JUNE 2026
In the wake of “Affordable credits 5-7-9%” program’s success, Ukraine’s government launches similar state subsidy for medium and large enterprises seeking to deploy decentralized power generation assets. However, it appears to conflict with the NBU authority on the credit risks exposure, namely, non-performing loans and the foreign exchange risk; the State Budget funding is unsteady.
Enacted via Cabinet of Ministers Resolution No. 594 dated 29 April 2026, the initiative targets to pay some of the interest on the bank loans to procure equipment on gaseous, liquid and solid fuels, as well as energy storages and smart grids, including energy islands. The generation technologies in the centre of the interest are internal combustion engines and turbines, standalone or as a part of co-generation unit, whereas technologies and equipment for heat exchange, energy storage or energy management systems are not limited. It is also unclear, what part of the design, engineering and procurement part of the power project may be included in the loan to remain eligible for subsidy.
This instrument is a further specialization of the energy resilience programs, financed via the Ukraine Investment Framework (UIF) or the Ukraine Energy Support Fund (UESF), it makes the commercial bank loans more accessible through the direct budget support deployed by the Ukraine’s National Development Institution (NDI), started in January 2026 on the basis of former Business Development Fund, a showrunner for 5%-7%-9% program.
Importantly, the program intervenes into the NBU’s area of competence when it strive to exempt from the FX restrictions.
ISSUE: Potential conflict with the NBU casts a doubt on the viability of such financing instrument, to the extent the borrower hopes to pay for direct import of equipment or services, essential in the distributed generation projects of scale.
Eligibility
Financial intermediaries
The NDI will contract Ukrainian banks, who, in order to be eligible, need simply to comply with the banking laws and the economic sanctions laws of Ukraine.
Further limitations:
UAH-denominated
interest rate base at UIRD(i)+1.5% per annum with quarterly review
ISSUE: the bank’s margin spread may be too thin for the project to be profitablematurity cap 5 years
a grace period for principal and interest payments until the earlier of energy asset commission or 12 months from disbursement
maximum interest rate capped at 20% p.a.
ISSUE: current UIRD is 14.05%, which leaves little wiggle room for the fluctuationspenalty interest rate capped at 5% p.a.
arrangement fees capped at 0.5%
no treasury bonds or bank deposits as a security
no default on interest payments if the state fails to fund compensation for up to 9 consecutive months
ISSUE: requires bank to reserve funds for sub-standard loansdisbursements to the project contractors rather than the borrower
ISSUE: conflicts with the NBU’s regulations on the FX risk exposure in case of import contracts financingquarterly rebate to the NDI
(0.5% of the NDI funds held in the bank’s escrow)
Ultimate Borrowers
Only (a) solvent Ukrainian legal entities that (b) qualify as medium or large enterprises and (c) have only Ukrainian residents as UBOs (ultimate beneficial owners). Notably, sanctioned entities and businesses with arrears in tax or social security mandatory payments are ineligible to benefit from the program.
Application and deadline
Online filing on the NDI’s Support Navigator Platform; cutoff date is 15 May 2027, that is, one calendar year from the effect of the program.
Scope of Promise
Step In Commitment
The NDI commits to banks–counterparties to step-in for interest stabilization payment on a monthly basis, keeping an effective rate for the borrower at fixed 10% p.a. No rebate to the NDI is due, however, if the rate drops below 10%.
Principal Covered
Minimum loan facility volume eligible for compensation is capped at UAH equivalent of €1 million (reduced to €0.5 million for front-line territories and ex-combat zones), with €25 million ceiling per borrower
Budget Support
The Cabinet of Ministers will finance the budget program of decentralized (distributed) generation from the State Budget via transfers the NDI.
ISSUE: so far there are none, save for NDI’s own functioning funds of UAH 18 bn in 2026. The pilot program is for two years, but no amounts are committed for 2027 or 2028, which prompts an assumption that either the program will be limited by reserves needed to be created for 1-5 year loan tenures or the subsidy will be subject to disruptions in the State Budget planning and implementation.
Escrow Security Mechanism
The banks will hold NDI liquidity in escrow to secure interest compensation, able to plan and predict their exposure.
