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EBRD housing development projects and energy efficiency

Since its establishment in 1991, the European Bank for Reconstruction and Development (EBRD) has become the largest financial investor in its region of operations, which stretches from central Europe and the Western Balkans to central Asia (www.ebrd.com). The EBRD helps the countries in the region to become open, market economies. In response to recent political developments in the Middle East and North Africa, the EBRD is currently in the process of extending its geographic remit to include countries in the southern and eastern Mediterranean region. The EBRD is owned by 63 countries, the European Union and the European Investment Bank. The EBRD provides project financing for banks, industries and businesses, both new ventures and investments in existing companies as well as working with publicly owned companies.

EBRD Shopping mall project.

With its sustainability mandate, the Bank has taken up climate change mitigation measures as a critical area. A number of the world’s most energy-intensive economies are located in the EBRD region. Within this context, the built environment is estimated to account for around 39 per cent of final energy consumption in the region, mostly through heat, and is thus the largest single opportunity for energy efficiency. Further, the housing sector of the region suffered long-term under-investment during the socialist regime and initial transition stage and lacks quality housing stocks. The Bank addresses these critical issues by using various financial schemes while improving housing stocks with new development and the existing stocks’ energy efficiency.

The most recent example is the Bank’s EcoDolie project. The housing development project will deliver one of the first large-scale mass market residential developments in Russia involving a number of regional cities such as Orenburg and Obninsk. While providing large-scale new residential zones, the project will demonstrate the use of energy efficiency technologies which exceed national energy efficiency standards and comply with best international practice, including super-insulation, ground source heat pumps, LED lighting and efficient heating systems.

Another example is the Residential Energy Efficiency Credit Line (REECL). The framework was initially launched on the Bulgarian market in 2005 and extended in 2011. Under the facility the Bank provides credit lines to local banks for on-lending to residential energy efficiency subprojects. Households and homeowner associations apply for loans to repair their homes and improve their energy efficiency by investments such as energy-saving windows, thermal insulation, refurbishment of heating systems and deployment of solar collectors, biomass boilers and efficient gas boilers. This is the first scheme to systematically address energy wastage on a household level, using the retail lending market to finance efficiency improvements and structuring the supply side with strict criteria for energy efficiency equipment.

In Ukraine the Bank has launched a technical assistance programme aimed at promotion of residential energy efficiency in a country that has one of the largest housing stocks in Europe (over 10 million buildings). Ukraine’s residential buildings could potentially absorb energy efficiency investments worth around €60 billion. Once implemented, such investments may result in energy savings of over 60,000,000 MWh per year – an equivalent of almost 10 billion cubic meters of imported natural gas or 25 per cent of all Ukraine’s natural gas imports. The programme is designed to assist the Ukrainian Ministry of Housing and Communal Services. It will examine issues related to legal and regulatory framework, general awareness, capacity and low penetration of energy efficient technologies in the country.

While addressing the liquidity shortage under the global financial crisis, the EBRD’s involvement in the housing sector and energy efficiency investment with innovative financial schemes is expected to grow steadily.

By Nobuko Ichikawa
Principal Environmental Advisor, Environment & Sustainable Department
The European Bank for Reconstruction & Development (EBRD)

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