1. EBRD’s Experience in Financing Sustainable Energy Projects in the Region
Yevgeniya Afanasenko,
Principal Environmental Adviser,
EBRD, London

2. What is EBRD?
European Bank for Reconstruction and Development (EBRD) is an international financial institution, promotes transition to market economies in 35 countries from central Europe to central Asia and SEMED
Together with our donors, we promote private sector competition underpinned by the rule of law, a sustainable approach to modernising infrastructure, the efficient use of resources, and an environment that is conducive to growth.
Founded in 1991
Owned by 65 countries and two inter-governmental institutions (EU and EIB)
Capital base of €30 billion
A+++ rated bank (from all 3 main rating agencies)

3. EBRD’s sustainable energy financing business model
Tailored financing instruments
Direct financing
Indirect-financing via local banks (SEFFs)
Investment grant support for climate technology transfer
Blended concessional finance so as to overcome affordability and risk perceptions
PROJECTS & INVESTMENTS
Activities to drive markets and investments
Energy and resource audits to identify green investments
Integrated technical, financial and marketing teams to support client banks in developing sustainable energy lending
Risk assessments related to climate vulnerabilities
Transition gaps and market scoping studies
TECHNICAL ASSISTANCE
POLICY DIALOGUE
Working with governments
To address sustainability and environmental market failures
To strengthen the institutional and regulatory context and create optimum conditions for green investments to take place

4. Green Economy Transition (GET) initiative
The GET aims to further scale up green business volume, and to expand to new areas of activity, such as environmental protection and technology transfer.
1994
2006
2013
2015
Sustainable Energy Initiative (SEI)
Sustainable Resources Initiative (SRI)
Green Economy
Transition (GET)
Energy Efficiency banking team
Energy efficiency
Renewable energy
Water efficiency
Material efficiency
Adaptation to climate change
Environmental protection
Technology transfer
The EBRD has been engaged in sustainable energy finance since its establishment.
In 2006, the EBRD launched the SEI to address the twin challenges of energy efficiency and climate change.
The EBRD was the first MDB with a dedicated pool of technical experts in-house.
In 2009, the EBRD became the first MDB to set itself a carbon emissions target.
In mid-2014, the EBRD has already exceeded the three year ( ) target under the UN’s Sustainable Energy for All initiative.
The Sustainable Resource Initiative (SRI) is an umbrella initiative launched in 2013.
The SRI promotes efficiency and innovation with regards to energy, water and materials.
The SRI relies on a business model that combines investments with technical assistance and policy dialogue.
With the SEI, the EBRD continues to finance energy efficiency, renewable energy and adaptation projects.
In addition, the SRI drives water and material efficiency, for example, through the promotion of recycling and the reuse of waste streams.

5. EBRD GET track record
10 years after launch of SEI in 2006, results as at end 2015:
1,080 projects with green component
€19.5 billion cumulative EBRD SEI/SRI financing
€106.9 billion cumulative total project value
64% in private sector
30% of the Bank’s overall business in 2015

6. EBRD direct lending on energy efficiency - Poland
In the renewables sector in Poland the EBRD has invested about €500 million in more than 10 projects, with total installed capacity exceeding 900MW.
Radzyń power plant
13 wind turbines with a total capacity of 39 MW
total project cost PLN 285 million (€67.9 million equivalent)
The project will lead to saving of approximately tCO2/year
Banie wind farm
first phase of the project was the successful installation of 50MW capacity, followed by a 56 MW extension
total project cost 252 PLN (€57 million), including EBRD €37 million
Reduction of approximately tCO2/year
© CAEPC

