EBRD Support for Renewable
Energy and Energy Efficiency
projects
Ian Brown
Power & Energy Utilities Team
Pristina, 14 May 2013
Overview of the EBRD
• AAA/Aaa stable rated
multilateral development
bank owned by 63
countries and the EU and
EIB
• Invested over €79 billion
in more than 3,644 projects
since 1991
• Active in 35 countries.
2
Primary objectives in the energy sector
• Support sector reforms that enable
energy sectors to function according
to market principles (e.g. increased
competition, market liberalization and
private ownership)
• Strengthen frameworks for
regionalisation (trans-border
transmission lines, energy trading)
• Prioritise environmental, energy
efficiency and renewable energy
investments
3
EBRD Power Sector Financing
Financing by Sector
(2009-2012)
Natural Gas
Distribution
2%
Electric
Power
Distribution
13%
Renewabl
e Power
27%
Electric
Power
Transmission
9%
• Cumulative EBRD financing to
power & energy projects since 1992
is €8.1 bn across 170 projects with
€28.4 bn total value
• In 2012 invested over €1.0 bn in 23
projects with a total value of €3.2 bn
Electric
Power
Generation
49%
Unaudited as at 31 December 2012
Note: Renewable power does not include large hydro.
Source: EBRD data
• In the last five years, number of
projects per year has tripled and
annual business volume has
quadrupled
• Renewables represent an
increasing portion of total financing,
comprised primarily of wind and
hydro but also including biomass
and solar
4
Case study: EPCG Montenegro
• EBRD made a loan of EUR 35 million in 2010 to EPCG in
Montenegro to install 175,000 smart meters
• Objectives were to improve energy efficiency, reduce distribution
losses and improve collections
• Already 80,000 meters have been installed with very interesting
results
‒ Distribution losses in areas where all the meters have been changed are
coming down to the level of technical losses
‒ Half the loss reduction comes when 80% of meters are changed, the other
half from the remaining 20% in an area
‒ Bill collection rates are substantially higher for customers with smart meters
‒ Old debts are being collected
• EBRD have now approved an additional EUR 30 million to
complete the smart meter changeover for all consumers in
Montenegro
Power sector investments
• Long lived – from 20 years (wind turbine) to more than 60 years
(hydropower); long pay-back times
• Large scale – investments range from EUR 10 million to more than
EUR one billion
• Natural monopolies – networks obviously but often generation
also, especially in small markets
• High political profile – essential utility, viewed as a public service
• Central to resource efficiency and climate change agendas
Regulatory environment is critical
Key regulatory issues
• Overall: a regulatory framework must be clear, predictable,
stable and enforced
• Tariff methodology that focuses on transparency and
efficiency – social issues dealt with separately. Affordability
is a key concern.
• How to deploy renewables without being overwhelmed or
paying too much?
Western Balkans Sustainable Energy
Direct Financing Facility
• A direct financing facility operated by the EBRD
• For (small) renewable energy and energy efficiency projects
• EUR 100 million of loan funds + up to EUR 21.5 million in
Technical Cooperation (TC) and incentive payment funds
• Senior (secured) loans from EUR 2 million to EUR 6 million
EBRD financing
• Average (expected) maturity of 6-8 years for energy efficiency
and 12 years for renewable energy projects, with appropriate
grace periods and flexible repayment schedules
Energy efficiency credit lines project with EU
• EU supported EUR 12 million framework for energy
efficiency investments in SMEs and households (with EUR
3 million in EU grant funds) for small energy efficiency
projects for SMEs and households
• EBRD recently signed the first credit line with TEB, others to
follow
• Initial EUR 5 million is being provided to TEB – this is a
pilot project
• EU is providing grant funds that provide up to 20% of the
loan principal to the final borrower as an incentive payment
Key Messages
• KEDS privatisation is an important step forward
but this is step on the road towards having a
financially sound distribution sector, and not an end
in itself
• EBRD strongly supports investments in renewable
energy and energy efficiency in Kosovo, but as
part of a balanced generation mix which uses
Kosovo’s available resources, including new higher
efficiency lignite fired generation
• The importance of having a stable, predictable and
independent regulatory climate cannot be
overstated.
Thank you
Nandita Parshad
Director, Power and Energy
+44 (0)207 338 6537
parshadn@ebrd.com
Ian Brown
Senior Adviser, Power and Energy
+381 63 233 954
browni@ebrd.com
11