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First EBRD energy efficiency project in Bulgaria for households
Working with local banks, individuals will cut energy costs
The EBRD is lending €20.1 million to three Bulgarian banks – United Bulgaria
Bank, Postbank and RZB Bulgaria – to help finance private individuals’ efforts
to promote energy efficiency and renewable-energy projects. These loans are
being provided under a framework that has been developed in conjunction with
the Kozloduy International Decommissioning Support Fund and the Ministry of
Energy and Energy Resources trough the Energy Efficiency Agency of Bulgaria.
Funds from this framework will also be made available to other participating
banks.
United Bulgaria Bank, receiving 10 million Bulgarian lev (BGN), or €5.1
million, Postbank, receiving €5 million, and RZB Bulgaria, receiving €10
million, will use the proceeds for on-lending to help households cut energy
consumption and costs, which is in line with the Bulgarian policy of reducing
the energy intensity of its GDP. Individuals will use loans for such
improvements as double glazing, interior and exterior insulation (including
roofs and floors), biomass stoves and boilers, solar water heaters, efficient
gas boilers and heat pumps. At the same time, UBB is also receiving a €10
million extension (in BGN) to an existing loan, made under the EU/EBRD SME
Finance Facility, that helps support small and medium-sized enterprises
wishing to set up or expand their existing business. Both loans to UBB are
being extended in Bulgarian lev, marking the first such deal in the country
for the EBRD.
The framework for the energy-efficiency and renewable-energy loans is called
the Residential Energy Efficiency Credit Line, or REECL, with funding extended
to Bulgarian financial institutions and then on-lent to individuals. As an
incentive, borrowers will benefit from a grant of up to 20 per cent of the
loan upon completion of the works. The percentage will depend on the type of
project, and one family may receive a maximum €850. These grant funds are
provided by the Kozloduy International Decommissioning Support Fund, set up in
2000 with donor funds from the European Community, a number of EU member
countries, as well as Switzerland, and managed by EBRD.
Terry McCallion, Senior Banker at the EBRD, said that these loans are part of
the first energy-efficiency facility for residential customers provided by the
EBRD and the associated donors; it complements an existing facility, made
available to Bulgarian banks last year, that targets energy efficiency and
renewable energy in the corporate sector.
The EBRD is the largest foreign investor in Bulgaria, having committed more
than €1 billion in 53 projects across all sectors of the economy.
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