1. Capacity Building for GHG Emissions Reduction through Energy Efficiency in Romania UNDP/GEF's Energy Efficiency Financing Team Converting energy efficiency ideas into real investment projects throughout Romania “Implementation of the European Environmental Directives: Problems and Solutions” September 29th 2004 Mark Velody Project Manager Tel. 021 231 2008 energie@undp.ro UNOPS Project Office Str. Washington nr.45 Bucuresti, Romania www.energie.undp.ro

2. Capacity Building for GHG Emissions Reduction through Energy Efficiency in Romania I will introduce three themes today…

3. Capacity Building for GHG Emissions Reduction through Energy Efficiency in Romania

6. So let’s begin… 1. Why a capacity building project for Energy Efficiency Financing?

7. Capacity Building for GHG Emissions Reduction through Energy Efficiency in Romania There are environmental, economic and social reasons to improve energy efficiency m Environmental - the Energy Sector is the largest contributor to greenhouse gases and global warming m Economic - energy intensity inhibits economic development m Social - less waste, warmer people etc

8. Capacity Building for GHG Emissions Reduction through Energy Efficiency in Romania So… a UNDP/GEF project has been set up to leverage financing for energy efficiency projects Objectives are strictly environmental... - GHG reduction m …but activities strictly commercial - identify potentially ‘bankable’ EE/renewable projects - help persuade a bank/financer to fund the project - carry out studies to support the loan/investment

9. Capacity Building for GHG Emissions Reduction through Energy Efficiency in Romania Why Energy Efficiency above renewables? m Romania has created a strong economic incentive to invest in energy efficiency - energy prices are higher, so Romanians are now open to the idea of investing to lower bills m Romania has not (yet) created a strong economic incentive to invest in renewable energy - it difficult to get renewable investments to ‘fly’ - so there are few ‘bankable’ proposals at present

10. Capacity Building for GHG Emissions Reduction through Energy Efficiency in Romania Why is there a need to focus on Financing? m Banks – do not recognise EE as an investment opportunity m Third party financiers – few ‘ESCOs’, little local experience of this model m Private sector investors – want to lower energy bills – but do not know how m Public sector investors – shy away from commercial financing

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12. Project partners are ARCE, UNDP and GEF m Romanian Agency for Energy Conservation (ARCE) - Who represent the Government of Romania m United Nations Development Programme (UNDP) - Who are carrying out the project through the United Nations Office for Project Services (UNOPS) m Global Environment Facility (GEF) - Who have provided $2 million in co-financing

13. Capacity Building for GHG Emissions Reduction through Energy Efficiency in Romania Our strategy is to lower GHG emissions by: m Turning energy efficiency ideas into financed projects - Using small amounts of grant financing… - …to leverage large amounts of commercial financing m Pass on expertise in how to do this as widely as possible - To our beneficiaries, partners, consultants, staff and other stakeholders

14. Capacity Building for GHG Emissions Reduction through Energy Efficiency in Romania Our beneficiaries (so far) include both public and private sector investors m Municipalities: Alba Iulia, Campulung Moldovenesc, Cluj-Napoca, Gheorghieni, Iasi, Miercurea Ciuc, Orastie, Radauti, Satu Mare, Sighisoara, Suceava, Vaslui, Vatra Dornei,Victoria, Targu Jiu, Tarnaveni and Topoloveni. m Companies: Ambro, Ardealu Carei, Electroaparataj, Goscom Miercurea Ciuc, Infotim Timisoara, Iridex, Isovolta, Ulerom, Vrancart

15. Capacity Building for GHG Emissions Reduction through Energy Efficiency in Romania … and we work with a wide range of other stakeholders m ARCE – and its branches throughout Romania m Consultants, who include (so far) ASA Holding, EnergoBit, Forenerg, ICPT Instalati, SC Proiect, Trapec, Wayda si Wayda m The financial community – banks, special funds such as FREE and RIIEC, the loan guarantee community, suppliers who offer supplier credit.