7. EBRD direct lending on energy efficiency - Ukraine
Astarta Biogas Plant
Biogas plant at Astarta’s Globino sugar plant, with the capacity to process 1,200 tonnes of waste beet pulp per day. The biogas is used for steam and electricity production; the organic residues used as fertiliser and for water recovery.
Technical assistance - €30,000 for energy audits, strategic assessment of biomass residue optimisation, funded by the Regional Energy Audit Programme for the Corporate Sector - EU Neighbourhood Investment Facility.
Energy savings: 6,400 toe/year, decrease of natural gas consumption by 46% and water consumption by 10%.
Emission reductions: 20,000 tCO2/year
Alchevsk Metallurgical Plant 303 MW Gas Turbine Power Station
The project features the unique technology of secondary metallurgical gases transformed into electric power (Mitsubishi Heavy Industries technology)
Gas Turbine Power Station functioning without natural gas consumption and allowing for 44% power efficiency is an unparalleled example of synergy between green technology and industrial efficiency for Ukrainian steel production.
CO2 emissions reduction - more than mln tCO2/year
© CAEPC

8. Sustainable Energy Financing Facilities – leveraging local banks
SEFF facility partners with local financial institutions such as banks, to establish sustainable energy financing channels. These partnerships help direct more finance towards investment opportunities where energy and other resources are used more rationally. Finance for sustainable energy projects is provided for two key areas: energy efficiency and small-scale renewable energy.
Network of more than 100 local financial institutions (banks, microfinance institutions and leasing companies),
Providing around €500 million in credit lines for sustainable energy projects per year.
Almost €4 billion from the EBRD for sustainable energy financing since 2006
35 integrated programs in 24 countries
To more than 100 local partner financial institutions
More than 100,000 companies and residential borrowers reached
These projects have led to over 6 million tonnes of CO2 emissions reductions per year
Saving over 14 million MWh equivalent per year
Through SEFFs, the EBRD extends credit lines to local financial institutions that seek to develop sustainable energy financing as a permanent area of business. Finance for sustainable energy projects is provided for two key areas: energy efficiency and small-scale renewable energy. Local financial institutions on-lend the funds which they have received from the EBRD to their clients, which include small and medium-sized businesses, corporate and residential borrowers, and renewable energy project developers.
In addition to financing, each SEFF establishes a Project Implementation Team, comprised of local and international experts who provide support to participating local financial institutions and their clients. They undertake a range of activities, such as training staff in promoting the new financial product and how to recognise technically eligible projects, marketing of the facility, providing technical advice and studies, and supporting the creation of standards for environmental due diligence.
These experts also provide borrowers with support in identifying energy saving opportunities, developing financing applications, enhancing project design, and advising on high performance technologies.
SEFF financing for businesses typically ranges from a few hundred thousand to a few million euros to support the purchase and installation of equipment, systems or processes. Across the EBRD region, SEFF financing has supported diverse projects in virtually all sectors, ranging from agribusiness, food processing, and manufacturing to industry, construction and services.
Residential loans cover a few thousand to a few hundred thousand euros, most often to support improvements on the building envelope. Various groups have benefited from SEFF loans including individual owners, groups of home owners and multi-apartment associations.
Where necessary, the EBRD is working closely with donors to provide not just financing for the technical support, but also investment support to overcome affordability constraints and address cost and risk barriers.
FINTECC is part of the EBRD's contribution towards climate technology transfer to countries in transition.
MULTILATERAL DONORS
EUROPEAN UNION, CLIMATE INVESTMENT FUNDS (CIF), GLOBAL ENVIRONMENT FACILITY (GEF), NORTHERN DIMENSION ENVIRONMENTAL, PARTNERSHIP (NDEP), EASTERN EUROPE ENERGY EFFICIENCY AND ENVIRONMENT PARTNERSHIP (E5P), WESTERN BALKANS INVESTMENT, FRAMEWORK (WBIF), EBRD SHAREHOLDERS SPECIAL FUND
BILATERAL DONORS
AUSTRIA, CANADA, CZECH REPUBLIC, DENMARK, FINLAND, FRANCE, GERMANY, GREECE, ITALY, JAPAN, LUXEMBOURG, NETHERLANDS, NORWAY, SPAIN, SWEDEN, SWITZERLAND, TAIPEI CHINA, UNITED KINGDOM, UNITED STATES

