Innovative Financing for EE

Retrofits in Romania

October 18th 2016

Key sectors for EBRD - municipal infrastructure

•  Energy Efficiency

•  Public Lighting

•  Water and Wastewater

•  Urban transport

•  Solid waste

•  District Heating

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EBRD – EE financing facilities in Romania (currently finalized)

EUR 80 mill.

Partner banks

BCR, BRD, BT, CEC, Raiffeisen, OTP

EUR 65 mill.

Partner banks

BCR, BRD, Banca Transilvania, UniCredit

www.eeff.ro www.seff.ro

EUR 10 mill.

Partner bank

BRD

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EBRD experience: credit line programmes for energy efficiency in the residential sector

Bulgaria Slovakia Georgia Kosovo EUR 90 mln EUR 150 mln EUR 20 mln EUR 12 mln www.reecl.org www.slovseff.eu www.energocredit.ge www.kosep.org

(residential and (residential and SME sector) SME sector)

Turkey Moldova Russia Kyrgyzstan USD 350 mln EUR 35 mln USD 100 mln EUR 15 mln

www.moreeff.info www.ruseff-r.ru www.kyrseff.kg (residential) (residential & SME sector)

Residential financing facilities under development in other countries: Croatia, Poland

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Structural design

EBRD

Partner Banks

Sub-borrowers

€ Loans

€ Loans

Support to residential beneficiaries

Technical assistance

Training Marketing Technical assistance

Consultant Verification Consultant

The extend of technical verification reflect specifics of the product and requirements of national authorities

A separate Verification Consultant might not be needed (depends on the scope of investment and on the scope of TA provided by the Consultant)

EBRD- RO Government Memorandum of Understanding

In the Context of the Memorandum of Understanding signed between the Romanian Government and EBRD in 2012, in order to improve the absorption capacity and prepare the strategic projects for EU 2014-2020 programmes, the EBRD support related to EE included 3 projects:

q  National action plans for energy efficiency sector in Romania- SWOT analysis of

results q  Preparation of a strategy regarding the co-financing from structural funds of energy

efficiency investments in public buildings and public lighting, including private sector investments, for the period 2014-2020

q  Preparation of an energy efficiency financing strategy for the residential sector, for

the period 2014-2020.

The following slides summarize some of the proposed schemes for EE in buildings (public and residential)

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PA (adding

own contribution)

MA (national budget and ERDF)

ESCO (adding

own contribution)

Financial Institutions (Banks, IFIs)

Publicfinanceforcommerciallynon-feasibleshareofinvestment

Privatefinanceforcommerciallyfeasibleshareofinvestment&Bridgeloan(op<onal)

Grantapplica<on

Loanapplica<on&Yearlyreimbursementfromsavings

Implementandpre-financeworks,servicesbasedonEnPC

Paymentfrompublicfinanceatturnkey

PaymentfromsavingsyearlybasedonEnPC

1.   Shortterminstitutionalsetup-Publicbuildings

RDAs as IBs

FNGCIMM Guaranteescheme

forESCOsfromstatebudget

Applyforg

uranteeon

beh

alf

ofESCO

Guarantee

Managing Authority EE Fund

FinancinginstrumentsforESCOs

Public authority ESCOs

EEworksandenergyservices,energyaudit

Paymentformgrantandsavings

ERDF+statebudget,grantandequity

IFI

Applica<on

forfi

nancinginstrument&

reimbu

rsem

ent

Cashflowensured

Financial intermediaries (optional)

Capitalorloan

FNGCIMM GuaranteeschemeforESCOs(op<onal)

Applyforg

uranteeon

beh

alf

ofESCO

Guarantee

2.DedicatedFundtakingonMAfunctions–PublicBuildings

Supporting instruments

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•  In the short term, introduction of a Guarantee fund in the form of first loss reserve, up to 20% of the commercial funding of the scheme, to be made available from the EU grants, in order to address the perception risk of the financiers, aiming to open the private sector financing market;

•  In the medium term, introduction of a Forfeiting Fund, to

be made available either by the commercial market or by the EU grants, depending on the needs, in order to address the need for increasing financing capacity of ESCOs in a growing market.

1.ParallelCo-Binancing–ResidentialBuildings

1.RevolvingFund–ResidentialBuildings

•  ESCOs are private companies able to design, implement and operate energy efficiency projects for public clients, paid from their own resources and then recovered from future savings on energy bills. The ESCOs’ own funding can be combined with grant funds.

•  The EBRD programme, financed by GEF, is aimed at supporting cities to prepare and tender EnPCs for ESCOs(target – public buildings)

•  The programme is curently under review, given the many obstacles encountered.

EBRD’ pilot programme – EE public sector (ESCO market development)

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ESCO implements EE measures

End of EnPC contract

1 2 3 4 5 6 7 8 9 10 11 12

Ener

gy b

ill

Years

City energy bill

Energy savings revenue for City

Energy savings revenue for ESCo

Next steps – integrated approach

-  A national facilitator has to streamline the process

-  Tailor made financing schemes / instruments should reflect country and market

specifics

-  The legal and regulatory framework should be developed/upgraded - EU (Eurostat

Note, Aug. 2015) and Romania, for EnPC/ESCO type of investments

-  Awareness and capacity building/technical assistance: public authorities, local

banks, construction companies, technical consultants & engineers, ESCOs

-  Policy dialogue

-  “Start simple” / Pilot / Extend

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Contact Venera Vlad Associate Director Senior Banker, MEI Coordinator vladv@ebrd.com

Dana Ionescu Principal Specialist ionescud@ebrd.com Tel: +40 21 202 7100 Fax: +40 21 202 7110 www.ebrd.com

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