MEZZANINE FINANCING OF UKRAINE'S ENERGY INFRASTRUCTURE IN THE POST-WAR RENEWAL
DOI:
https://doi.org/10.17721/1728-2667.2026/228-1/9Keywords:
Mezzanine financing, Energy infrastructure financing, Forms of mezzanine financing, Post-war recovery of Ukraine’s energy sector, Securitization with tranching, Subordinated debtAbstract
B a c k g r o u n d . The Government of Ukraine has developed the Energy Strategy up to 2050, which aims to strengthen energy security and resilience and introduces targets for energy efficiency, environmental safety, reducing carbon emissions, etc. Postwar recovery combined with simultaneous modernization of Ukraine's energy sector will require the mobilization of significant financial resources, highlighting the importance of examining advanced global experience in attracting investment to energy infrastructure. The aim of the article is to substantiate promising methods of financing energy facilities for their implementation and application in the Ukrainian economy during the post-war renewal period.
M e t h o d s . Employed in the study include factual and situational analysis, synthesis, deduction, systems approach method, and theoretical generalization.
R e s u l t s . The article analyzes global experience in applying and combining methods of financing energy infrastructure. It formulates the key principles for mobilizing investment in modern energy. The study provides analytical conclusions with justifications regarding the prospects and relevance of implementing and applying mezzanine financing for the post-war renewal of Ukraine's energy sector. The most priority and optimal mezzanine forms of attracting investments to the energy sector are identified.
C o n c l u s i o n s . The study distinguishes the key principles for mobilizing investment in the energy sector, namely: consideration of energy security and socio-economic stability aspects, mobilization of non-state financing, minimization of the cost of capital, harmonization of the project's cash flows, fair risks and returns allocation. Based on global experience, a comparison of primary capital mobilization methods for energy infrastructure (from the state/IFIs, equity, debt, mezzanine) is performed. The prospects and relevance of mezzanine financing for implementation and application in the Ukrainian economy are substantiated. The most optimal forms of mezzanine financing for the energy sector are identified as securitization with tranching and subordinated debt financing. It is determined that Ukraine's institutional framework for these capital raising instruments has the potential for improvement and represents a promising direction for further researches. The study recommends the prompt implementation and institutionalization of mezzanine financing in the Ukrainian economy.
Downloads
References
Cabinet of Ministers of Ukraine. (2020). On certain issues of critical infrastructure facilities (Resolution dated October 9, 2020 No. 1109) [in Ukrainian]. [Кабінет Міністрів України. (2020). Деякі питання об'єктів критичної інфраструктури (Постанова від 09.10.2020 р. № 1109)]. https://zakon.rada.gov.ua/laws/show/1109-2020-п#Text
Deloitte. (2023). Financing the green energy transition: a US$50-trillion catch. https://doi.org/10.13140/RG.2.2.18130.94406
Deloitte. (2024). Financing the green energy transition: Innovative financing for a just transition. https://doi.org/10.13140/RG.2.2.35266.59848
European Commission. (2019). The European Green Deal. Communication from the Comission of 11 December 2019. https://eurlex.europa.eu/legal-content/EN/TXT/?uri=celex:52019DC0640
European Commission. (2022). Amending Delegated Regulation (EU) 2021/2139 as regards economic activities in certain energy sectors and Delegated Regulation (EU) 2021/2178 as regards specific public disclosures for those economic activities.Commission Delegated Regulation (EU) 2022/1214 of 9 March 2022. https://eur-lex.europa.eu/eli/reg_del/2022/1214/oj/eng
González-Ruiz, J., Botero-Botero, S., & Duque-Grisales, E. (2018). Financial eco-innovation as a mechanism for fostering the development of sustainable infrastructure systems. Sustainability, 10(12), 4463. https://doi.org/10.3390/su10124463
