|
EBRD and Dexia sponsor an innovative equity fund for energy efficiency and emissions reductions investments
The European Bank for Reconstruction and Development and the Dexia Group through its subsidiary Dexia Project and Public Finance International Bank have joined forces in a groundbreaking private equity fund, which aims to reduce energy consumption and greenhouse gas emissions in central and Eastern Europe.
The Dexia-FondElec Energy Efficiency and Emission Reduction Fund aims at raising EUR 150 million and will invest in projects across a range of sectors, including district heating, public lighting and industry. At initial closing, the EBRD and Dexia have each committed
EUR 20 million. Total commitments amount to EUR 61 million. The EBRD has the option of committing a further EUR 10 million once the Fund reaches its target total.
"The Bank’s countries of operations offer opportunities to make a wide variety of energy efficiency investments. As the energy intensities of the countries in central and Eastern Europe are two to five times that of the OECD countries, relatively small investments can yield attractive returns," said Charles Frank, First Vice President of the EBRD. Through the Fund, the Bank will invest in projects with short payback periods and pre-defined exit strategies alongside western companies active in the industry."
"It is appropriate for the Dexia Group, which is a strong supporter of sustainable development, to contribute to this fund," said Philippe Rochefort, Director of Structured Finance at Dexia Project and Public Finance International Bank. "The Fund will boost the modernisation of the energy sector in central and Eastern Europe, and particularly those areas that involve local needs such as heating and public lighting."
The Fund also offers investors the opportunity to earn emission – or "carbon" – credits as part of the investment and trading mechanisms included in the Kyoto Protocol to encourage a reduction of global greenhouse gas emissions. Currently, 25 per cent of the world’s greenhouse gases are generated in central and Eastern Europe and the Commonwealth of Independent States (CIS).
Serving as fund manager is FondElec Group Inc., a private equity fund management firm founded in 1992 to capitalise on the growth of emerging market utility and service businesses. The Fund is a 10-year limited partnership and has already attracted several primary investors, including Marubeni Corporation, Kansai Electric Power Co. and Mitsui & Co. Europe Limited.
The Fund will build on the EBRD’s work in the field of energy efficiency. The EBRD has strongly supported the development of energy service companies (ESCOs) and currently has 12 ESCOs under operation throughout the region.
The EBRD was established in 1991 following the collapse of communism, to aid the transition from centrally planned to market economies in central and Eastern Europe and the CIS. The EBRD is owned by 60 shareholders: 58 countries, the European Investment Bank and the European Community, and operates with EUR 20 billion in authorised capital.
Dexia Project and Public Finance International Bank is the international subsidiary of Dexia Group, the leading European banking group for the financing of public service facilities and financial services for local governments. With a market share of about 15 per cent in Europe, Dexia operates through subsidiaries and equity interests in most of the European Union countries and in North America and Asia. With total assets of EUR 232 billion (as at 30 June 1999), the Dexia Group ranks among the 25 leading European banks.
|
