Saving energy is a relatively new concept to many in Georgia: the country is still 50 per cent more energy-intense than its trading partners. This is a stumbling block for businesses facing stiff international competition, especially at a time when energy prices can be highly unpredictable.
This is where the EBRD’s Caucasus Energy Efficiency Programme comes in: providing credit lines totalling US$ 125 million, which local partner banks use to help companies and private households finance sustainable energy investments.
Iceberg Poti is one of the beneficiaries. The company is strategically located right next to the port of Poti – a busy hub for imports and exports connecting Georgia to the rest of Europe and markets further afield.
The EBRD is expanding its successful CEEP to new horizons – with the support of the EU and Austria.
The small business provides refrigerated storage to commercial clients and keeps frozen fish, meats and fruit in its facilities before they reach their final destination. A significant part of Iceberg Poti’s expenses goes into electricity bills, meaning that there was great potential for cutting costs, explained Irakli Tsekvashvili, Iceberg Poti’s director.
“We designed the project with energy efficiency in mind. This will enable us to decrease the amount of electricity we use and make our products more competitive,” he said. “Since we deal with food products, environmental issues are very important. We have purchased equipment that is cleaner and more environmentally sound.”
The results have been impressive. Iceberg Poti now saves more than US$ 100,000 in electricity costs every year.
However, it is not just businesses that can benefit from the EBRD’s programme. Private homeowners can also apply for loans with one of the partner banks.
Ketevan Barabadze moved house together with her husband a year ago. The young couple bought their new flat in an old Soviet-style apartment block with the help of Ketevan’s parents.
The property needed a complete overhaul. It proved a real challenge, but also a unique opportunity to ensure that the couple would cut their costs on energy, Ketevan recalled.
“We took out a loan to buy energy efficient systems and appliances – we installed central heating and bought a new refrigerator and gas stove,” she said. “This means that we can save 700-800 lari (around €350) per year, which can be put towards repaying our loan.”
This has made their home more comfortable. “It’s warmer and, most importantly, it’s more economical,” her husband Levan Kakauridze points out. “With the money we’re saving, we can afford to go out more often and we can buy things we couldn’t afford before.”
Thousands of clients have benefitted from the programme through the EBRD’s partner banks.
The programme is supported by the EU's Neighbourhood Investment Facility (NIF) which offers incentive payments to those investing into energy efficiency. The Austrian Ministry of Finance is funding consultants who advice potential borrowers on the best solution to reduce their energy consumption.
Furthermore, the Austrian funds support local banks in creating sustainable lending products in the field of energy efficiency.
“Our credit line for energy efficiency has proven extremely popular,” said Vasil Khodeli, Head of Corporate Banking, Bank of Georgia, one of the EBRD’s partner banks. “It’s an attractive proposition for our customers. Many of them are able to repay the loan in only few years, thanks to their energy savings.
“In addition, the fact that our customers acquainted themselves with the product and gained positive experience will allow us to offer such financial products in the future.”
These activities have started to make a real difference in terms of environmental impact: they have helped reduce CO2 emissions by more than 10,000 tonnes per year –equivalent to the annual energy consumption of more than 15,000 Georgians.
The popularity of the Caucasus Energy Efficiency Programme means that it is now expanding to new horizons. Azerbaijan is the next port of call and the EBRD officially launched its programme in the country in November 2014.
The country’s boom in oil and gas will not last forever, so now is the time to prepare for the future and to help boost the potential for energy savings.