Clean Energy Investment in the Former Soviet Union (Ukraine and Kazakhstan)

The report examines the domestic contexts of Ukraine and Kazakhstan regarding clean energy investment. It identifies a shared legacy of high energy intensity and a common struggle with corruption, bureaucracy, and insufficient legal frameworks. While both countries possess significant renewable potential, they remain heavily reliant on conventional sources—Ukraine on nuclear and imported gas, and Kazakhstan on domestic coal and oil. The study highlights that the lack of market-based incentives, such as feed-in tariffs, and low electricity prices are primary obstacles to private investment. It also analyzes the role of the Kyoto Protocol's Joint Implementation (JI) mechanism as a potential financial driver, noting Ukraine's relative success in this area compared to Kazakhstan's delayed ratification process.

• The primary barriers to clean energy development in both Ukraine and Kazakhstan are a deficient post-Soviet investment climate characterized by corruption, bureaucracy, and an insufficient legal base, alongside a lack of specific incentives for renewables.
• Ukraine's energy policy focuses on reducing dependence on imported fossil fuels, particularly Russian natural gas, by increasing the use of domestic coal, nuclear power, and renewables. The National energy strategy until 2030 aims to reduce imported fuel share in the total primary energy supply from 54.8% to 11.7%.
• In Ukraine, early state support for wind energy failed because it targeted state companies and domestic producers of outdated technology, leading to low power generation and a lack of foreign innovation.
• Kazakhstan's energy sector is heavily reliant on coal, which provides approximately 85% of its electricity. The country faces significant power shortages, with projected deficits of 5.9 billion kWh by 2010, particularly in the Southern region.
• Kazakhstan possesses vast wind and solar potential, but renewables account for only 0.02% of the country's power consumption due to a lack of incentives and the low cost of coal-fired power.
• The Kyoto Protocol's Joint Implementation (JI) mechanism is a significant incentive for energy efficiency and renewables in Ukraine, particularly for coal mine methane and fertilizer production (N2O emissions), where IRR improvements can exceed 50%.
• Kazakhstan has not yet ratified the Kyoto Protocol, partly due to complex negotiations regarding its status as an Annex I country and its commitment to emission reduction targets.
• Low electricity tariffs in both countries act as a major deterrent for large-scale energy efficiency and renewable energy projects, as they provide no financial motivation for industrial consumers to upgrade technology.
• The Nova Eco wind project in Crimea, Ukraine, demonstrates that large-scale private investment is possible when backed by international consortia and multilateral banks, though its implementation depends on the approval of a 'green tariff' law.
• Kazakhstan's biofuel sector is primarily export-oriented toward Europe because low domestic gasoline prices make biofuels uncompetitive in the local market.

APA

International Institute for Sustainable Development (2008). Clean Energy Investment in the Former Soviet Union (Ukraine and Kazakhstan). https://www.iisd.org/system/files/publications/cei_ukraine_kazakhstan.pdf

Chicago

International Institute for Sustainable Development. Clean Energy Investment in the Former Soviet Union (Ukraine and Kazakhstan). 2008. https://www.iisd.org/system/files/publications/cei_ukraine_kazakhstan.pdf.

Wikipedia

{{cite report |author=International Institute for Sustainable Development |title=Clean Energy Investment in the Former Soviet Union (Ukraine and Kazakhstan) |date=August 2008 |url=https://www.iisd.org/system/files/publications/cei_ukraine_kazakhstan.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{internationalinstituteforsustainabledevelopment2008clean, author = {{International Institute for Sustainable Development}}, title = {{Clean Energy Investment in the Former Soviet Union (Ukraine and Kazakhstan)}}, institution = {International Institute for Sustainable Development}, year = {2008}, month = aug, url = {https://www.iisd.org/system/files/publications/cei_ukraine_kazakhstan.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }