The EBRD is considering replenishing the Western Balkans Sustainable Energy Direct Financing Facility (“WeBSEDFF” or the “Facility”), originally approved on 11 November 2008, by adding EUR 50 million in new funding, thus bringing the total commitment to EUR 100 million. The facility will continue providing debt financing for renewable energy and energy efficiency to local enterprises in Albania, Bosnia and Herzegovina, Croatia, FYR Macedonia, Montenegro and Serbia.
The replenishment of WeBSEDFF will be supported by TC funds of up to EUR 4.03 million for pipeline and project preparation, due diligence and institutional capacity building.
Grant funds of up to EUR 5 million will be sought for incentive payments. These will be provided to eligible borrowers upon successful completion of their projects and will aim to overcome various remaining barriers to sustainable energy investments in the Western Balkans.
The size of the individual loans provided under the Facility will continue to be in the range of EUR 1 million to EUR 6 million.
The transition impact of the Facility will continue to be derived from the following factors:
- Demonstration of new replicable behaviour and activities: the Facility will continue demonstrating the impact of efficient energy utilisation on improving industrial productivity and competitiveness in the energy intensive and inefficient economies of the Western Balkans. It will continue to provide examples on how to overcome barriers and market failures that prevent energy efficiency and renewable projects from becoming commercially viable;
- Transfer of skills: the Facility is expected to continue building and transferring expertise related to energy efficiency and renewable energy sources to local companies. They will acquire knowledge in assessing the need for energy efficiency measures as well as in financing the corresponding investments in such projects; and
- Institutions, laws and policies that promote efficiency: through the extension of its Institutional Capacity Building component, the Facility will continue providing support to the local authorities on adoption of new legislation in the area of energy efficiency and renewable energy sources, as well as in building the necessary institutional capacity. This will further support the creation of a proper framework for the development of sustainable energy projects in the Region.
Local private enterprises legally incorporated in Albania, Bosnia & Herzegovina, Croatia, FYR Macedonia, Montenegro and Serbia.
EUR 100 million, in the form of loans to local companies for developing renewable energy and energy efficiency projects.Local private enterprises legally incorporated in Albania, Bosnia & Herzegovina, Croatia, FYR Macedonia, Montenegro and Serbia.
EUR 121.5 million (estimated).
Experience to date has demonstrated that overall the Facility is very positive from an environmental and social perspective. Projects financed through the Facility have typically been of limited negative environmental and social impact due to the size and nature of the projects. Environmental and social due diligence has been conducted on each and every project, by the Project Consultant, following a standard format which measures project performance against the Bank's Performance Standards. Where necessary, the Bank has requested additional information, which again has been provided in a timely and constructive fashion. Environmental and Social Action Plans have been developed by the Project Consultant and agreed with project sponsors.
Projects under the Facility will continue to be appraised on a case-by-case basis. All projects will undergo a basic environment, health and safety review prior to project approval. For companies with higher environmental risk, additional studies will be carried out as necessary. This will allow the Bank to fully understand all environment-related liabilities and environmental risks associated with the project or company’s operations and to develop and agree upon the environmental and social actions necessary. Borrowers will be required to comply with the Bank's Performance Requirements and provide the Bank with an annual report on environmental, health and safety issues.
The implementation of the Facility to date has been supported the following TC assignments:
1) Project Consultant – for identifying and appraising projects, doing technical due diligence and monitoring on the project implementation. EUR 1.85 million of TC funding has been committed to this assignment to date. Another EUR 1.70 million will be used to support the replenishment of the Facility;
2) Verification Consultant – for verifying the successful completion of the project implementation and certifying the eligibility for incentive payments. EUR 150,000 of TC funding has been committed to this assignment to date. Another EUR 150,00 thousand will be used to support the replenishment of the Facility;
3) Legal Advisor – for providing legal services related to due diligence, drafting and execution of legal agreements. EUR 500,000 of TC funding has been committed to this assignment to date. Another EUR 680,000 thousand will be used to support the replenishment of the Facility;
4) WeBSEDFF: Institutional Capacity Building – for providing assistance to countries in the Western Balkans in improving their legislation and regulatory framework in the area of renewable energy and energy efficiency, as well as in building the necessary administrative capacity. EUR 3.0 million of TC funding have been committed to this assignment to date.
Donor funding has been provided by the EBRD Shareholders Special Fund, the Western Balkans Fund and Norway. Further funding will be solicited from donors.
Donald Mishaxhi, email@example.com
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