Halbout, J., & Riboud-Seydoux, M.-N. (2022). Financing of energy investment. In M. Hafner, & G. Luciani (Eds.), The palgrave handbook of international energy economics (pp. 301–324). Springer International Publishing. https://doi.org/10.1007/978-3-030-86884-0_17
Karakosta, C., Corovessi, A., & Vryzidis, I. (2025). Unlocking sustainable financing practices for energy efficiency projects: a multi-country analysis. Energies, 18(5), 1107. https://doi.org/10.3390/en18051107
Kudrjashov, V. (2021). Critical infrastructure and its functions. RFI Scientific Papers, 2(95), 5–24 [in Ukrainian]. [Кудряшов, В. (2021). Критична інфраструктура та її функції. Наукові праці НДФІ, 2(95), 5–24].https://doi.org/10.33763/npndfi2021.02.005
Kurylek, Z., & Porebski, D. (2022). Mezzanine capital analysis and financing results for companies. European Research Studies Journal, XXV,(4), 267–282. https://doi.org/10.35808/ersj/3081
Ministry of Economy of Ukraine. (2023). Ukraine's recovery plan from the consequences of the war [in Ukrainian]. [Міністерство економіки України. (2023). План відновлення України від наслідків війни]. https://komprompol.rada.gov.ua/uploads/documents/31278.pdf
Ministry of Energy of Ukraine. (2023). Ukraine – the energy hub of europe. The government approved the energy strategy until 2050 [in Ukrainian].[Міністерство енергетики України. (2023). Україна – енергетичний хаб Європи. Уряд схвалив Енергетичну стратегію до 2050 року]. https://mev.gov.ua/novyna/ukrayina-enerhetychnyy-khab-yevropy-uryadskhvalyv-enerhetychnu-stratehiyu-do-2050-roku
Naumenkova, S., Mishchenko, S., & Tishchenko, I. (2024). Project financing in the context of the implementation of the "Ukraine Facility Plan". Economic Scope, 191, 142–153 [In Ukrainian]. [Науменкова, С., Міщенко, С., & Тіщенко, Є. (2024). Проєктне фінансування в умовах реалізації "Ukraine Facility Plan". Економічний простір, 191, 142–153]. https://doi.org/10.32782/2224-6282/191-24
NEA. (2024). Effective frameworks and strategies for financing nuclear new build (NEA No. 7684). OECD Publishing.
Nijs, L. (2014). Mezzanine financing: Tools, applications and total performance. John Wiley & Sons Ltd. https://doi.org/10.1002/9781118797075
OECD. (2015). Policy guidance for investment in clean energy infrastructure: Expanding access to clean energy for green growth and development. OECD Publishing. https://doi.org/10.1787/9789264212664-en
OECD. (2018). Developing robust project pipelines for low-carbon infrastructure. OECD Publishing. https://doi.org/10.1787/9789264307827-en
OECD. (2020). Strengthening the role of private finance in infrastructure development in eastern partner countries. OECD Publishing.https://doi.org/10.1787/14ba8c21-en
OECD. (2021). OECD energy investment policy review of Ukraine. OECD Publishing. https://doi.org/10.1787/6e6e58c6-en
OECD. (2022a). Clean energy finance and investment roadmap of India: Opportunities to unlock finance and scale up capital. OECD Publishing. https://doi.org/10.1787/21b6e411-en
OECD. (2022b). OECD blended finance guidance for clean energy. OECD Publishing. https://doi.org/10.1787/596e2436-en
OECD. (2024). Clean energy finance and investment roadmap of the Philippines, green finance and investment. OECD Publishing. https://doi.org/10.1787/7a13719d-en
Petlenko, Y. (2024). Financing green energy for enhancing energy security in Ukraine. Financial and Credit Activity Problems of Theory and Practice, 2(55), 161–179. https://doi.org/10.55643/fcaptp.2.55.2024.4299
Rajavuori, M., & Huhta, K. (2020). Investment screening: Implications for the energy sector and energy security. Energy Policy, 144, 111646. https://doi.org/10.1016/j.enpol.2020.111646
Soboliev, O., & Zatonatska, T. (2024). Transformation of state regulation in the energy sector under the influence of the Russian-Ukrainian war. Bulletin of Taras Shevchenko National University of Kyiv. Economics, 2(225), 15–26 [in Ukrainian]. [Соболєв, О., & Затонацька, Т. (2024). Трансформація державного регулювання у сфері енергетичної галузі під впливом російсько-української війни. Вісник Київського національного університету імені Тараса Шевченка. Економіка, 2(225), 15–26]. https://doi.org/10.17721/1728-2667.2024/225-2/2
