EBRD, EU and Austria help businesses and homeowners save energy and money
Armenia is heavily reliant on energy resources from abroad: 75 per cent of the country’s primary energy is imported. It’s therefore all the more important to save energy wherever possible, to avoid being at the mercy of fluctuating energy prices.
The residential sector is still one of the main contributors to harmful greenhouse gas emissions. However, this is starting to change. The EBRD works with its partners to provide credit lines to this segment so that homeowners can save energy and money.
Less energy, lower bills
Suren Janoyan is one of them. He lives with his family in Gyumri, a large town in the mountainous west of Armenia. When he moved into his new house a year and a half ago, he saw an opportunity to make his home more comfortable than the previous one.
“I invested in a new solar water heating system because it’s both good for the environment and cheaper,” Mr Janoyan said. “It was a great decision. We always had trouble to get the right water temperature with our boiler in our previous home, but that’s now a problem of the past.”
He took out a loan with microfinance institution SEF International, which is active in 18 cities, town and villages in Armenia. The new heating system has helped him to save almost €300 on his utility bills per year – a real difference and long-term benefit for the whole family.
He is one of about 9,500 homeowners who have benefitted from the credit lines of EBRD partner financial institutions in Armenia. However, the offer is not only available to residential homeowners, but also to commercial businesses.
Growth opportunities for energy-intense industries
Agricultural greenhouses require a lot of energy to keep the temperature warm inside their glass structures. Vegetable producer LLC Alternative Energy is well aware of this. The company is located in the village Dzoraghbyr, not far from the capital Yerevan, and produces about 4,500 tons of tomatoes and cucumbers in greenhouses each year.
Energy consumption accounted for a significant amount of costs for the business. This, combined with volatile energy prices, made the company look into opportunities for savings.
The Energocredit team analysed and advised the vegetable producer on the best available technologies.
Energocredit combines US$125 million in EBRD credit lines with €5.1 million in EU funding, €5 million from Austria and €3.15 million from the EBRD Shareholder Special Fund in the three countries of the southern Caucasus: Armenia, Azerbaijan and Georgia.
The company took out a loan of US$ 2.3 million to finance various measures to use energy as efficiently as possible: new energy-saving screens, boilers and an automatic control system. This investment has helped the vegetable producer save more than US$ 400,000 per year.
“The investment has exceeded our expectations and helped us to achieve up to 50 per cent of energy savings,” said Armen Sargsyan, Director, Alternative Energy LLC. “This has helped us achieve long-lasting change for the years to come and makes us more competitive in the agriculture market.”
A long-lasting impact
The idea of taking out a loan to finance sustainable energy equipment or measures is still new to many Armenians. That’s why the EBRD works together with the European Union, Austria and other donors to build a market for such investments – in Armenia as well as in over 25 other countries.
The funding from the EU and Austria supports several activities: for example, expert advice for potential clients on the best available energy saving technologies, verification visits to ensure equipment has been correctly installed or training for loan officers to learn more about structuring such deals.
“The EBRD is committed to building a sustainable, competitive economy – here in Armenia as much as elsewhere,” said Mark Davis, Head of the EBRD’s Yerevan office. “The work that we do with our partners to help businesses and households identify and finance the right energy efficiency measures is a vital part in this process.”
“Energy efficiency is at the core of EU energy security policy and we believe that we can also help Armenia to be more energy independent as part of the EU family. The EU is increasing its support to Armenia in the energy sector through many other projects,” added Ambassador of the EU Delegation to Armenia Piotr Świtalsk.