Bulgarian Energy Efficiency for
Competitive Industry Financing Facility
Richard Jones
Official Co-financing Unit, EBRD
Sustainable Energy Seminar
Brussels, 23 March 2011
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€ billion
What is the EBRD?
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International financial institution,
promotes transition to market
economies in 30 countries from
central Europe to central Asia

Owned by 61 countries and two
inter-governmental institutions

Capital base of €30 billion*
*At the Annual Meeting in Zagreb in May 2010,
the Board of Governors approved the Bank’s
capital increase from €20bn to €30bn
authorised capital.
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10
Cumulative commitments of €62.0 billion
Unaudited as at 31 December 2010
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EBRD in 2010
€ billion

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Private sector > 79% of
EBRD finance
Debt 83%, Equity 17% of
EBRD finance
€9.0bn invested in 2010
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45
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1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Debt ABV
Reconciled as at 31 December 2010
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Equity ABV
Net Cumulative Business Volume
Net cumulative business volume

Invested over €62.0bn in
more than 3,119 projects
since 1991
Annual business volume (ABV)
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65
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Sustainable Energy Financing Facilities
(SEFFs)

Credit lines through partner banks for on-lending to investments in
EE in the industrial sector, RE and residential EE

Donor funded technical assistance from specialised consultants to
Sub-borrowers and Participating Banks

Incentive payments paid to Participating Banks and completion fees
paid to Sub-borrowers upon successful implementation of eligible
investments

Successful track record: SEFFs are currently at the implementation
stage in Bulgaria (industry and residential); Ukraine (industry);
Georgia (industry and residential); Romania (industry); Slovakia
(industry and housing associations) Kazakhstan (industry), Western
Balkans (industry and public buildings), and Turkey (IEE, RE, REE,
BEE, EES).
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SEFFs: Main Achievements

SEFFs – One of main instruments for EBRD to achieve its Sustainable Energy
Initiative (SEI) Phase II targets (EBRD investment of EUR 3 to 5 billion during
2009-2011 in SE sectors)

Since the first framework in Bulgaria in 2004, SEFF operations have now grown
to 14 approved frameworks totalling EUR 1.3 billion supported by EUR 178
million donor funding

Under these approved frameworks, 49 SEFF credit lines have been extended
to 35 participating banks in 12 countries in the total facility amount of EUR
724 million (o/w EUR 344 million already disbursed)

Aprox. 29 thousand sub-loans totalling EUR 281 million have been disbursed
under SEFF credit lines, generating total expected energy savings of 3.9
TWh/year and CO2 emission reduction of 1.7 million tons/year

6 new SEFF frameworks currently under preparation. 2010 EBRD new
commitments under SEFF expected to reach over EUR 350 million, almost
tripled from preceding years
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Bulgarian Energy Efficiency for Competitive
Industry Financing Facility (BEECIFF)



A financing vehicle created by the Bulgarian Ministry of Economy,
Energy and Tourism and the EBRD (MoU signed on 02/03/2011) to
promote energy efficiency investments among Bulgarian enterprises
Combines EBRD’s credit lines and grant financing from Structural
Funds (OP Competitiveness)
Builds on the EBRD’s successful work with EE credit lines in
Bulgaria where grant resources from Kozloduy International
Decommissioning Support Fund were leveraged and combined with
the EBRD commercial credit lines
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BEECIFF: Strategic Importance

This is a pilot project that brings together a number of innovative
elements:
– The Ministry will leverage substantially the SFs with private sector
funding (both commercial lending and SMEs own funds)
– The financial creditworthiness assessment is ‘delegated’ to the local
financial institutions
– The technical appraisal of the project will be entrusted to local
energy auditors (registry of auditors) and cross-checked by Project
Assistant who will be part of the Evaluation Committee in the
Ministry

This exercise should lead to the establishment of a sustainable model
of operation between SME sector, energy auditors and local banks. If
this is successful, this scheme may become a highly replicable model
for other OPs and also in other member states.
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BEECIFF: Objectives

To boost competitiveness of SMEs through investments in energy
efficiency and to strengthen the transition of Bulgaria towards a
green economy

To help leverage the absorption of Structural Funds allocated to
Bulgaria under OP Competitiveness

To strengthen capacities of local stakeholders involved in the
implementation of OP Competitiveness

To raise awareness on energy efficiency and energy efficiency
financing opportunities among Bulgarian enterprises
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BEECIFF: Main Challenges

Complex legal and administrative setting: necessity to comply
with Structural Funds regulations, Bulgarian law, and internal
policies and guidelines of the EBRD

