A U.S. Agency for International Development plan to improve Ukraine’s energy security saw its formal launch ceremony in Kyiv on Feb. 14.
Under the plan, USAID awarded $85 million to U.S.-based engineering and consulting firm Tetra Tech to help reform and upgrade Ukraine’s energy production, governance and distribution. The project will try to liberalize energy markets, expand natural gas, push renewable energy investment and make heating more affordable at a district level.
“At its core, the project is about nothing less than the security of Ukraine’s national sovereignty,” USAID mission director in Ukraine, Susan Fritz, said in a speech at the launch gala at Fairmont Grand Hotel Kyiv, on the Podil waterfront. “For Ukraine to be truly secure, it must have access to secure, reliable, affordable and resilient sources of energy.”
Tetra Tech had already started working on the project since it won the USAID contract in July 2018. The formal launch was pushed back to February, in order to coincide with the conclusion of two preceding USAID-funded energy projects. The U.S. government shutdown at the turn of the year also contributed to the delay.
“We are proceeding in all sectors: gas, electrical markets, renewables and district heating,” said Michael Hajlny, Tetra Tech’s head of party on the Energy Security Project.
Ukraine hopes to scale up natural gas production for itself and for export. Much of the country’s reserves are untapped. The government is hoping to attract and partner with foreign investors to develop gas, improve distribution and reduce the region’s reliance on Russian pipelines.
The country’s energy markets need reforms to become more competitive. Under the project, Tetra Tech will consult on the creation of an independent energy regulator and the creation of new legislation to support these goals.
The project will also aim to create financial incentives to attract more private investment in renewable energy, to meet the Ukrainian Ministry of Energy and Coal Industry’s eventual plan to reduce reliance on carbon.
The share of renewable energy generation in Ukraine is only around 2 percent. Ukraine’s Ministry of Energy aims to have a quarter of its energy come from renewable sources by 2035.
(See USAID’s factsheet on Ukraine’s greenhouse gas emissions and greenhouse reduction commitments here.)
Finally, the plan calls for reform of district heat and energy metering and distribution, to make it more affordable and reliable for Ukrainians.
When asked what he sees as the biggest challenges facing the project, Hajny said it is “coordination among stakeholders.”
Tetra Tech has been present in Ukraine since 1998 and has worked on five projects related to anti-corruption reforms, according to the company’s statements.
