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East European energy wastage to be tackled by EBRD and Landis & Gyr partnership
To tackle the enormous wastage of energy in central and eastern Europe and the Commonwealth of Independent States, the European Bank for Reconstruction and Development (EBRD) is financing an ECU 70 million multi-project facility with the Swiss company Landis & Gyr (Europe) Corp to develop a network of energy service companies (ESCOs) for the region. Landis & Gyr is one of the world's largest energy management and control companies and the market leader in Europe.
"With no means of controlling energy consumption on the demand side in central and eastern Europe, the energy sector is put under considerable pressure and up to 30 per cent of energy generated is lost. This puts needless strain on national budgets and causes immeasurable damage to the environment," explained Jacques de Larosière, President of the EBRD. "The EBRD, in partnership with an experienced company like Landis & Gyr, can help build a greater awareness of the need for energy savings with the advantage of establishing a private sector industry to support it".
According to Bernard Jamet, Director of the EBRD's Energy Efficiency Team responsible for ESCO development, "Energy service companies are the most effective way to promote energy-saving opportunities in the region, both in the public and private sectors."
The multi-project facility is the second of its kind signed by the EBRD in this sector. Osama Rifai, head of financial services for Landis & Gyr (Europe) Corp, explained that "the facility will support Landis & Gyr's programme of providing energy-saving services to clients, such as hospitals, educational establishments and district heating companies, which have limited access to funds for this purpose".
The ESCOs will install, at their own expense, appropriate technology in their clients' premises to reduce energy consumption, while at the same time providing a guaranteed level of comfort or service in terms of heating, lighting or other energy-related needs. The ESCO recovers its costs from the realised energy savings which it is able to guarantee to the client. Because few of the clients have access to capital, this form of contracted services, known as Energy Performance Contracting, is particularly suitable.
Initially ESCOs will be established in Poland, the Slovak Republic, the Czech Republic and Hungary, with the EBRD providing 35 per cent of finance requirements for each ESCO in the form of debt and equity. Landis & Gyr will provide the balance and will be the majority shareholder in each ESCO. Total financing under the investment programme will be approximately ECU 200 million over a four-year period.
Landis & Gyr (Europe) Corp is wholly owned by Electrowatt, a major Swiss building control and power company. The building control division operates under the brand names of Landis & Staefa and Cerberus, and the energy management business of the power division is carried out under the name of Landis & Gyr.
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