EBRD opportunities –
Energy Efficiency
Investments
Venera Vlad
27 October 2011
Outline

EBRD Sustainable Energy Initiative

Energy Efficiency Financing Facility

Energy Efficiency in Public Buildings
1
Sustainable Energy Initiative
The SEI responds to the specific needs of the energy transition in the EBRD region,
as well as to the EU call for the IFIs to scale-up climate change mitigation investment.
SEI Results 2006- 2010:
– EBRD SEI investments of € 6.1 billion for total project value of over €32 billion
– EBRD SEI financing account on average for 20% of the Bank’s total investment, (24% in 2010)
– Annual emission reduction of 37 million tons of CO2
1. Industrial
Energy
Efficiency
2. Sustainable
Energy Financing
Facilities
3. Power Sector
Energy
Efficiency
4. Renewable
Energy Scale-up
5. Municipal
Infrastructure
Energy
Efficiency
6. Carbon
Markets
Development
Barriers to sustainable energy financing
– Uncertainties about market demand for EE financing; lack of reliable data
– Low awareness about the sustainable energy and energy saving concepts;
– Skeptical attitude on the clients’ side about the technical risks and financial
benefits of energy efficiency
– Legal enforcement in the property and residential sector
– Non-supportive procurement rules
– Public budgeting rules (”pressure to spend”)
– Accounting problems (investment vs. operating costs); lack of ”off-balance
sheet” solutions
– Lack of specific structures for implementation; limited technical expertise for
appraisal and risk assessment
3
EBRD integrated approach

Tailor made financing vehicles reflecting country and market specifics:
– REECL-type (Bulgaria);
– SlovSEFF type (Slovakia case study see next slide for summary)
– EEFF, RoSEFF (Romania) SME Sustainable Energy Financing Facility




Capacity building: local banks, technical consultants & engineers, local
authorities
Awareness raising: general public, project stakeholders, authorities
Corporate sector: technology and service providers, utilities, project
developers;
Policy dialogue: assistance on development/upgrade of supportive
legal and regulatory framework: legislation; regulations, sustainable energy
Action Plans

High leverage of national (Donor funded) support programs.
4
Example:
SLOVAK SUSTAINABLE ENERGY FINANCING FACILITY
EE, RE AND RESIDENTIAL HOUSING ASSOCIATIONS

Drivers: high energy intensity, significant potential for energy savings, closure of Bohunice Nuclear Plant.
EBRD Credit Line: €60 million Framework of loans to local banks (four to date) for on-lending to enterprises and
housing associations to make better use of their energy resources.

Grant Support: Bohunice International Decommissioning and Support Fund (BIDSF) of €15 million financing technical
assistance (€2.5 M), incentives to sub-borrowers (€ 10 M) and participating local banks (€2.5 M).

