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EBRD fosters energy efficiency through ESCOs in Hungary
As energy prices in eastern Europe rise in line with international levels so does the interest in energy conservation. To help Hungary's leading energy service company (ESCO), Prometheus RT, meet growing demand for its services the European Bank for Reconstruction and Development (EBRD) is providing a US$ 16.9 million (ECU 16.1 million) financing package.
Bernard Jamet, Director of the EBRD's Energy Efficiency team, said: "The key issue for all our countries of operations is to reduce substantially their energy consumption on the demand-side. As the majority of our clients do not have the funds to install energy-saving equipment, the ESCOs invest in the equipment necessary to generate the savings and are repaid through contractual arrangements, known as Energy Performance Contracts. These convert the savings made by the client's reduced energy costs into a flow of revenue. By financing such ESCOs as Prometheus, the EBRD can foster investment in small and medium-sized energy efficiency projects."
Demand for Prometheus' services has grown by 250 per cent in the last two years. The proceeds of the EBRD's package, a loan of US$ 10 million and a US$ 6.9 million equity investment (20 per cent), will be used for renovations of existing conservation systems and the operation and maintenance of energy installations in private sector businesses or public sector enterprises operating in Hungary.
Marc Boudier of Compagnie Générale de Chauffe (CGC), Prometheus' principal shareholder, commented: "Prometheus has been quickly picking up market share in both public and private sectors, providing energy conservation services to prisons, hospitals, railway stations, schools and other public buildings. In addition, Prometheus is now tapping into the district heating sector, which offers fantastic growth opportunities. For the 200 contracts signed since 1993, the average savings in fuel consumption is 20 per cent."
The EBRD's first loan to Prometheus, US$ 5 million (ECU 3.8 million) in 1995, has been fully disbursed. The new package is granted under a multi-project facility that the EBRD has with CGC.
Until 1992, Prometheus was a Hungarian state-owned company with a leading position in operating and maintenance services of heating systems, hot water, etc. In 1992, CGC acquired more than 75 per cent of Prometheus's stock and restructured the company, producing substantial results. CGC is the largest manager of energy systems in Europe and is active world-wide as the leading subsidiary of Compagnie Générale des Eaux in the fields of thermal energy activities and related environmental services.
Similar ESCO projects under this multi-project facility and others that the EBRD has signed with sponsors are expected in the forthcoming months in several central European countries.
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