EBRD launches second sustainable energy credit line in Slovakia

By Mike McDonough

Building on a previous initiative's success, the EBRD has launched a second sustainable energy credit line in Slovakia. The new credit line will enable more efficient residential energy use.

Just two years after its launch, an EBRD credit line aimed at promoting sustainable energy investments in Slovakia has been fully disbursed. The €60-million scheme proved so successful that the EBRD is providing a second package with even more funds available for energy efficiency and small renewable projects.

Like its predecessor, the new credit line – worth up to €90-million – is being offered under the Slovakia Sustainable Energy Finance Facility (Slovseff). Loans will go to housing associations for improvements to residential apartment blocks and to industrial companies who want to reduce their energy consumption or produce energy from renewable sources.

Borrowers will benefit from free technical assistance in identifying energy-saving potential and in implementing the measures. The technical assistance package is financed by a €15-million grant from the Bohunice International Decommissioning Support Fund, which was established to help Slovakia decommission the Bohunice nuclear power plant and is managed by the EBRD’s Nuclear Safety department. The grant will also be used to reimburse up to 15% of a borrower’s loan, on successful completion of the energy-saving investment.

Carbon reduction

“The first credit line was very successful and financed more than 280 projects, mostly in the residential sector,” says joint operation leader Stefania Racolta from the EBRD’s Energy Efficiency team. “These are expected to lead to total energy savings of 235,000 MWh per year and cut annual CO2 emissions by some 56,000 tons.”

Ms Racolta adds: “Because the first phase went so well, last June the donors of the Bohunice fund decided, at our request, to support a second phase. This time we have more money and we hope that we will work with more banks.”

Examples of residential energy efficiency measures funded by the Slovseff credit lines include thermal insulation of walls, double glazing, the installation of solar panels on roofs and improvements to heating and air conditioning systems.

In industry, energy efficiency investments made under Slovseff include the installation of small cogeneration units, thermal insulation of production halls and machinery upgrading or replacement. Small renewable investments are focused on mini-hydro and biomass power generation.

Raising awareness

“When the first credit line was launched, people were not sure of the benefits of energy savings,” says Michalis Kiourktsoglou, the operation leader from the EBRD’s Financial Institutions team.

“Once they realised the potential for energy savings, housing associations and businesses were willing to borrow and invest, despite the difficult financial conditions caused by the global downturn.”

The local partner banks involved in distributing the first credit line were Slovenska Sporitelna (part of the Erste Bank Group); VUB Banka (Intesa Sanpaolo Group); Tatra Banka (Raiffeisen International) and Dexia Banka Slovensko. In addition to the four existing banks, the EBRD is planning to lend to new partner institutions as part of Slovseff’s second phase.