When Ukraine unified household and commercial natural gas supply tariffs in April, in a bid to unlock much-needed funding from the International Monetary Fund, energy prices were expected to approximately double.
That means most Ukrainians are now paying a lot higher energy bills – more in summer than they paid last winter.
But not Galyna Matveeva, who lives in a 61-year-old building in Kyiv. She says she now spends about 60 percent less on her hot water supply and heating bills than she did two years ago.
That’s because two years ago the residents of her building, with financial support from the city administration, renovated the building’s heating system and heat insulated the apartment block.
Matveeva’s housing cooperative was one of at least 278 ones that took part in the government’s energy efficiency program. And Serhiy Savchuk, head of the State Agency on Energy Efficiency and
Energy Saving of Ukraine, hopes that in 2017 that number will rise by up to five times.
However, some families’ hopes to take part the government program are not likely to be realized yet. Since July 5, the “warm credits,” or government supported loans from a bank to pay for energy efficiency improvements to residential buildings, have been available only to legal entities, like housing cooperatives, but not to individuals or families.
Under the present program, the housing cooperative that represents Matveeva’s building paid Hr 130,000 ($5,200), while the Kyiv city administration provided another Hr 150,000 ($6,000).
The housing cooperative, which manages another building in the same district, took a “warm credit.” According to Matveeva, residents of that building borrowed Hr 200,000 ($8,000) and replaced the windows in the stairwells in 2015. A month later, the government paid them Hr 80,000 ($3,219) in compensation, and the city authorities recently ruled to compensate them another Hr 60,000 ($2,400).
Savchuk says these warm credits are not a burden to Ukrainians. He said that if a housing cooperative takes a loan worth Hr 500,000 ($20,120) for insulation measures, the monthly loan payment for a family would be from Hr 27 to Hr 97 ($1.08 to $3.90).
At the same time, every family will save up to five times more than that on its utility bills, he said.
Gennadiy Zubko, Ukraine’s deputy prime minister and minister for regional development, construction, housing and utilities, said at an open cabinet meeting in early July that the average Ukrainian family uses three to five times more energy compared to the average European family.
“Energy does not benefit our people, it just doesn’t reach them,” he said.
He said Ukraine uses 18 billion cubic meters of gas per year to heat apartments, 2 billion of which is lost in old, leaky supply pipelines, while 7 billion leak out of the heating systems of buildings older than 25 years that have not been modernized.
“And such buildings account for more than 75 percent (of the housing stock),” he said.
The government program, he said, would help Ukrainians reduce the amount of the energy they consume.
“We need Ukrainians to understand that each Ukrainian family has a partner – the Ukrainian state,” Zubko said. “We’re ready to share your costs.”
Roman Spivak, head of the Association on Energy Efficiency, a Ukrainian NGO, welcomed the program, although he urged the government to make the warm credits available to individuals and families immediately.
“This is a huge, huge problem,” Spivak told the Kyiv Post, saying that because the provision of individual credits has been delayed, housing cooperatives have also stopped taking the loans. “They’re afraid now.”
Spivak says the government would have done better to subsidize about 40 percent of the loan to legal entities and families, instead of starting with subsidizing 70 percent and then, when the money ran out, cutting people out of the program.
Another measure that the government should take, according to Spivak, is to make people install gas and heating meters before applying for the utilities subsidies.
“The meters switch on peoples’ brains,” he said, explaining that with the meters keeping track of how much of gas or electricity a person uses, people in turn start to use much less.
However, about a quarter of Ukrainians are still without meters, he said.
