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MVV and EBRD fight energy wastage in central and eastern Europe
As part of its ongoing efforts to reduce energy wastage in its countries of operations, the European Bank for Reconstruction and Development (EBRD) is providing financing of up to ECU 26 million in the form of debt and equity. The funding is provided under a multi-project facility (MPF) signed with the German municipal utility, MVV Energie Aktiengesellschaft (MVV), to finance the setting up of energy service companies (ESCOs) in central and eastern Europe. The first ESCO to benefit from EBRD financing under the MPF is MVV ESCO Polska S.A., located in Poland, which is receiving a loan of ECU 5 million and an equity investment of ECU 2.3 million.
"The EBRD has pioneered the development of ESCOs in central and eastern Europe and has a proven track record in this field. MVV Polska will be the Bank’s ninth ESCO in the region and several others are to be signed in the coming months", said Bernard Jamet, Director of the EBRD’s Energy Efficiency team. "The overall ESCO market in the region is very large, with an estimated size of US$ 25 billion. I am happy to welcome a new partner with all the necessary skills to successfully develop the energy efficiency business. This should attract further private sector involvement in the market and address the urgent need for energy efficiency throughout the EBRD’s countries of operations."
"This MPF agreement is a milestone in the development of MVV Energie AG’s international business", said Roland Hartung, CEO of MVV Energie AG. "Our investment activities in Poland and other countries are an important component in our portfolio of new products. We are pleased that the EBRD will not only contribute financing in the form of loans, but that it will, together with MVV also take on the entrepreneurial risk in the Polish MVV ESCO S.A. This is an especially important element that will serve to strengthen the trust of our Polish partners. With the EBRD as a shareholder, we will jointly be able to do business more successfully in the Polish market as well as in those of other countries."
The EBRD’s MPF will assist MVV in establishing, acquiring and operating companies to provide energy-saving services to both public and private sector clients. These include education and health authorities, municipalities, district heating companies and local enterprises in central and eastern Europe.
Under the project, the ESCOs, will install appropriate technology at their own expense, in clients’ premises to reduce energy consumption, while at the same time providing a guaranteed level of service in terms of heating or other energy-related needs. Energy savings are used by the customer to pay back the initial investment.
With a consolidated turnover of over ECU 550 million, MVV Energie AG is one of the ten largest German municipal utilities. It is planning to conduct an initial public offering in spring 1999.
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