Enhancing Support to Energy Efficiency in the Western Balkans Davor Kunc Programme Manager, DG NEAR Habitat Conference on Residential EE, Brussels│ 24-25 April 2017

Content ENERGY EFFICIENCY & RENEWABLES: Policy Context: EE acquis & Energy Community Financing 1: Regional Energy Efficiency Programme (REEP) Financing 2: Green for Growth Fund (GGF) New EE Brochure: "Passport" of EE Policy & Investments in WB6

Policy Context: EE and RE Targets in the Region Adaptations to EU 2020 Lower percentages, phase-in periods Energy efficiency savings of 9% of final energy consumption, by 2018 Renewable energy to be achieved by 2020 Albania 38 %, Bosnia and Herzegovina 40 %, Croatia 20 %, Former Yugoslav Republic of Macedonia 28 %, Montenegro 33 %, Serbia 27 %, Kosovo* 25 % National EE Action Plans (NEEAPs) Operationalize implementation of the transposed acquis, and reaching the Energy Community targets NEAR financed workshops for the creation of first NEEAP – now 2nd and 3rd created and fully owned by the Six NEEAPs and Targets NEAR's policy framework for EE our link with investments

Energy Community: EE Coordination Group Financed by NEAR, meets each 4 months WB6, several Neigh-East countries, IFIs (EBRD, KfW, EIB, IFC, World Bank), donors (GIZ, USAID, UNDP), and DG NEAR Key coordination mechanism: identify gaps, ensure no overlaps Tracking the EU-supported REEP and GGF Identify new financing needs for EE in the region

Evolution of NEAR support to EE Private sector: EEFF & GGF First introduction of an investment fund, for private sector leverage of EU funds Public sector: REEP First introduction of the Public Dialogue window First introduction of ESCOs Residential: REEP Plus Study completed in 2015. Endorsed by the WB6 and EECG. NEAR replenishment of 30 M (MC IPA 2016): leverages 140 M of EBRD & KfW loans.

EE: Investments & Achievements

Energy and Emission Savings & Potential

IPA Budget

Sustainable market for energy efficiency in the Western Balkans REEP is an integrated package of finance, technical assistance and policy dialogue, implemented jointly with the Energy Community Secretariat Objective Sustainable market for energy efficiency in the Western Balkans Window 2 Intermediated financing & Window 3 Direct financing WeBSEFF II €92m financing + €14.5m grants Credit line for local FI For smaller scale EE & RE projects For both public & private sector borrowers, including ESCOs Grant funds support TA and investment incentives. WeBSEDFF (extension) €50m financing + €5.75m grants Direct financing facility Medium scale RE and EE improvements in industrial enterprises For private sector borrowers, including ESCOs. Window 1 ESCO support & Policy dialogue Energy Service Companies (ESCO) €5m grants Legislative support Technical project preparation Policy dialogue €1m (EWBJF) + €1m (EBRD & SIDA) NEEAP and EPBD Utility EEO Procurement of EE goods

REEP Plus Overview New: REEP Plus Objective Sustainable market for energy efficiency in the Western Balkans Direct Lending - Municipalities €20m financing + €4.5m grants (EU IPA + Other Donors) Direct loans provided to the State, City or Municipal Companies, under guarantee of the City or the State Focus on Public Buildings (schools, hospitals, gov. buildings) Supported by capital expenditure grant co-financing and TA Window 4 Direct Lending to Municipalities Credit lines to Private Enterprises, Public & Residential Sectors via Partner banks €108m EBRD & KfW financing + €27.05m grants (EU IPA + Other Donors) Financing green economy investments via local FI For residential sector (EBRD) For SME and Municipal sectors (KfW) Grant funds support TA and investment incentives EBRD Direct Lending €30m (EBRD) financing + €1m grants (EU IPA + Other Donors) Direct lending to Private sector borrowers Medium scale RE and EE improvements in industrial enterprises Technical assistance for project assessment and monitoring May be expanded to include risk-sharing Window 2 Credit lines for Private, Public and Residential Sectors via Partner Banks & Window 3 Direct Lending Sustainability projects including ESCOS & Small Scale Renewables Energy Service Companies (ESCO) development €3m grants (EU IPA + Other Donors) Technical assistance to support the preparation of tender documentation for ESCO projects Policy dialogue €2.5m grants (EU IPA) Supporting 2nd and 3rd NEEAP implementation and transposition of EED and EPBD Window 1 Market Development & Policy dialogue

PROJECTS AND INVESTMENTS Incentive grants address barriers regarding pricing and credit risk: Reward energy, CO2, and resource savings Make technologies with high (upfront) costs affordable Address capital and especially long-term finance gaps Address first-mover risk in the absence of track record in the sector Role of Financing PROJECTS AND INVESTMENTS Working with governments to support the development of a strong institutional and regulatory framework that incentivises EE and RE TECHNICAL ASSISTANCE POLICY DIALOGUE Technical assistance to overcome barriers; includes: market analysis, energy audits, training awareness raising [Video: REEP, Plum Factory]

"Passport" for EE policy and investments in the WB6: Case for EE investment in the region Evolving policy framework Existing coordination mechanisms Review of past and current efforts Achievements in terms of energy savings and CO2 reductions, both in gross terms and relative to regional and national targets Role of incentives in EE finance Obstacles on channelling EE investments Review of the two key existing facilities GGF (Green for Growth Fund) REEP (Regional Energy Efficiency Programme) Other EE stakeholders in the region

www.wbif.eu www.ggf.lu www.wb-reep.org Thank You!