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Saving energy in cities

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Mayors discuss energy-saving measures.

Mikhail Slobodin urges for long-term loans.

With energy efficiency now at the core of EBRD operations, the Bank’s Annual Meeting brought together mayors from Belgrade in Serbia to Surgut in Russia to discuss ways in which municipalities can cut energy costs and improve related services. Countless opportunities exist to do so, particularly in modernising district heating and public transport, the Mayors agreed. But what are the hurdles to achieving these aims? 

“Financing is the single most important issue in pushing for energy savings projects,” said the Mayor of Belgrade, Bojan Stanoyevich. “The municipality of Belgrade relied mainly on loans from international financial institutions to modernise its district heating system. Once services were improved, then tariffs increased. With a stronger budget, the municipality can now plan for more energy efficiency projects.”

Long-term loans work better

Mayors agreed with Mikhail Slobodin of Integrated Energy Systems, Russia’s largest private sector district heating provider, who argued that the energy sector requires long-term loans for modernisation that will yield energy savings. “EBRD is one of the few lenders providing long-term loans,” said Mr Slobodin. “Long-term loans are the best incentive for municipalities to develop energy efficiency projects. Thus municipalities experiencing financial constraints don’t have to throw the burden of paying short-term loans on to the customers,” he added. 

“It’s a burden for municipalities, particularly in small cities, to invest in energy saving projects. Most importantly, municipalities experience financial constraints based on restrictions to adjust tariffs,” said Alexander Sidorov, Mayor of the Siberian city of Surgut.

In a pioneer programme, the EBRD has provided Surgut municipality with a 700 million rouble (€20 million) loan to finance four new residential buildings, and to knock down two old concrete panel buildings. The new buildings will be safer, warmer, and 30 per cent more energy efficient. And there is more to this project than the energy efficiency aspect. Of the 800 new apartments, up to 25 per cent will be reserved for lower-income families.

The need to improve buildings was echoed around the podium. “We also want to do more by cutting down energy lost in heating public buildings,” commented Ilsur Metshin, Mayor of the city of Kazan in Russia’s Republic of Tatarstan where the EBRD’s 2007 Annual Meeting was held in mid-May.

Modernise transport to save energy

Private operators and mayors also debated ways of modernising urban transport to achieve energy savings. The Deputy Mayor of Zagreb, Croatia, explained how the city had improved the bus and train system and was now moving to upgrade the underground system. David Alavidze, Deputy Mayor of Tbilisi, Georgia, has high hopes for using public private partnerships to modernise his city’s transportation system. He said the city’s transport system and energy efficiency had improved thanks to an EBRD loan for the bus system, making the system more attractive for private sector operation.

“Promotion of public transport is a must in any city, if energy is to be saved,” said Pierre Cordier, Deputy Director of Veolia Transport.  He and others also pointed to the environmental benefits of improved energy efficiency through well-conceived municipal investments.

By Marjola Xhunga
Photos: Yevgeny Kondakov
Contact: Municipal and environmental infrastructure team

21 May 2007