(Photo: Tor Karstensen, Novytec Ltd.)

By committing to EU directives on renewables, Ukraine has to establish additional environmental friendly energy resources by 2020. Arne Jakobsen in AICE Hydro wants to help develop small-scale hydropower industry in Ukraine, in order to make Ukraine reach their energy goals and commitments to the EU.

Today, Ukraine produces most of their energy from nuclear power and coal, and is more or less self-efficient. Nevertheless, this is not neither sustainable nor environmental friendly.

– Investing in hydropower could replace some of their existing energy resources, and by that bring Ukraine one step closer to the EU’s targets. Behind the commitment to the EU directives lies Ukraine’s political goal regarding European integration, says Jakobsen.

Potential for renewable energy

Ukraine has several old hydropower plants connected to their rivers. Most of these were built during the Soviet times, and are disused today.

– With Ukraine’s rivers and mountains, the potential for hydropower is absolutely there. All together with the country’s need for renewable energy resources, this project attracts attention and interest among Norwegian investors, says Jakobsen.

Jakobsen is the founder of the Norwegian small-scale hydropower company «Blåfall». Supported by the Norwegian Agency for Development Cooperation (NORAD), Jakobsen and is team are now working on a feasibility study, and by that trying to confirm the potential of the project. The networking part is also crucial.

– I have spent a lot of time in Ukraine the previous years, and think we have a created a good basis for the project to be realized. The goal is to build a version of what I did back in Norway – a Ukrainian «Blåfall», he says.

A mix of Nordic and Ukrainian investors

Jakobsen emphasizes the fact that the project is interesting and attractive also from a Norwegian perspective.

– The business for building hydropower plants in Norway is going downwards, which means a lower pressure for Norwegian suppliers today. Of course building hydropower plants takes major investments in the initial phase, but on the other hand the costs for energy production after the plant is built is minimal, he says.

According to Jacobsen’s project plan, the construct and building phase should be completed within the next five years. The business model relies on having a mix of Nordic and Ukrainian investors, as well as Norwegian suppliers.

– We want to build new hydropower plants, besides renewing the old ones from the Soviet times. Our goal is to have five to ten projects ready for investments within the first months of 2017, says Jakobsen.

Challenge accepted

The area for the projects is set to the Western part of Ukraine, centred around Lviv. Jakobsen thinks it is exclusively positive that no one has worked on a project like this here before.

– We see huge potential, and are willing to take the risk, he says.

Jakobsen claims there has been a change of mentality in Ukraine the past years, and he experiences what he describes as a «Western way of doing business».

– Technically there is of course a risk; we have a war in the Eastern part of the country, corruption issues, and also a state that is low rated in the financial markets, Jakobsen says.

Nevertheless, Jakobsen chooses to focus on the possibilities.

– By avoiding standing in line with other investors we do not have to fight to reach our goals. If we succeed with this project, we will really succeed. And besides that – if there were no obstacles, what would be the fun, he says.