Energy efficiency and climate change: the challenge
Energy efficiency is a key issue in Bank's countries of operation, all of which use more energy than the average EU country. Companies and institutions face increasing and unsustainable energy costs as energy prices increase towards international levels.
High energy intensity is damaging to the environment through high levels of greenhouse gas emissions, contributes to social hardship and weakens the competitive advantage of private companies.
After the United States and China, transition economies are among the highest greenhouse gases emitters in the world, with 13 per cent of the global total. The most energy-intensive economies are located in the EBRD’s countries of operations including Azerbaijan, Kazakhstan, Ukraine and Uzbekistan, whose energy intensity five times that of Western Europe.
What is the role of the EBRD Energy efficiency team?
The EBRD is the only IFI with a specialised Energy efficiency team. Its mandate is to develop specialised energy efficiency investment mechanisms such as ESCOs and energy efficiency credit lines, identify and implement industrial energy efficiency opportunities with other Bank clients, develop opportunities to sell carbon credits from EBRD funded projects and promote and develop renewable energy projects, in collaboration with the Power and energy team.
How does the EBRD reach these goals?
The key strategies of the Bank's Energy Policy are summarised below. Read the full policy here.
- Promoting energy efficiency with a formal energy efficiency and renewable energy target to lend or invest at least €1 billion in energy efficiency and renewable energy projects between 2006-2010.
- Launching a Sustainable Energy Initiative (SEI) to invest up to €1.5 billion in investments in greenhouse gas emission-reduction projects in both the demand and supply sides of, as well as outside of, the energy sector
- Advancing the unfinished reform agenda, fostering transformation of the region’s energy sectors into efficient energy markets. The EBRD will continue to promote the reform agenda of commercialisation, unbundling, regulatory reform and private sector participation
- Promoting renewable energy technologies: Although renewable energy sources are not yet always cost-effective they are growing in strategic importance as countries try to reduce energy dependence and increase their security of supply. In the long-term a switch to carbon-free technologies is also needed to address the threat of climate change. The EBRD will step up its support for renewable energy.
- Promoting carbon trading: Transition countries have the potential to become some of the largest suppliers of carbon credits in the emerging market for greenhouse gas emission reductions under the Kyoto Protocol. The EBRD will promote the creation of carbon markets in the region through investments, carbon funds and institutional and technical assistance.
- Unlocking the region’s energy potential: Exploiting the vast energy reserves of the transition region is important to meet the growing international demand for energy and in achieving economic development in resource-rich countries. The EBRD will support transition countries in exploiting their energy resources.
- Supporting sound natural resource management: Natural resource projects need to be well managed to avoid the ‘resource curse’ that has befallen many other resource-rich countries. The EBRD will finance projects designed to yield a lasting benefit for the local population and adhere to best international standards.
- Promoting energy trade and competition: Competition in the production, transportation and distribution of energy – and between different fuels – can increase efficiency and reduce the market power of individual suppliers. The EBRD will promote regional cooperation, competition and energy trade in the electric power, gas and oil markets.
- Increasing nuclear safety: Transition countries are unique among emerging markets in having sizeable nuclear generation capacities. However, for transition countries the main challenge in the nuclear sector remains safety. The EBRD will continue to manage nuclear safety grant funds as requested by the donors.
- Promoting environmentally sustainable development: EBRD will require that projects are structured so as to meet its Environmental Policy.
Technical co-operation support
Technical co-operation programmes provide important resources to enable the EBRD to promote and develop energy efficiency investments. The EBRD is pleased to acknowledge the support of the following donors:
- The Central European Initiative which is funding energy audits and energy management training in the CEI countries (Albania, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Hungary, Macedonia, Moldova, Poland, Romania, Serbia and Montenegro, Slovak Republic, Slovenia, Ukraine)
- The Government of Greece which is funding energy audits and energy management training in the Bank’s countries of operation
- The Dutch Government which has funded energy audits arranged by the Bank in Russia the development of a pipeline of Clean Development Mechanism projects for the Caucasus and Central Asia
- The Kozloduy International Decommissioning Support Fund (“KIDSF”) which provides support in the context of the closure of the Kozloduy nuclear power plant in Bulgaria. The KIDSF funds Technical Co-operation assistance for preparation of rational energy utilisation investments and incentives to companies for implementation of such projects.
Further information
