and to avoid that grants get stuck. Upon the conclusion of a supply contract, grants corresponding to the transaction price (as well as associated costs, if any) will be disbursed either directly (by a bank transfer to the bank account of the supplier with whom the Ukrainian energy company has concluded a contract), or a guarantee in favour of the latter will be issued. Thus, grants go straight to the provider of needed equipment, fuel, services or capital inflow, and not indirectly through the energy companies’ or the Ministry’s accounts. Before any disbursement is being made, however, independent international experts will assess the necessity, usefulness, urgency, lack of capital etc. based on information provided by the energy companies, on which basis the Ministry will approve or reject the transaction.
Is there any prioritization in the demand of Ukrainian energy companies to be matched with grants from the Ukraine Energy Support Fund?
To ensure a certain level of prioritization, the Ministry of Energy of Ukraine classifies requests for support in accordance with objective and predetermined prioritization criteria. The criteria do not allow for discretionary decisions. The Ministry will be supported by international experts in this task.
Will the donor be involved in any individual transactions?
Ukrainian energy company and its suppliers, confirmed by the Ministry of Energy of Ukraine and settled by disbursements from the Fund. Disbursements can be attributed to individual donors upon their request. Donors may unilaterally limit the use of their grants to certain types of purchases and/or companies.
Under which circumstances will grants be returned to the donor?
Grants not disbursed will be returned to the donor upon termination of the Fiduciary Agreement, the contract which creates the legal framework of the Fund. Donors may terminate the Fiduciary Agreement unilaterally and at any time with a notice period to be agreed bilaterally. Immediate termination and repayment is envisaged in events defined as ‘change in control’ or ‘force majeure’ or in case the grant is not used for the purpose for which it has originally been requested for, as monitored by international experts.
What is the contractual framework for the Fund?
The contractual framework in two alternative ways:
- A bilateral agreement between the donor and the fiduciary, which is further implemented through a Fiduciary Agreement between the Secretariat and the Ministry of Energy
- A trilateral agreement Fiduciary Agreement between a donor, the Ministry of Energy and the fiduciary of the special purpose account.
In both cases, the Fiduciary Agreement is complemented by a so-called Framework Agreement between the Ministry of Energy of Ukraine and individual Ukrainian energy companies. The Framework Agreement stipulates the binding rules and procedures leading up to the disbursement of funds.
Who manages the Ukraine Energy Support Fund?
The Fund is managed by the Energy Community Secretariat, the independent executive institution of the Energy Community, an international organization based in Vienna, Austria.
The Secretariat acts as fiduciary of the grants made by donors, and disburses them strictly in line with the provisions of the Fiduciary Agreement and its accounting, reporting and auditing rules. The Secretariat will report regularly to the donors and ensure an independent auditing of the special purpose account and all related records. Its services are free of charge.
About Ukraine support activities
About Ukraine support activities
Due to the war, Ukraine, one of the Energy Community Contracting Parties, is facing an existential threat, its energy infrastructure is in critical condition and fuel supplies are at risk.
The war is causing suffering on a dramatic scale, leaving hundreds of thousands of families and businesses without energy supply. This means no electricity, heating, hot water and hot food. Donations of emergency energy equipment, fuels and funds are urgently needed to repair damaged energy infrastructure and restore energy supply.
The Energy Community Secretariat (ECS), based on the direct request of the Ministry of Energy of Ukraine for practical help in the current situation, is engaging in supporting Ukraine to keep its energy system functional.
Schematic description of the support activities
Document Name Countries Categories Published on Ukraine12.10.2022
- USTF support in numbers
USTF support in numbers
900 METRIC TONS
of equipment successfully delivered or in preparation
9 000 METRIC TONS
of liquids in preparation
from 20 countries donated
delivered to Ukraine.
status: 24 November, 2022
- Most urgent needs
Most urgent needs after the targeted attacks on Ukrainian energy infrastructure
status: 20 October 2022
Document Name Countries Categories Published on Ukraine20.10.2022
- Ukraine Support Task Force
Ukraine Support Task Force
In the immediate aftermath of Russia’s invasion of Ukraine, the Energy Community Secretariat answered the call for help of Ukraine, by establishing the Ukraine Support Task Force (USTF). The Task Force is supporting Ukraine by coordinating the door-to-door delivery of specialized energy equipment, fuels and materials needed to repair infrastructure damaged during the war. Its main purpose is to assist Ukraine in keeping its energy system functional.
More than 12.000 items are on the list of emergency energy equipment urgently needed in Ukraine, such as power generators, transformers, insulators, clamps, cables-wires and connectors, circuit breakers, pipes, valves, communication devices or vehicles and many more.
Countries, companies and industry associations can provide energy equipment donations through a simple process, with no cost for the donors. Scroll down for details on how your country, company, or association can help Ukraine, and/or, contact the ECS-USTF (UkraineEmergencySupport@energy-community.org) directly.
How the USTF process works
The USTF assists donor companies and Ukrainian authorities through the whole donation process. From reaching out to potential donor companies and assisting them with the formal submission of their donation, through the logistics and following the customs clearance, all the way to the delivery of specialized equipment to the final destination in Ukraine, the USTF engages in a horizontally integrated, multi-stakeholder process.
The USTF cooperates closely with the European Commission and particularly the Emergency Response Coordination Centre (ERCC) of DG ECHO, the coordinator of the European Union Civil Protection Mechanism (UCPM), to ensure the delivery of energy-related humanitarian needs to Ukraine. The USTF feeds in transport requests to the ERCC, who, via the UCPM mechanism organizes the shipment from the sites of the donor companies. Together with the ERCC, USTF tracks the process, assists and coordinates each shipment at every step of the journey in Europe and within Ukraine.
The USTF is in daily contact with the Ministry of Energy of Ukraine to coordinate each shipment’s delivery, ensure that the list of emergency equipment needs is up-to-date, and disseminates the list of needs to key stakeholders and potential donor companies. The USTF consistently informs the Ministry of Energy of Ukraine about the upcoming and ongoing deliveries and their status, and assists each shipment until it reaches the beneficiary in Ukraine.
Schematic description of the USTF support activities
How to donate via the USTF process?
The USTF actively assists donor companies from the beginning to the end of the donation process within a clear and simple process. All support is provided free of charge.
- The USTF provides donors with the up-to-date list of emergency needs in Ukraine, which they can match with their inventories or procure new items.
- Donors benefit from simplified administrative procedures and support from the USTF in the preparation of the required documents based on the format required by the Emergency Response Coordination Centre (ERCC).
- All donations are automatically subject to a simplified customs clearance process for humanitarian assistance, ensured by the UCPM process, which is used for all other humanitarian help for Ukraine.
- ERCC takes care of the transportation of the donated equipment free of charge. Pick up is available from all EU Member States and even outside of the European Union.*
- The USTF informs the donor on the delivery status of the shipment.
* Iceland, Norway, Serbia, North Macedonia, Montenegro and Turkey are part of the UCPM mechanism. Shipments from Switzerland have been organized. On a case-by-case basis, a solution can be found to accommodate shipments from UK or countries beyond the above.
- News on Ukraine support activities
Latest Energy Community news on Ukraine support activities