€15m loan for on-lending to private borrowers
The European Bank for Reconstruction (EBRD) is stepping up its support for sustainable energy investments in the Slovak Republic with a €15m facility to Všeobecná úverová banka, a.s. (VUB), one of the country’s leading banks.
The funds will be on-lent to private companies for renewable energy projects and energy efficiency investments in industry and construction.
The loan to VUB is extended under the third phase of the EBRD’s highly successful Sustainable Energy Finance Facility in the Slovak Republic (SlovSEFF III). The loan is an extension of an existing €5 million facility signed with VUB on 16 December 2014, increasing the bank’s total exposure under SlovSEFF III to €20 million.
This new facility is complemented by funding provided by the Slovak Republic and Spain. These funds are sourced from the proceeds of a carbon credit transaction between the two countries and provide incentives for sustainable energy investments. In addition, donor funding of €2 million for technical assistance has been provided by Spain.
Betsy Nelson, EBRD Vice President and Chief Risk Officer, said during the signing in Bratislava today: “I would like to thank the Slovak Republic and Spain for their generous contribution and for giving us the opportunity to continue our efforts in promoting sustainable energy and build on the experience gained since the first launch of the SlovSEFF programme in 2007.”
Sylvia Gansser-Potts, EBRD Managing Director for central and south-eastern Europe, added: “For the first time in the Slovak Republic, we have been able to utilise a market-based instrument to generate grant financing, which makes SlovSEFF III a highly innovative funding instrument. In addition, I would like to point out the important role that our partner banks play in delivering the programme and helping the EBRD in fulfilling its mandate in the Slovak Republic.”
Despite significant improvements in energy and greenhouse gas (GHG) intensity over the last decade, there remains enormous potential to improve energy efficiency and further reduce carbon emissions in the Slovak Republic. SlovSEFF III links the incentive payment amount to a project’s emission reduction potential, thereby prioritising the best performing projects. Sustainable energy projects financed under SlovSEFF III are expected to achieve annual GHG emission savings of 40,000 tonnes of CO2 equivalent.
Launched in 2007, SlovSEFF is a credit line aimed at promoting sustainable energy investments in the Slovak Republic’s private sector through local banks. To date, SlovSEFF has supported more than 700 small sustainable energy investments worth over €200 million, resulting in combined annual energy savings equivalent to the total household electricity consumption of a city the size of Bratislava. The two previous SlovSEFF phases are expected to reduce the amount of CO2 emissions by 115,000 tonnes each year. With this new loan to VUB the third phase of the programme has now been fully committed.
Since the beginning of its operations in the Slovak Republic the EBRD has invested over €2 billion in more than 125 projects in the country, mobilising over €4.5 billion of financing from other sources.