Ievgen Tishchenko

The relevance of the article is due to the need of using non-traditional tools for capital raising and hedging financial risks in Ukrainian conditions that allow investors to protect themselves against possible losses during the entire life cycle of the investment project. The study is based on the National Bank of Ukraine statistical data, data of Ukrainian commercial banks, as well as on the authors’ calculations based on empirical and economic-statistical methods. According to international practices, hybrid financial instruments were classified and the special aspects of their use in Ukraine were studied to manage the risks of project financing. Specific features of using the structured bonds for financing investment projects are determined based on the synthetic securitization scheme. The experience of Ukrainian banks was analyzed and the necessity to use financial instruments such as guarantees and letters of credit in risk management of project financing was substantiated. It has been established that forward contracts, currency swaps and over-the-counter currency options are the most acceptable instruments for hedging foreign exchange risks of project financing. Further studies of the problem should include the need for legislative regulation of using hybrid financial instruments, as well as methodological and regulatory support for the risk management of project financing at all stages of the investment project implementation.

Lending to long-term investment projects in fragile countries requires additional financial instruments to control the sustainability of project cash flows and to increase the borrower’s financial discipline in debt servicing. This paper analyzes the special aspects of using financial covenants as credit risk mitigation instruments in project financing in Ukraine. It also argues that regulatory requirements to maintain financial strength indicators at the appropriate level have an indirect impact on the change in project finance loan rates. The study primarily aims at developing approaches to defining a credit rate corridor for an investment project, depending on changes in the values of financial sustainability indicators. The implementation of the proposed approach allows increasing the validity of credit risk components for investors and optimizing capital value for borrowers.
As required by international practice, violation of covenant terms is the trigger for satisfying the creditors’ claims. According to the authors’ conclusions, the use of financial covenants as a tool for protecting the creditors’ interests should not be an instrument of unreasonable financial pressure on borrowers. The study reveals benefits and drawbacks of using financial covenants to mitigate credit risk and reduce the probability of a borrower default in the field of project financing in Ukraine.

Providing people with access to sustainable energy and overcoming energy poverty are essential tasks of the energy transition to a climate-neutral economy. The paper aims to examine the financial measures to alleviate energy poverty in Ukraine, such as the provision of energy subsidies and the financing of local programs to improve the energy efficiency of buildings through the Energy Efficiency Fund. Using statistical data of the International Energy Agency, Eurostat, the Ministry of Energy of Ukraine, and the State Statistics Service of Ukraine, the paper analyzes the state of energy poverty in Ukraine compared to EU countries. In the context of Ukraine’s intensifying energy and economic crises, the assessment of the fiscal cost of energy subsidies reflects a significant increase in an additional burden on the state budget. The fiscal cost of subsidies was assessed using the price-gap approach. The paper presents the results of energy modernization of buildings in Ukraine through the Energy Efficiency Fund. Implementation of energy modernization projects for buildings reduces energy costs and СО2 emissions, increases housing energy efficiency, and expands the possibilities of overcoming energy poverty. The application of the cost-benefit analysis method to sustainable housing renovation projects is demonstrated to more accurately assess energy and carbon impacts and to obtain financial support. The formulated proposals aim to raise awareness of power structures and support informed decision-making to overcome energy poverty and build a sustainable energy future for Ukraine.

Acknowledgment
This article presents the results of a study conducted as part of the scientific project “Formation of the foundations of nationally rooted stability and security of the economic development of Ukraine in the conditions of the hybrid “peace-war” system” (state registration number 0123U100965).