16. Capacity Building for GHG Emissions Reduction through Energy Efficiency in Romania … to support many different types of energy efficiency investment projects Building rehabilitation Schools Hospitals Heating and cooling District heating CHP Lighting

17. Capacity Building for GHG Emissions Reduction through Energy Efficiency in Romania This is what we do… m Identify possible energy efficiency investments m Assess if three key success factors are present: - Technically realistic proposals (or ideas) - by solvent/creditworthy project developers - with determination (will) to carry out the project m Help to identify commercial financing sources m Enter into a tri-partite Agreement-in-Principle m Prepare studies to support the investment

18. Capacity Building for GHG Emissions Reduction through Energy Efficiency in Romania The ‘Agreement-in-Principle’ is a key step... If - UNDP/GEF funds a Feasibility Study (and if the results of the study are positive) Then - Financier will make investment funds available; Project Developer will carry out the EE project

19. Capacity Building for GHG Emissions Reduction through Energy Efficiency in Romania Based on Agreements-in-Principle, we can provide two basic services m Technical Assistance* - our main service - Typically, grant-funded feasibility studies m Direct Contributions** – selected projects only - Grants of up to 20% of an investment… - If financing is in place for the other 80% * Technical Assistance is available for both Private Sector and Public Sector applicants ** Direct Contributions may be awarded to for Public Sector projects only, up to a limit of $50,000 per project. Funds are awarded only to the best projects – as defined by an evaluation committee using criteria published at www.energie.undp.ro.www.energie.undp.ro

20. Capacity Building for GHG Emissions Reduction through Energy Efficiency in Romania We can also advise on sources of commercial financing… Bank loans Special funds and equity funds Guarantees and other financial instruments Suppliers credit Third-party financing/ESCO facilities (We have a full-time banker on our team)

21. Capacity Building for GHG Emissions Reduction through Energy Efficiency in Romania … including financing from our ‘sister’ GEF project – the ‘FREE’ Romanian Energy Efficiency Fund (our ‘sister’ project) UNDP/GEF (‘our project’)

22. Capacity Building for GHG Emissions Reduction through Energy Efficiency in Romania Work is carried out by a core team m Mark Velody – Project Manager m Laura Radulescu – Outreach Manager m Bogdan Angheluta – Energy Efficiency Manager m Stefania Racolta – Head of Banking Relations m Ciprian Ghetau – Project Finance Manager m Roxana Schiopu – Office Manager m Emilian Popescu – Driver/Administrator … supported by lots of consultants

23. Capacity Building for GHG Emissions Reduction through Energy Efficiency in Romania And we are proving that the model works! No. of applications/ideas evaluated – 172 No. of Agreements-in-Principle signed – 30 No. of external studies launched – 16 No. of studies by in-house team – 4 The first few projects are now implementation, and studies under-way so far are should lead to energy efficiency investments of at least $4 – 7 million

24. Capacity Building for GHG Emissions Reduction through Energy Efficiency in Romania

25. How YOU can make a real and rapid contribution to the environment m Identify potential UNDP/GEF beneficiaries - energy consumers who think their bills are too high - from the private sector or the public sector m Tell them about UNDP/GEF - and suggest that they contact us for assistance We will do all we can to turn their ideas into real energy efficiency projects!

26. Capacity Building for GHG Emissions Reduction through Energy Efficiency in Romania Recap – what we do… m Identify possible energy efficiency investments m Assess if three key success factors are present: - Technically realistic proposals (or ideas) - by solvent/creditworthy project developers - with determination (will) to carry out the project m Help to identify commercial financing sources m Enter into a tri-partite Agreement-in-Principle m Prepare studies to support the investment

27. Capacity Building for GHG Emissions Reduction through Energy Efficiency in Romania

30. So… please direct potential beneficiaries to: www.energie.undp.ro Or phone 231 2008, or talk to me today

31. Capacity Building for GHG Emissions Reduction through Energy Efficiency in Romania Mark Velody Project Manager Tel. 021 231 2008 energie@undp.ro UNOPS Project Office Str. Washington nr.45 Bucuresti, Romania www.energie.undp.ro UNDP/GEF's Energy Efficiency Financing Team Converting energy efficiency ideas into real investment projects throughout Romania “Implementation of the European Environmental Directives: Problems and Solutions” September 29 th 2004