When missiles began targeting Ukraine’s power grid, the country faced a stark choice: abandon long-term sustainability goals or double down on them. Ukraine chose the latter – mobilizing over $24 million in private investment for energy efficiency projects during its darkest hours.

This achievement emerged from a partnership between the Global Environment Facility (GEF), the United Nations Development Programme (UNDP) and Ukraine’s State Agency of Energy Efficiency. They utilised the ESCO (Energy Service Company) model, a financing mechanism that allows municipalities to upgrade infrastructure without needing to pay upfront costs.

Even as air raid sirens interrupted planning meetings and power outages became routine, this partnership helped transform Ukraine’s approach to energy independence, proving that crisis can accelerate – not halt – systemic change.

Rewriting the Rules in Record Time

By 2023, Ukraine’s ESCO market had nearly collapsed. The procurement process, designed for peacetime, required three years of historical energy consumption data – an impossible requirement for communities facing constant bombardment and blackouts.

The UNDP team saw an opportunity in the crisis. Working with Ukraine’s State Agency of Energy Efficiency, they helped slash the procurement timeline from nine months to just three, creating a fast-track mechanism that could respond to wartime urgency while maintaining transparency and accountability.

They also advised and pushed for legislative reforms allowing cities to install solar power stations at municipal facilities – making critical infrastructure independent of the vulnerable main electricity grid and immune to the blackouts that had paralyzed communities across the country.

Five Paths to Energy Independence 

Across 44 partner cities, the project pioneered five distinct ESCO approaches tailored to Ukraine’s wartime needs:

• Classic thermal modernization improved building insulation and heating efficiency in structures damaged or  currently place a significant burden on local budgets due to inefficient heat consumption.
• Solar power installations provided hospitals and water treatment facilities with reliable backup power.
• High-efficiency water pumping systems are reducing electricity consumption by up to 50%, cutting costs while ensuring communities maintain access to clean water.
• Street lighting modernization is delivering similar 50% energy savings while improving safety in cities navigating frequent air raid warnings after dark.
• Enhanced partnerships allowed municipalities to contribute funds or equipment and share in the resulting savings – distributing both costs and benefits across stretched wartime budgets.

To support implementation, UNDP partnered with German development agency GIZ to create an online learning course on municipal energy management, which is constantly available from the Prometheus platform. This training ensures local governments can manage these complex systems effectively despite staff shortages and displacement.