The EBRD is considering providing an equity investment of up to €25 million in the Southeast Europe Energy Efficiency Fund (“the Fund”) currently under development together with other IFIs including EIB and KfW as the sponsors of the Fund and in cooperation with the European Commission. The Fund will provide senior, subordinated and mezzanine finance mainly through local financial institutions to the Energy Efficiency sector in the pre-accession countries in the Balkan region (defined as: Croatia, Serbia, Bosnia and Herzegovina, Montenegro, FYR Macedonia and Albania) and Turkey. Targeted investors in the SE4F would be both public and private entities.
The Project is expected to have the following sources of transition impact:
Broadening access to sustainable energy finance. The facility will significantly increase the availability, and therefore access to sustainable energy finance in the region, creating new products that allow actors to make small, uncomplicated energy efficiency investments that will contribute to reduced pollution, climate change mitigation, reduced energy bills, and increased energy security and comfort levels.
Demonstration effects of improved energy efficiency among Sub-borrowers. The Project will generate transition impact by demonstrating the benefits of energy conservation and promoting the expansion of energy efficiency and renewable energy lending in the energy inefficient Western Balkan economies and Turkey. The project will demonstrate the effects of rational energy utilisation for improving competitiveness in the light of the rising energy costs in the region.
Transfer of skills. The complementary nature of SE4F’s activities with existing EBRD facilities will result in a larger volume of sustainable energy financing available to the region, helping reach a sufficient mass to begin the long-term transformation of the lending market in this sector. The project is also expected to transfer and build additional expertise related to sustainable energy investment among banks, particularly in the area of assessing the risk and creditworthiness of clients for energy efficiency loans.
Contribution to climate change mitigation and energy security. The facility will contribute to reduced levels of energy consumption and increased production of renewable energy by the requirements applied to end-borrowers.
The Southeast Europe Energy Efficiency Fund will be set up in Luxembourg and its mission is to contribute to the development of a robust energy efficiency and sustainable energy market in the Western Balkan region and Turkey, predominantly by expanding and strengthening the provision of loans to finance Energy Efficiency projects through local financial institutions.
Equity investment of up to €25 million.
The total amount of the first closing of the Fund is expected to be up to €90 million.
Categorised FI (2008). This project offers significant environmental opportunities as it will contribute to the reduction of greenhouse gases. The Fund will be required to comply with the EBRD’s Performance Requirements 2 and 9. Investments financed by the Fund will be required to comply with national requirements for environment, health and safety and labour standards. The Fund will provide the Bank with an annual report on environmental and social matters.
Technical cooperation will be provided to the on-lending local financial institutions and beneficiary companies. The TC will be funded by donor sources. The specific scope of the TC will be defined following the launch of the Fund.
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