The United Nations Development Programme (UNDP) and the Government of Norway have unveiled a significant $200 million initiative aimed at revitalizing Ukraine’s war-damaged energy sector. Announced in July 2023 during the Ukraine Recovery Conference in Rome, this initiative seeks to address both immediate energy crises and long-term modernization efforts in line with Ukraine’s national priorities.
This project is part of the UNDP’s broader Green Energy Recovery Programme, which operates through a multi-year, multi-donor framework. So far, it has garnered support from various countries, including Japan, Sweden, Denmark, the Republic of Korea, Belgium, Germany, and Iceland. Norway’s commitment has been particularly notable, with over $115.3 million already contributed to enhance energy access through high-capacity cogeneration units and solar power installations throughout the country.
Cecilie Myrseth, Norway’s Minister of Trade, Industry and Fisheries, emphasized the importance of this partnership, stating, “Our $200 million contribution… underscores Norway’s commitment to not only addressing immediate energy needs but also investing in Ukraine’s long-term energy security and a sustainable, green future.” This initiative is geared towards restoring heating and water supply for millions, while also supplying solar and backup battery systems to hospitals and water utilities.
In the context of long-term energy security, the initiative aims to accelerate the transition from fossil fuels to renewable energy sources. Plans include scaling solar energy for critical social infrastructure, enhancing energy efficiency in water supply and sewage systems, and implementing advanced energy storage solutions. The initiative will further support sustainable regulatory frameworks and promote women-led green energy projects.
The UNDP’s Acting Administrator, Haoliang Xu, highlighted the significance of this collaboration, stating, “UNDP deeply appreciates the support that Norway has provided… It is providing Ukraine with critical energy solutions they need now, while laying the foundation for its green transition.”
According to the World Bank’s Fourth Rapid Damage and Needs Assessment, Ukraine’s energy sector has sustained $20.51 billion in direct damage due to the ongoing conflict. Over half of the country’s generation capacity has been destroyed since the conflict began in February 2022, leaving many regions without reliable energy access.
In July 2023, the G7+ Ukraine Energy Coordination Group reaffirmed its support for Ukraine’s reconstruction efforts, with the Canadian government expressing its “unwavering commitment” to facilitate emergency repairs and expedite the deployment of renewable energy solutions. These efforts align with the European Union’s Clean Energy Package and Ukraine’s National Energy and Climate Plan, which aim to advance energy transition principles towards achieving net-zero emissions by 2050.
Since 2022, the G7+ group has mobilized over $7 billion in energy assistance for Ukraine. The country has demonstrated resilience in recovering its energy infrastructure, utilizing concrete structures to shield vital power transmission substations from attacks. In the first half of 2024, energy companies are anticipated to repair significant portions of damaged facilities, including approximately 4 GW of thermal and hydropower plants, which will help mitigate the risk of long-term blackouts.
Additionally, around 1 GW of gas-fired and solar power capacity has been installed, including off-grid facilities. Despite the ongoing conflict, Ukraine’s domestic gas production increased by 2.2 percent from 2023 to 2024. The country has also benefitted from imported electricity to meet national demand, aided by supportive EU policies that raised the maximum permitted import capacity from 1.7 GW to 2.1 GW in December.
While the financial support from multiple donor countries has helped Ukraine rapidly rebuild much of its energy infrastructure, the increased reliance on imports has resulted in a significant rise in electricity prices. By 2024, electricity prices are projected to increase by over 30 percent for industrial customers and 63 percent for households.
Despite the challenges, Ukraine’s energy sector is on a path to recovery, though it is expected to take years and substantial investments to fully restore its capabilities. The coordinated international efforts, particularly through Norway and the UNDP, are crucial in ensuring that Ukraine can not only rebuild but also transition to a more sustainable energy future.