Results to date

–
Portfolio of projects €56.4 million with a pipeline for the remaining €3.4 million (under preparation)
–
250 residential energy efficiency projects
–
41 industrial energy efficiency and/or renewable energy projects
Estimated Impact
–
1,105,000m2 of floor area refurbished and 46,000 people benefiting from lower energy bills and better thermal
comfort; an estimated 14,316 households have been targeted
–
Estimated energy savings of 32%, twice as much as initially foreseen
–
279,197 MWh/a of primary energy savings and 63,120 tCO2 emission reductions per year;
–
Grant per CO2 12.5 EUR/ton, Investment per CO2 81.1 EUR/ton;
–
Every EUR of Donor Support received has resulted in energy savings of 355kWH;
–
One new job created for every EUR 9,000 of investment*, meaning SLOVSEFF has helped in the creation of
8,535 jobs so far. * According to methodology indicated by the Slovakian Authorities.
The EU EBRD Energy Efficiency Finance Facility (EEFF)
A ‘fast track’ integrated package of
Loans - of up to 2.5 million Euros per from participating banks
EU-financed free Technical Consultancy from Tractebel Engineering (GDF SUEZ)
- Prepared under contract to EBRD
- Includes a Rational Energy Utilization Plan and an Energy Performance Certificate
 15% EU grants - up to 375,000 Euros per company
- Paid by EBRD when the investment is verified to be complete and operational
New EU EBRD Energy Efficiency Finance Facility (RoSEFF)
60 mil. Euro framework
Loans - of up to 1 million Euro
EU-financed free Technical Consultancy
Eligible areas:
• Commercial EE investments
• Stand-alone small scale RE investments
• Buildings sector EE and RE investments
• Investment loans for eligible manufacturers, suppliers of EE and RE technology, equipmen
and materials
EEFF to finance energy efficiency in buildings
Eligible investment categories are:
1. Industry and agriculture: investments that bring >20% energy savings
• Boiler replacement or improvements (automation, economisers, burners, insulation)
• Production line or process improvements (that save energy)
• Steam distribution improvements (steam traps, condensate recovery)
• Automation and control systems, Energy Management Systems
• New machines, new equipment, new motors, new pumps…
2. Any company: investments in buildings that bring >30% energy savings
• Improving energy efficiency in industrial buildings, offices, farm buildings, hotels etc
• Insulation of walls and roofs, new windows, doors, lighting systems, boilers, ....
3. Any company: cogeneration to meet own power and heat needs*
• (Or tri-generation to meet own power, heat and cooling needs)
• So large buildings such as hotels and shopping centres may finance CHP with the
EEFFCo-gen/tri-gen investments are subject to case-by-case approval by EBRD
46 investments with a combined value of
34 million Euro are under-way or complete...
Autumn 2010
10
Four examples of energy efficiency investments
financed using the EEFF...
(Selected as being those most relevant to buildings)
1.Simple building rehabilitation
2.Relocation as an opportunity to become more energy-efficient
3.Self-generation of heat and power
4.Energy efficient lighting
Energy Efficiency in Public Buidlings

Aim to support development of public EPC market in CEE and
CIS, initially: Romania, Bulgaria,Russia and Ukraine

Developing a suitable EPC-model for the Romanian market

Use initial TA to assess market and identify main obstacles

Implement capacity building programme to support cities,
ESCOs and banks

Provide initial financing through ESCO financing, commercial
banks or dedicated funds

Saving energy, reducing public spending and GHG-emmissions
EPC and the Romanian legal framework
EPC is included in the Romanian National Energy Policy
– Government Ordinance (GO) 22/2008 (transposed from
2006/32/EC)

Defines the National Energy Policy

Defines ESCOs and energy services

Defines EPC

Defines financing instruments for EPC-projects
– Government Decision (GD) 163/2004 defines the National
Energy Efficiency Strategy (targets)
– GD 1661/2008 identifies efficiency measures (incl. EPC)
– National Strategy for Energy Efficiency – under revision
Energy Performance Contracting (EPC) – simpliest form
Public
Authority/
Building owner
remuneration
ESCO
saving guarantee
Facilities /sites
remuneration
natural gas district heat
electricity
oil
Utilities
Gas, electricity and/or fuel supply
companies
Co-ordination
Supply
Technical issues
Energy Efficiency Services – Criteria and Conditions for Success



Driving force:
• Decision makers who take on the responsibility
Reliable legal framework:
• Procurement: EPC allowed, tender procedure formally approved
(guideline by ANRMAP)
Standardized procedures and contracts approved by ANRMAP:
• Reliability, transparency, time and cost effectiveness for implementation
• Need to ensure obligations under EPC do not count as municipal debt
• Need to ensure energy savings can be re-allocated to payments under
EPC over life of contract
• Need to ensure ESCOs are free to assign payments under EPC as basis
for financing
EE in Public Buidlings - Next Steps

Prepare basic financing proposal for funding mechanism

Approval for EBRD framework financing
– Direct financing of ESCOs (€5m to €10m)
– Dedicated vehicle for financing EPC contracts

Design full technical assistance programme to help
municipalities develop, launch and implement EPC
programmes

Select and engage consultants for project support teams

Begin operations and working with municipalities 2012
Thank you!
19