EBRD and government of Armenia sign a contribution agreement on Armenia’s participation in E5P

By Loretta  Martikian

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The European Bank for Reconstruction and Development (EBRD) and the Ministry of Energy and Natural Resources (MoENR) of Armenia have signed an agreement on Armenia’s participation in the Eastern Europe Energy Efficiency and Environment Partnership (E5P). Armenia will contribute €1 million to E5P which will enable Armenia to access grant funds of €20 million for priority energy efficiency investments in the municipal sector.
The agreement was signed on Monday 16 March by Armenia’s Energy and Natural Resources Minister, Yervand Zakharyan, EBRD Managing Director, Environment and Sustainability, Alistair Clark, and EBRD Manager of the E5P Fund, Anders Lund.
The E5P is a multi-donor fund providing grants to support energy efficiency projects that aim to improve energy efficiency and the environment in the Eastern Partnership countries. The main objective of the initiative is to use grants to leverage loans dedicated to municipal energy efficiency and environmental projects, for example the rehabilitation of water and wastewater systems, solid waste management, street lighting and the insulation of public buildings.
E5P is part of the strategic response to energy issues, allowing municipal authorities to invest in projects that make the most of opportunities for energy savings. As a partnership, E5P also includes a strong commitment to policy dialogue, allowing partners to address policy issues in their efforts to find practical solutions to problems municipalities face when investing in energy efficiency measures.
The European Union (EU) is the largest contributor to the Armenian window of the E5P fund with €10 million. The Czech Republic, Denmark, Germany, Lithuania, Poland, Sweden, Latvia and Norway have already committed or pledged funds to help Armenia improve energy efficiency, contributing to energy security and economic competitiveness while having a positive impact on the environment. The Head of the EU Delegation to Armenia, Traian Hristea, commented that “energy efficiency and renewable energy is at the core of EU development in Armenia, and the EU contribution to this programme also shows the EU’s willingness to help Armenians ensure their energy independence”.   
The government of Sweden has financed a project identification study with the main aim of approving new projects for implementation this year.
“The signing of the contribution agreement is an important milestone for the country and for the Fund as well. We look forward to seeing new projects implemented in Armenia soon with the support of E5P grants. Potential investments can include: energy efficiency in public buildings, renewable energy (for example, biomass), street lighting, water and wastewater treatment, solid waste management and public transport,” said Anders Lund, EBRD Manager of the E5P Fund.
The establishment of the E5P Fund was first proposed in 2009, under Sweden’s presidency of the European Union, with the aim of improving energy efficiency and environmental protection in the Eastern Partnership region. While the energy intensity of these countries is a serious burden for firms and households, it also represents huge potential for investment in the reduction of CO2 emissions, increased use of sustainable energy, enhanced energy security and affordability, and greater economic competitiveness.
After the first pledging conference in Stockholm in November 2009 raised €90 million from the EU and donor countries, the E5P was established as a multi-donor fund to promote energy efficiency and environmental investments in the Eastern Partnership countries. The E5P resources now stand at €168 million, with €108 million for Ukraine and €20 million each for Armenia, Georgia and Moldova. 
The E5P Fund merges contributions from the EU -  the largest donor -  and donor countries (Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway, Poland, Sweden, Ukraine and the United States of America, and new donors Armenia, Czech Republic, Georgia, Moldova, Romania and Slovak Republic).  The funds are used as grants to leverage national funds and loans from international financial institutions, which include the Council of Europe Development Bank (CEB), European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the World Bank Group, the Nordic Environment Finance Corporation (NEFCO), the Nordic Investment Bank (NIB) and KfW.
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