Symonenko, O., & Tsyganov, S. (2024). Concept of low-carbon model of economic development: theory and transition mechanisms. Bulletin of Taras Shevchenko National University of Kyiv. Economics, 1(224), 123–129. [in Ukrainian]. [Симоненко, О., & Циганов, С. (2024). Концепція низьковуглецевої моделі розвитку економіки: теоретичний вимір механізмів переходу. Вісник Київського національного університету імені Тараса Шевченка. Економіка, 1(224), 123–129]. https://doi.org/10.17721/1728-2667.2024/224-1/14
Tetrevova, L., & Svedik, J. (2018). Mezzanine financing instruments in comparison to the classic financing sources. Business, Management and Education, 16, 133–146. https://doi.org/10.3846/bme.2018.2205
Total assets of banks in Ukraine (2008–2025). (2025). Minfin.com.ua [In Ukrainian]. [Активи банків України (2008–2025). (2025). Minfin.com.ua]. https://index.minfin.com.ua/ua/banks/stat/active/United Nations. (2015). Paris Agreement (International Agreement of 12 December 2015). https://zakon.rada.gov.ua/laws/show/995_l61#Text
Verkhovna Rada of Ukraine. (2000). On banks and banking activities (Law of Ukraine dated December 7, 2000 No. 2121-III) [in Ukrainian]. [Верховна Рада України. (2000). Про банки і банківську діяльність (Закон України від 07.12.2000 р. № 2121-III)]. https://zakon.rada.gov.ua/laws/show/2121-14#Text
Verkhovna Rada of Ukraine. (2005). On mortgage bonds (Law of Ukraine dated December 22, 2005 No. 3273-IV) [in Ukrainian]. [Верховна Рада України. (2005). Про іпотечні облігації (Закон України від 22.12.2005 р. № 3273-IV)]. https://zakon.rada.gov.ua/laws/show/3273-15#Text
Verkhovna Rada of Ukraine. (2006). On capital markets and organized commodity markets (Law of Ukraine dated February 23, 2006 No. 3480-IV) [in Ukrainian]. [Верховна Рада України. (2006). Про ринки капіталу та організовані товарні ринки (Закон України від 23.02.2006 р. № 3480-IV)]. https://zakon.rada.gov.ua/laws/show/3480-15#Text
Verkhovna Rada of Ukraine. (2021a). On critical infrastructure (Law of Ukraine dated November 16, 2021 No. 1882-IX) [in Ukrainian]. [Верховна Рада України. (2021a). Про критичну інфраструктуру (Закон України від 16.11.2021 р. № 1882-IX)]. https://zakon.rada.gov.ua/laws/show/1882-20#Text
Verkhovna Rada of Ukraine. (2021b). On financial services and financial ompanies (Law of Ukraine dated December 14, 2021 No. 1953-IX) [in Ukrainian]. [Верховна Рада України. (2021b). Про фінансові послуги та фінансові компанії (Закон України від 14.12.2021 р. № 1953-IX)]. https://zakon.rada.gov.ua/laws/show/1953-20#Text
Weber, B., Staub-Bisang, M., & Alfen, H. W. (2016). Infrastructure as an asset class: Investment strategy, sustainability, project finance and PPP. Wiley & Sons, Incorporated, John.
Zatonatska, T., & Osypenko, S. (2025). Determinants of mezzanine financing for critical infrastructure during post-war recovery. Fìnance of Ukraine, 5, 43–70 [in Ukrainian]. [Затонацька, Т., & Осипенко., С. (2025). Детермінанти мезонінного фінансування об'єктів критичної інфраструктури у період повоєнного відновлення. Фінанси України, 5, 43–70]. https://doi.org/10.33763/finukr2025.05.043
Zatonatska, T., Soboliev, O., Zatonatskiy, D., Dluhopolska, T., Rutkowski, M., & Rak, N. (2024). A comprehensive analysis of the best practices in applying environmental, social, and governance criteria within the energy sector. Energies, 17(12), 2950. https://doi.org/10.3390/en17122950
Zatonatskiy, D., & Chernyak, Y. (2023). ESG investment in critical infrastructure during the post-war recovery period of Ukraine. RFI Scientific Papers, 2(103), 66–83 [in Ukrainian]. [Затонацький, Д., & Черняк, Є. (2023). ESG-інвестування у критичну інфраструктуру в період повоєнного відновлення України. Наукові праці НДФІ, 2(103), 66–83]. https://doi.org/10.33763/npndfi2023.02.066
Downloads
Published
Issue
Section
License
Copyright (c) 2026 Сергій ОСИПЕНКО, асп., Томаш ВОЛОВЕЦЬ, д-р екон. наук, проф.
This work is licensed under a Creative Commons Attribution 4.0 International License.
Please read more here: https://econom.bulletin.knu.ua/copyright
