Energy Efficiency
23 November 2013
Joining Efforts to Engage Private Capital in Energy Saving Activities in Budgetary Institutions
On 22 November 2013, MFSI-II experts participated in a teleconference, which took place at EBRD with participants from Russia and the United Kingdom. The Ukrainian side was also represented at the teleconference by USAID and USAID’s Municipal Energy Reform Project in Ukraine (MERP). Discussed at the meeting were the ways of improving the legislative amendments with regard to the legal foundations for operation of energy service companies and implementation of energy service contracts.
As is known, there are two legislative drafts on this issue: one developed with support from EBRD, and another with support from the National Public Utilities Regulatory Commission (the “National Commission”). Even though MFSI-II experts participated in developing both bills, the latter incorporates all the proposals made by the MFSI-II experts. This draft is more mature, contains less risks, and is based on systemic foundations, while the EBRD legislative draft will need further elaboration.
Following the discussion, the participants decided to join efforts in developing the updated changes to the budget legislation and procurement legislation. The well-founded, finalized amendments to the budget legislation will be submitted to the Ministry of Finance of Ukraine.
The EBRD representatives from the United Kingdom have outlined the main directions of work in this area: 1) prepare a short document with key principles of energy service contracts; 2) develop a mechanism for implementation of such contracts; and 3) draft the agreed amendments to the Budget Code.
The abovementioned amendments should:
As is known, there are two legislative drafts on this issue: one developed with support from EBRD, and another with support from the National Public Utilities Regulatory Commission (the “National Commission”). Even though MFSI-II experts participated in developing both bills, the latter incorporates all the proposals made by the MFSI-II experts. This draft is more mature, contains less risks, and is based on systemic foundations, while the EBRD legislative draft will need further elaboration.
Following the discussion, the participants decided to join efforts in developing the updated changes to the budget legislation and procurement legislation. The well-founded, finalized amendments to the budget legislation will be submitted to the Ministry of Finance of Ukraine.
The EBRD representatives from the United Kingdom have outlined the main directions of work in this area: 1) prepare a short document with key principles of energy service contracts; 2) develop a mechanism for implementation of such contracts; and 3) draft the agreed amendments to the Budget Code.
The abovementioned amendments should:
- not effect the deficit of budgets and amounts of the State and local debts;
- ensure the legitimacy of conclusion of contracts by budgetary institutions for a long-term period;
- envisage payments under energy service contracts only within the amounts of saved funds.
Adoption of the finalized amendments to the Budget Code will ensure:
- transparency of arrangements for concluding and implementing energy service contracts;
- attractiveness of the budgetary sphere for potential investors in the energy performance sector by means of guaranteeing the protection of their rights;
- reducing the energy dependence of Ukrainian cities.
Glyanec