EBRD and KIDSF support energy efficiency investments in Bulgaria’s public sector

By Axel  Reiserer

The EBRD is launching a programme – supported by the Ministry of Economy and Energy and the Kozloduy International Decommissioning Support Fund (KIDSF) – to increase energy efficiency investments in public buildings and services in Bulgaria.

Buildings account for up to 40 per cent of Bulgaria’s energy consumption, and public facilities such as schools, universities, or town halls are a large segment of the total building stock in the country. Street lighting also accounts for a significant percentage of energy consumption and has potential for greater energy efficiency. Due to underinvestment these assets are energy inefficient and do not meet modern equipment standards. They therefore represent an attractive investment opportunity with high potential returns based on reductions in energy consumption.

However, public authorities often lack the engineering expertise and financing capacity to realise such investment opportunities. By contrast, private sector construction and engineering companies, utilities and equipment suppliers usually have the relevant know-how , but often lack access to potential clients.

To address this imbalance and to support investments in energy efficiency, dedicated Energy Service Companies (ESCOs) or Energy Performance Contractors (EnPCs) have been established. The EU and the EBRD support this approach and the ESCO market is now well developed in Western Europe with a volume of around €3 billion in 2012.

The EBRD is helping the development of the ESCO market in Bulgaria with the launch of a new programme for public sector energy efficiency. The programme will introduce easy-to-understand and efficient procurement procedures enabling public buildings such as schools and kindergartens to benefit from ESCO investments. It will also support municipal authorities as they develop and implement tenders for ESCO/EnPC suppliers.

The programme was launched during an international meeting led by the Ministry for Economy and Energy and the EBRD in Sofia today. Local banks and engineering companies strongly welcomed the initiative. The first projects in this programme will be launched in 2014.

The objectives of the three-year public sector programme are:

  • to design, structure and implement up to 10 ESCO/EnPC pilot programmes in four municipalities, with the underlying projects implemented as demonstration ventures so that other Bulgarian cities can replicate their success;
  • to provide support and training to at least 20 municipalities and key stakeholders in ESCO/EnPC tender preparation and implementation, contracting, monitoring, project execution and implementation; and
  • to support further regulatory reform allowing more flexible use of ESCO/EnPC contracts in Bulgaria.