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More grant funds for EBRD-sponsored energy efficiency projects in Bulgaria
Investment incentives doubled for industrial energy efficiency projects
The European Bank for Reconstruction and Development (EBRD) and the Bulgarian
government are supporting plans to increase investments in sustainable energy
projects in Bulgaria, in an effort to reduce the energy intensity of the
economy.
Donors supporting a fund for the decommissioning of Bulgaria’s Kozloduy
nuclear power station have increased their financing by €1.2 million to €25.2
million. The funds are used partly to provide financial incentives to
companies investing in EBRD-sponsored energy efficiency projects in Bulgaria.
These incentives, which help remove barriers to sustainable energy efficiency
projects, have now been doubled.
Bulgaria - a country typical of many central and eastern European and former
Soviet economies where endemic energy wastage remains a legacy of the
communist past - consumes 2.5 times as much energy per capita compared with
the average in the 25 countries that comprised the EU before the accession of
Bulgaria and Romania in 2007.
With the aim of reducing the energy intensity of the economy and making
businesses more competitive on the EU market by reducing energy costs, the
EBRD, in close co-operation with the Bulgarian Ministry of Economy and Energy
launched the EBRD Bulgarian Energy Efficiency and Renewable Energy Credit Line
(BEERECL) in 2004. The €105 million facility is provided by the EBRD to six
local participating banks that on-lend to private sector companies for
industrial energy efficiency and small renewable energy projects. These banks
are United Bulgarian Bank, MKB Unionbank, Unicredit Bulbank, DSK Bank,
Raiffeisenbank and Bulgarian Postbank.
The facility is complemented by the €25.2 million grant funds available from
the Kozloduy International Decommissioning Support Fund (KIDSF)*, which are
used for technical assistance and for incentives to companies implementing
energy efficiency and renewable energy projects financed under the BEERECL.
The extra grant funding approved will be used for doubling the incentives for
energy efficiency projects from 7.5% currently to 15% of the loan amount to
incentivize more businesses to undertake the necessary investments that will
help them save costs and become more competitive on the common European
market. The incentive for renewable energy projects will remain at 20% of the
funds borrowed.
Jacquelin Ligot, EBRD Director for Energy Efficiency and Climate Change, said
there is a tremendous potential for improvement in energy efficiency in
Bulgaria, where energy consumption is much higher compared to other EU
countries. By cutting energy wastage, businesses are reducing costs and
contributing to improved competitiveness. This new funding provides the
incentives to do just that, Mr Ligot added.
Galina Tosheva, Deputy Minister of Economy and Energy, said that Bulgaria is
proud to be the pioneer of such type of investment mechanism, which has shown
that investing in energy efficiency and renewable energy projects this way can
become best practice. Ms. Tosheva added that the achieved results have shown a
great potential for implementation of such projects in Bulgaria.
Tasko Ermenkov, Executive Director of the Energy Efficiency Agency, explained
that the BEERECL will help to significantly reduce emissions contributing to
environmental protection and will lead to more efficient usage of energy in
the industry.
Businesses use the BEERECL facility to improve energy efficiency with projects
for co-generation, process optimisation, fuel switching, automation and
control and heat and steam recovery and to promote the use of renewable energy
technologies.
These projects lead to reductions in CO2 emissions and energy savings as high
as 96 percent, as already witnessed by several Bulgarian recipients of EBRD
credits to improve energy efficiency.
With EBRD and KIDSF support, the Eliaz-Dobrevi & Co bakery in Sofia slashed 85
per cent of its energy costs and added €90,000 to the bottom line annually by
switching to natural gas to power the production line instead of using
electricity. The Orphey Hotel in Bansko also reduced 75 of its energy costs by
using underground water as a source of energy.
As of 30 June 2007, the participating Bulgarian banks had disbursed €19
million in 34 loans to co-finance energy efficiency investments worth €32
million and €36 million in 51 loans to co-finance renewable energy investments
worth €52 million.
The completion of this portfolio of projects is estimated to lead to
significant energy savings – 788,252 MWh per year, enough to cover the
electricity consumption of about 250,000 households and CO2 emissions
reduction of 398,112 tonnes a year.
* Donors of the Kozloduy International Decommissioning and Support Fund
(KIDSF) are the European Community, Austria, Belgium, Denmark, France, Greece,
Ireland, the Netherlands, Spain, Switzerland and the United Kingdom.
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