A sustainable legal framework

The EBRD's sustained policy dialogue supports energy-efficient investments in the Kyrgyz Republic.

The building sector accounts for nearly 50 per cent of the total energy consumed by the Kyrgyz Republic. This consumption is hugely inefficient and research shows that the average dwelling consumes around 3-4 times more energy that the EU equivalent in similar climatic conditions.

Given these statistics, it is vital that an effective regulatory framework is put in place to ensure standards and incentivise investment.

Legal transition

The EBRD’s engagement with the Kyrgyz Republic on these themes began in 2008 and the Bank has been working closely with the State Agency for Construction and Architecture (GOSSTROY) ever since.

Through a number of concentrated technical cooperation (TC) projects over the past five years, the Bank has helped GOSSTROY facilitate a whole new environment in which energy improvements can better be assessed, funded and brought under improved legislation in the country.

Indeed by January 2012, the team was able to oversee the passing of legislation that included a dedicated law on the energy efficiency of buildings and further decrees on inspections and accreditations.

They are now engaged in building capacities among the relevant implementing institutions, helping GOSSTROY to harmonise these new regulations with existing industry standards.

Funded by the EBRD – Slovak Republic Technical Cooperation Fund, the results of these TCs are already reaping benefits across the country.

Local currency funding

For the first time, the EBRD has been able to set up a local-currency facility to fund sustainable energy improvements on the ground. The Kyrgyz Republic Sustainable Energy Financing Facility (KyrSEFF) is a US$ 20 million EBRD credit line used to finance energy-saving refurbishments in private and commercial building stock.

The money is distributed through local partner banks, directly fostering the institutions and mechanisms through which finance can continue to flow in the future. Thanks to funding from the EU Investment Facility for Central Asia (IFCA), projects under the facility are also supported by a consortium of experienced consultants, ensuring not only that funds are spent in the best possible way, but that expertise is shared with local contractors and strong examples are provided to local industry and participating financing institutions.

The innovation and structures the EBRD has helped bring to the industry in its wider efforts to establish this model are ground-breaking. This work represents the very first time a former Soviet country has established a full set of legal frameworks to address energy-efficiency concerns in its building stock, complying fully with international best practice.