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Saving energy in Sofia homes

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New windows and insulation can reduce energy use by 50%.

Energy efficiency chief Tasko Ermenkov: programme benefits 30,000 homes.

In the suburbs of the pretty Bulgarian capital of Sofia, communist-era apartment blocks are developing odd façades. New insulation panels installed on the outside of some apartments make them appear to stick out from the flats above, below and beside them. Others are acquiring new, air-tight, energy-efficient windows, looking sharply modern compared to the neighbours’ draughty older windows.

It’s all about saving energy at the household level. Flats built in socialist times were poorly constructed, with little insulation to keep heat in and cold out, but that didn’t bother residents. Electricity and heat were supplied in abundance by centralised municipal systems and funded almost entirely by the state, so no one worried about conserving energy, even in the bitter winter months.

Times have changed and consumers now have to cover their own utility bills as well as funding household improvements to reduce energy costs.

And so energy efficiency is catching on, thanks to the stick of rising fuel prices and the carrot of €50 million in EBRD-backed loans and €10 million in donor support for energy improvements in homes.

Burning fuel and money

It’s all part of the drive to cut the huge amount of energy wasted in Bulgaria, be it in draughty homes and public buildings or in outdated factory production processes. Bulgaria remains one of the most energy-intensive countries in the region: it uses at least twice the amount of energy consumed in western European countries to produce each unit of GDP, according to 2003 figures from the International Energy Agency.

“Energy efficiency is an important part of improving the socio-economic conditions of Bulgaria’s people who otherwise pay too much to stay warm in winter,” says EBRD President Jean Lemierre. “We have to help rein in the waste of energy that is a legacy of the command economy across the EBRD countries of operation. Bulgaria is leading the way.”

“Households can achieve 40-50 per cent energy savings just through changing their homes’ windows or insulation,” says Tasko Ermenkov, head of Bulgaria’s energy efficiency agency. “A wider variety of energy efficiency measures can yield 70% savings.”

Closing nuclear units

The residential energy efficiency programme builds on Bulgaria’s agreement with western European states and the European Community (EC) to close four of its Kozloduy nuclear power units considered unsafe by the international community. In support of this agreement the EC, certain of its member states and Switzerland funded the Kozloduy International Decommissioning Support (KIDS) Fund which currently has €255 million in commitments. Consequent to the decision to close the four nuclear units the fund, managed by the EBRD, assists Bulgaria with other pressing energy issues including efficiency and  necessary restructuring, upgrading and modernisation of the energy production, transmission and distribution sectors.

The EBRD uses small loans to homeowners combined with grants from the KIDS Fund to help Bulgaria ‘find’ new energy by reducing energy losses. Cutting energy costs helps the country to improve its competitiveness and reduce the environmental impact of its economic growth, according to Terry McCallion, the EBRD banker who established the residential credit lines.

“Once the household improvements are done and independently verified, each homeowner gets a KIDS grant of up to 20 per cent of their project costs,” says Zoltan Kiss, KIDS Fund manager.

Waste not, want not

The EBRD funds are loaned at market rates via four Bulgarian banks to homeowners installing new windows, insulation, heat pumps, solar water heaters and/or efficient gas boilers. The credit line also finances households to switch to renewable fuels including wood waste and wood pellets (abundant in well-forested Bulgaria), cherry pits from a local jam company, and sunflower seed shells from a vegetable oil manufacturer.

The renewable energy equipment supplier, Erato, says its ultra-efficient burners pay for themselves in less than three years because, at two euro cents per kilowatt hour, the locally-produced fuel is half the price of imported fuels, particularly natural gas.

“Overall this finance programme is a promotional action which should bring benefit to 30,000 households across Bulgaria. It won’t solve the whole problem but will build a lot of awareness,” says Mr Ermenkov. His government is developing a similar rebate programme to further push energy efficiency in households and public buildings, with €350 million from state coffers.

“I’m glad that western European countries, the EC and the EBRD have helped us,” Mr Ermenkov adds. “Through this programme the EBRD has achieved some real innovations in finance here, both as a financial institution and as KIDS Fund manager.”

Written by Kate Dunn, EBRD’s Senior Writer.

Contact:

EBRD Bank lending
Tel: +44 20 7338 6554
Fax: +44 20 7338 6119
Email: mccallit@ebrd.com

Kozloduy Fund at EBRD
Tel: +44 20 7338 6897
Fax: +44 20 7338 7175
Email: goldspip@ebrd.com

8 February 2006