What investment opportunities are available in the Ukrainian energy sector?

The Government Investment Promotion Office has prepared a study on the potential for development of Ukraine’s energy sector. The main areas for private investors

Ukraine continues to actively work on developing its energy sector despite the numerous challenges caused by the war.

For investors interested in a stable long-term return, it is important to understand that Ukraine not only offers a huge market for investments in traditional energy, but is also rapidly developing areas that are in line with global trends in the energy transition.

Investments in energy efficiency are not only business projects and investments in the development and competitiveness of enterprises – nationwide, all these projects will help reduce annual direct electricity losses, which reach more than $1 billion.

UkraineInvest, the government’s investment promotion office, has prepared an up-to-date analysis adapted to the new conditions and challenges facing the energy sector.

This study not only outlines the economic importance of the energy sector, which accounts for 8% of the country’s GDP, but also emphasizes its role in ensuring stable budget revenues.

The study provides a complete overview of the market, summarizing information on key trends, forecasts, opportunities and challenges in the energy sector of Ukraine, and provides a systematic picture gathered in one place, which greatly facilitates decision-making.

The data collected in the document is exclusive in nature, as it covers not only current economic indicators, but also in-depth analytical forecasts of the sector’s development until 2050, in particular, renewable energy sources, energy efficiency and new technologies. In addition, the study includes unique data on the volume of investments that have already been made in the sector and potential investment opportunities that are still waiting to be realized.

The document also emphasizes investment opportunities in renewable energy, which has high development potential in Ukraine. It particularly emphasizes such areas as solar energy, wind power, bioenergy production, and the use of small hydropower plants. A strong analytical base backed by concrete figures makes this study an indispensable resource for investors.

In 2023, investments in renewables amounted to USD 3.8 billion, and the share of these sources in the overall energy balance reached 14.3%. This is only the beginning, as this figure could increase to 40% by 2030.

Ukraine is actively working on implementing its 2050 strategy, which envisages a 45% reduction in the use of fossil fuels, an increase in the share of renewable energy to 70%, and the achievement of carbon neutrality. Expected investments in new capacity amount to USD 383 billion.

In terms of prospects for investors, the following areas are of the greatest interest:

• Renewable energy. As noted, Ukraine has significant potential in the development of solar and wind energy. According to the study, by 2050, 70% of energy is expected to be generated from renewable sources. This opens up huge opportunities for investment, especially given the government’s efforts to raise capital and support this area.
• Electricity storage. As the share of renewables increases, so does the need for energy storage technologies. Ukraine has already begun implementing projects to build energy storage facilities, with DTEK investing in the development of the first large-scale battery with a capacity of 200 MW. This investment niche has every chance to develop rapidly.
• Green hydrogen. Ukraine is one of the key candidates to become a supplier of green hydrogen to the EU due to its geographical location and significant renewable energy potential. The study emphasizes that hydrogen exports to the EU could start as early as 2030, which is one of the key priorities of the country’s energy strategy.
• Modernization of thermal power plants. Despite the gradual transition to renewable energy, Ukraine plans to modernize its existing thermal power plants to increase their efficiency. This is also an important area for investors, given the need to upgrade equipment and introduce new technologies.

The implementation of the planned projects described in the study will allow Ukraine to significantly reduce its dependence on energy imports and promote the development of domestic clean energy production.

Given global challenges and domestic needs, investment in Ukraine’s energy sector is one of the key ways to achieve energy independence. It is not only an opportunity to make a profit, but also a significant contribution to Ukraine’s stability and energy security.

Viktoriia Volovenko, Head of Analytics Department, Government Investment Promotion Office UkraineInvest

Translation: deepl