A lengthy process of SFs grants approval and disbursement in
Bulgaria: the Ministry took steps to simplify the grant payment
cycle

Necessity to put in place a parallel financing scheme (a loan
facility managed by the EBRD and a grant financing scheme
managed by the Ministry) since the management of the SFs
resources could not be delegated to the EBRD
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BEECIFF: the Role of the EBRD



To transfer the Bank’s expertise acquired during the
implementation of Sustainable Energy Efficiency Financing
Facilities
To secure financing and implementation of Programme
Preparation Technical Assistance
To provide parallel co-financing (“the Facility”) and ensure
participation of local financial institutions
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BEECIFF: Components of the Programme

Loan Component: credit lines provided by the EBRD through
Participating Banks (PBs) for on-lending to eligible SMEs

Grant Scheme Component: resources provided from OP
Competitiveness and managed by the Ministry of Economy,
Energy and Tourism

Technical Assistance Component:
– Preparation support TA: financed and managed by the
EBRD (in consultation with the Ministry)
– Implementation support TA: provided and managed by the
Ministry
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BEECIFF: two implementation approaches

A technology-driven approach for small-scale energy
efficiency projects: to be eligible for financing, projects must
consist of the acquisition and installation of equipment specified
in a list of eligible materials and equipment

An energy audit approach for larger and more complex energy
efficiency projects: to be eligible for financing, each project will
be analysed and screened against a set of requirements related
to the ownership, type of activities, technical parameters, energy
savings, environmental impact and financial viability
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BEECIFF: Structure of the Programme
Technical Assistance Programme
Preparation Consultant
Programme Steering Committee
EBRD
MoU
Ministry of Economy, Energy and
Tourism
(Managing Authority of the OP Competitiveness)
Grant disbursement upon
completion and verification
Credit lines to Participating Banks for
on-lending to SMEs (“the Facility”)
Participating
Banks
Energy
Auditors
TA
Project
Assistant
SMEs – the final beneficiaries
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TA
Verification
Assistant
BEECIFF: Loan Component (“the Facility”)

The EBRD will establish a finance facility under which the Bank
will extend credit lines (up to a total amount of EUR 150 million)
to local Participating Banks (PBs)

Under the loan component of the Programme, PBs will on-lend
EBRD financing to eligible SMEs

PBs may participate in the verification of compliance with the
requirements of the procurement procedures for the selection of
the suppliers of services and equipment by the participating
SMEs

The loan repayment period will be negotiated between PBs and
individual clients
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BEECIFF: Grant Scheme Component

The grant scheme component will be financed with OP
Competitiveness resources

Eligible projects will receive the grant financing subject to: (i) a
project screening and verification of successful implementation to
be carried out by consultants, (ii) obtaining financing from PBs
under the loan component

Grant intensity in the total financing provided for the implementation
of each project will be in the range of 30-50% of the eligible costs
(progressive grant intensity will incentivise more comprehensive
energy efficiency solutions)
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BEECIFF: Preparatory Technical
Assistance
Preparation support technical assistance package will be
financed and managed by the EBRD in consultation with the Ministry.
The consultant will:
• Provide advice on the design and structure of the Programme
(including technical aspects)
• Assist with the implementation of a marketing strategy and raising
awareness in the market regarding the Programme
• Ensure transfer of skills and capacity building to all stakeholders
participating in the Programme
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BEECIFF: Implementation Technical
Assistance
Implementation support technical assistance package will be
financed from the Structural Funds resources and will be managed by
the Ministry. Among other tasks, the implementation consultants will:
• Verify technical eligibility of proposed projects and present their
recommendations to the Evaluation Committee
• Identify an appropriate implementation approach (technologydriven or energy audit)
• Ensure continuous training of energy auditors
• Monitor projects’ implementation
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BEECIFF: the Project Cicle
Project
Assistant
SME
(application
form)
(Technical
Eligibility
Confirmation
Document)
Participating
Bank
Contracting
Authority
Participating
Bank
(grant
agreement)
(loan
agreement)
(Financial
Eligibility
Confirmation
Document)
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Implementation phase
Energy
Auditors
Verification
Assistant
(Completion
Verification
Certificate)
Contracting
Authority
(Grant
Disbursement)
BEECIFF: Next steps and draft timeline
• Programme preparatory support consultant to be selected in
April
• Procedures and technical documentation of the Programme
to be finalised by autumn. At the same time, the Ministry will
proceed with the selection of the implementation consultant
• Possible start of the Programme by the end of 2011
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Thank you for your attention!
Richard Jones
Director
Official Co-financing Unit
European Bank for Reconstruction and Development
+44 207 338 7266
jonesr@ebrd.com
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