EBRD launches Kosovo Sustainable Energy Projects Framework

By Axel  Reiserer

Improving the generation, use and supply of energy is a key challenge for Kosovo. In order to support the country’s efforts in this field the EBRD is launching the Kosovo Sustainable Energy Projects Framework (KoSEP), furnished with €12 million of EBRD finance and €3 million grant support from the EU Office in Kosovo, as well as additional technical assistance funds provided by the government of Norway.

The framework has been designed to encourage small and medium-sized enterprises and private households to invest in energy efficiency technology and the rational use of energy. Studies indicate significant potential for renewable sources of energy, and for achieving savings through basic measures such as better insulation. Raising energy efficiency will lessen Kosovo’s dependency on imports and contribute to a stable and affordable energy supply.

Under the framework the EBRD is providing loans to participating financial institutions for on-lending to local borrowers. Participating banks and microfinance institutions are benefiting from the extension of their range of services and the transfer of know-how and expertise in evaluating and funding cost-effective investments in energy efficient technologies and renewable energy production.

To date, KoSEP has already committed €8 million to three partner banks: TEB – the fourth-largest bank in Kosovo – signed a €5 million loan agreement in May 2013; while Agjencioni për Financim në Kosovë, and Kreditimi Rural i Kosoves LLC – the third- and fourth-largest non-bank microfinance institutions in Kosovo by total assets, respectively – received €1.5 million in July. A fourth bank has expressed interest in joining, which would lead to the full subscription of the framework

Henry E. Russell, EBRD Director Financial Institutions, Western Balkans, Belarus, Moldova and Ukraine, said: “The KoSEP framework marks our strategic priority to support the sustainable development of Kosovo’s energy sector. The framework will demonstrate the benefits of rational utilisation of energy and associated savings in energy costs, in times of increasing electricity prices. Lower energy costs will strengthen the competitiveness of enterprises and reduce the burden on households.”

Anton Kobakov, Head of the EBRD’s Resident Office in Kosovo, added: “We are very pleased and encouraged by the strong response the framework has received in the market. This has exceeded our highest expectations and shows the need and the readiness to engage in energy efficiency and sustainable energy projects in Kosovo.”

Kosovo became a member of the Bank on 17 December 2012, and on 1 May 2013 the EBRD adopted its first full country strategy for Kosovo. Private sector projects in Kosovo have been eligible for EBRD support since 1999, via dedicated externally managed regional funds and projects, and via regional facilities. Within this scope, the Bank signed 29 projects in Kosovo since 1999, with a total EBRD investment value of over €70 million.