Project summary document

Project description
and objectives:

The EBRD is considering establishing a EUR 50 million Western Balkans Sustainable Energy Direct Financing Facility (“WeBSEDFF” or the “Facility”), which would provide the EBRD with an instrument to extend debt financing for sustainable energy (industrial energy efficiency and small renewable energy) projects to local enterprises in Albania, Bosnia & Herzegovina, Croatia, FYR Macedonia, Montenegro and Serbia, currently not sufficiently supported by other financing sources.

Grant funds of up to EUR 8 million will be sought for incentive payments. The incentives will be provided to the borrowers under the Facility upon successful completion of their projects and will aim to overcome various barriers to sustainable energy investments in the Western Balkans.

The size of the individual loans provided under the Facility will be in the range of EUR 1 million to EUR 6 million. WeBSEDFF will be complementary to the Western Balkans Sustainable Energy Credit Line Facility ("WeBSECLF") for financing smaller energy efficiency and renewable energy projects via credit lines to participating banks.

WeBSEDFF will be also be supported by TC funding of EUR 5 million (see below) for pipeline/project preparation, due diligence and an institutional capacity building component.

Transition impact:

The transition impact of the Facility is expected to be derived from the following factors:

• Demonstration of new replicable behaviour and activities
  The project will demonstrate the impact of efficient energy utilization on improving industrial productivity and competitiveness in the energy intensive economies of the Western Balkan countries through promotion of investments in rational energy utilization. It will demonstrate how to overcome barriers and market failures that prevent energy efficiency and renewable projects from becoming commercially viable.
  
  
• Demonstration of new financing mechanisms
  The project demonstrates a new design of incentive payments, the level of which is linked to the externality (CO2 emissions avoided), thus enhancing incentives to maximise energy savings and facilitating future transition of the grant scheme into market based shadow pricing of electricity through white/green certificates, emissions trading or emission taxes;
  
  
• Transfer of skills
  The project is expected to build and transfer expertise related to energy efficiency and renewable energy sources to local companies. Local companies will acquire knowledge in assessing the need for energy efficiency measures as well as in financing the corresponding investments in such projects;
  
  
• Legislative reforms and capacity building
  Part of the TC funding will be used to support dialogue with 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 create a proper framework for the development of SE projects in the region and will help the countries in the region to embrace a SE path for the development of their economies.

The client:

Local private enterprises legally incorporated in Albania, Bosnia & Herzegovina, Croatia, FYR Macedonia, Montenegro and Serbia.

EBRD finance:

EUR 50 million.

Total project cost:

EUR 58 million (including EUR 8 million anticipated as grants).

Environmental impact:

Given its aims, it is anticipated that the overall environmental impact of this project will be very positive. Sub-projects financed through this Facility will be appraised on a case-by-case basis. The Bank will take a risk-based approach to environmental due diligence with all projects undergoing a basic environment, health and safety review prior to project approval. For companies with higher environmental risk, additional studies will be carried out with assistance from external consultants. These 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 action plan as required. Borrowers will be required to comply with the applicable national and EU environmental, health and safety requirements and provide the Bank with an annual report on environmental, health and safety issues.

Technical
cooperation:

A total of EUR 5 million will be solicited from donors to support the Bank’s efforts in pipeline/project preparation, due diligence (including drafting and negotiating of legal documents), post investment monitoring and support of development/refining of institutional and regulatory framework.

For consultant opportunities for projects financed by technical cooperation funds, visit procurement of consultants.

Company contact:

N/A

EBRD contact:

Donald  Mishaxhi, Operation Leader: mishaxhd@ebrd.com

Business opportunities:

For business opportunities or procurement, contact the client company.

General enquiries:

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com