Project summary document

Project description
and objectives:

Extension of existing framework facility under which the EBRD would extend credit lines to Participating Banks (PB) for on-lending to private sector companies for industrial energy efficiency and small renewable energy projects.

Additional EBRD funds of up to € 55 million would be complemented by the Kozloduy International Decomissioning and Support Fund (KIDSF) grant funding (the Grant). There is a Grant of €20m provided by the KIDSF which provides support for both the initial framework and this extension and is provided to overcome barriers faced by sub-borrowers in developing/financing and implementing such investments. The Grant will be used to provide:

(i) completion fee to sub-borrowers

(ii) administration and completion fees to be paid to PBs, for participation in this Project, on behalf of the sub-borrowers. The Grant will also provide technical assistance and is provided on the basis that individual sub-loans meet the objectives of the KIDSF.

Discussions are currently taking place with potential participating banks.

Sub-projects:

• EERECL (Bulgaria) extension - Raiffesenbank Bulgaria
• EERECL (Bulgaria) extension Piraeus Bank

Transition impact:

The project will help to overcome market imperfections that hold back the smooth functioning of the energy conservation market in Bulgaria. It will have positive demonstration effects particularly with respect to utilising financial intermediaries for investments resulting in rational energy utilisation. The Project would result in:

i) demonstration of the benefits of rational energy usage

ii) building expertise (among the PBs and sub-borrowers, including SMEs)

iii) increased financial intermediation targeted at rational energy utilisation which will also improve operating efficiency.

The client:

The clients will be Bulgarian PBs which will on-lend the funds to sub-borrowers planning to undertake energy efficiency investments and small renewable energy projects in the private sector.

EBRD finance:

Senior loans of up to an aggregate of EUR 55 million to be allocated to PBs in Bulgaria.

Total project cost:

EUR 55 million from EBRD.

Environmental impact:

FI screened operation. PBs will require that companies financed through this credit line comply with national requirements for environment, health and safety. This will be confirmed to the PBs by the consultant who will cover this issue as part of the preparation of each project (see Technical co-operation section below for more information). Reporting on sub-projects and annual monitoring reports will be provided by PBs.

Increased efficiency in heat generation, reduction of heat transmission losses and improved efficiency in the use of heat and energy will lead to a reduction of air pollutants (e.g., SO2; NOx; CO2; particulates) resulting from heat and electricity generation. This is a clear and quantifiable environmental benefit on which the PBs will provide details in an annual environmental report to the Bank.

Technical
cooperation:

KIDSF will provide funding for technical cooperation essential for the Project. This will include the following components:

1. Rational Energy Utilisation Plan (REUP) and Marketing Consultant
Potential sub-borrowers will have access to project preparation assistance which will

(a) assess, present and recommend the proposed investments

(b) ensure cost effectiveness in the identification of appropriate measures and consistency with the criteria of the KIDSF Grant

(c) assist the formulation of loan applications to PBs, and

d) make recommendations to the sub-borrowers on its energy management strategy
The PBs will also benefit from having a recommendation on the technical component and, over the course of the assignment, developing its own expertise in appraisal of rational energy utilisation sub-projects. In addition, information dissemination activities related to the facility will be carried out all over the country aimed at informing a wide range of potential sub-borrowers about the facility and the benefits of rational energy utilisation.

2. independent energy expert
The expert will validate the successful completion of each sub-project and ensure that it is consistent with the REUP.and hence the eligibility for the facility.

For consultant opportunities for projects financed by technical cooperation funds, visit procurement of consultants.

Company contact:

Terry McCallion, Senior Banker, Financial Institutions Team
EBRD, One Exchange Square, London EC2A 2JN
Tel. +44 (0)20 7338 7478
Fax: +44 (0)20 7338 7380

E-mail: MccalliT@EBRD.com

EBRD contact:

Galina Shterionova, Operation Leader: shteriog@ebrd.com

Business opportunities:

For business opportunities or procurement, contact the client company.

General enquiries:

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com