EBRD opportunities –
Energy Efficiency
Investments
1
Outline
EBRD Sustainable Energy Initiative
Energy Efficiency Financing Facility
Energy Efficiency in Public Buildings
1. Industrial
Energy
Efficiency
4. Renewable
Energy Scale-up
2. Sustainable
Energy Financing
Facilities
5. Municipal
Infrastructure
Energy
Efficiency
3. Power Sector
Energy
Efficiency
6. Carbon
Markets
Development
Sustainable Energy Initiative
SEI Results 2006- 2010:
– EBRD SEI investments of € 6.1 billion for total project value of over €32 billion
– Investments in 353 projects and 29 countries
– EBRD SEI financing account on average for 20% of the Bank’s total investment, (24% in 2010)
– Annual emission reduction of 37.2 million tons of CO2
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.
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Barriers to sustainable energy
financing
– Uncertainties about market demand for EE financing; lack of reliable data
– Low awareness and lack of information about the sustainable energy and energy saving concepts;
– Skeptical attitude on the clients’ side about the technical risks and financial benefits of energy efficiency
– High perceived risk of the ESCO investment, lack of expertise and experience on the financial market;
– 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; lack of technical expertise for appraisal and risk assessment
4
Institutional and regulatory barriers
Insufficiencies of housing legislation:
– Legal statute of associations of apartment owners;
– Responsibilities and legal liabilities of Associations;
– Management of Associations
– Decision making procedures
– Relationship with management companies and utilities
Insufficiencies of building regulatory
– Lack of energy performance classification
– Lack of energy certification scheme
– Structure and complexity of energy efficiency requirements
– Lack of institutionalised energy assessment procedures
– Insufficient institutional framework supporting energy performance assessment
5
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)
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:
– Secondary legislation on EE of buildings: Russia
– Law on Energy efficiency of buildings (Moldova, Kyrgyzstan)
– Regulations, technical regulations, ministerial decree/ordinances (Ukraine, Moldova, Kyrgyzstan);
– Sustainable Energy Action Plans (Kazakhstan, Moldova, Russia, Ukraine, Turkey)
High leverage of national (Donor funded) support programs.
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.
Policy dialogue in Building
Policy dialogue maintained on energy efficiency legal & regulatory framework in Kyrgyzstan, Moldova, Russia and Ukraine:
Primary and secondary legislation transposing EU Building Directive in Moldova and Kyrgyzstan (SSF funded):
Minimum EE requirements;
Methodology for energy performance assessment (new&existing buildings)
Energy performance certification
Regular inspections of heating and air-conditioning installations
Independent energy assessors
Amendment of housing codes in Moldova and Russia (SIDA and GEF funded)
Engagement on secondary legislation in Russia and development of energy efficiency financing mechanisms (GEF-funded)
Assistance on up-grade of EE and housing legislation in Ukraine, awareness raising& capacity building.
EE in Public Buidlings - Next Steps
Agree conclusions of the market study
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 (eg FREE)
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
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
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
The steps to an EPC
Analysis of existing technical documentation
Field inspection of the building and related facilities
Technical and energy chart analysis
Annual energy consumption
Rehabilitation and modernization solutions
Economic efficiency analysis of solutions to increase EPC
Conclusions on building assessment
Energy Audit Report
Lightning
Hot water Heating
Ventilation/ air conditioning
EPC development
46 investments with a combined value of 34 million Euro are under-way or complete...
12 Autumn 2010
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
Applying for a bank loan, free technical consultancy and an EU grant is easy with the EEFF
Contact EBRD’s Project Consultant - the EEFF Team at Tractebel Engineering...
EEFF Help Line - 031 224 8104, [email protected]
EEFF website – www.eeff.ro
... or contact any Participating Bank
2011 14
If your local branch is not familiar with the EEFF, please contact Tractebel
Engineering who will give you the names of EEFF contact points for all the
participating banks. Also, if you click the logo of a participating bank on the home
page of www.eeff.ro, it will lead you to that bank's EEFF product page.
Contacts for EEFF
Energy Efficiency in Public Buidlings
EPC Programme Outline
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 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
EPC and the Romanian legal framework
Cold/Heat generation
Cold/Heat distribution
Hot water generation
Ventilation system
Climatisation
Lighting
Energy saving potential: 20-40% = costs public budget does not have
to bear
Energy potential in public buildings
Facilities /sites
ESCO
Co-ordination
Supply
Technical issues
remuneration
saving guarantee
remuneration
natural gas district heat electricity oil
Utilities
Gas, electricity and/or fuel supply
companies
Public
Authority/
Building owner
Energy Performance Contracting (EPC) – simpliest form
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
Neutral process management:
• Trustworthiness, both technical and economic know-how
• Potential mediator in conflict situation
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Thank you!