9. Sustainable Energy Financing Facilities
SEFFs are effective in reaching a wide range of industrial and residential clients
Monitoring team
Commercial banks
Sub-borrowers
EBRD
Project team
Donor-funded contract
Credit line
Grant incentives
Sub-loans
Technical support
(project assessment)
(project verification)
Support
In 2015 the EBRD stepped up its Sustainable Energy Finance Facilities (SEFFs), whereby they have now been extended to 23 countries.
The EBRD SEFF programme extends credit lines to local financial institutions for on-lending to their clients from the industrial, commercial, residential and municipal sectors for investments in energy efficiency and small-scale renewable energy projects.
In 2015, the Bank launched its first SEFF with a focus on climate change adaptation in Tajikistan. Funds provided to local financial institutions will be on-lent in local currency to SME clients and households to help them adopt technologies and practices to reduce soil erosion and pressure on water and energy resources, both of which are key environmental threats in Tajikistan. The facility is supported by one of our long-standing climate finance partners, the Climate Investment Fund (CIF).
The EBRD operates its SEFFs through a network of more than 100 local financial institutions (banks, microfinance institutions and leasing companies), providing around €500 million in credit lines for sustainable energy projects per year.
Each €1 billion of EBRD SEFF investment avoids the equivalent of carbon dioxide emissions of 2.5 million tonnes each year.

10. EBRD PolSEFF - Poland
PolSEFF (2011 – 2014) - €180 million credit line facility investments projects
PolSEFF II (2015) - €200 million which will be on-lent via local banks to small and medium-sized enterprises (SMEs). The loans will finance investments to replace or upgrade heating, cooling, electric and related systems in order to lower companies’ energy bills and decrease CO2.
To date, the EBRD – with financial support by the European Commission – has financed more than 2,000 energy efficiency projects in Polish SMEs worth around EUR 200 million, resulting in total annual energy savings of 342 GWh and total emission reduction of 102,000 tCO2.
The EBRD has launched its second Polish Sustainable Energy Financing Facility (PolSEFF2) with a volume of €200 million which will be on-lent via local banks to small and medium-sized enterprises (SMEs). The loans will finance investments to replace or upgrade heating, cooling, electric and related systems in order to lower companies’ energy bills and decrease carbon emissions.
The framework will be complemented by investment grants provided by the Polish National Fund for Environmental Protection and Water Management (NFOSiGW) and technical cooperation provided by the European Commission.
PolSEFF2 builds on the highly successful first stage of the programme that enabled hundreds of Polish businesses over the past three years to invest in energy efficient solutions.
For the first time the Polish authorities are joining the effort through the participation of NFOSiGW. The Fund will provide investment grants of up to PLZ60 million (approximately EUR14.2 million) under its new programme “Improving energy efficiency. Energy saving investments in SMEs.” Established in 1989, NFOSiGW is involved in co-financing large investments with nationwide significance.
Grzegorz Zieliński, EBRD Director for Poland, said: “Small and medium-sized businesses are the engine of our economy. Projects like PolSEFF are of paramount importance for the long-term energy sustainability in Poland and good for business. We are extremely pleased to be cooperating with NFOSiGW and see it as a crucial element for the success of the second version of PolSEFF.”
PolSEFF2 is implemented through Polish commercial banks. Their role is critical for reaching out to local SMEs clients. BNP Paribas Bank Polska SA will be the first bank to joining the initiative.
“Targeting energy-saving investments by SMEs is fundamental for the economic development in Poland, but it is also crucial for achieving our country’s goals in environmental protection,” said Małgorzata Skucha, President of NFOSiGW. “This new programme will demonstrate the financial and environmental viability of investing in the best available energy efficiency and renewable energy technologies across all Polish SME sectors.”
To date, the EBRD – with financial support by the European Commission – has financed more than 2,000 energy efficiency projects in Polish SMEs worth more than EUR 190 million, resulting in total annual energy savings of 342 GWh and total emission reduction of 102,000 tonnes of CO2.

11. USELF: Ukraine Sustainable Energy Lending Facility
Ukraine Sustainable Energy Lending Facility (USELF) is an investment facility of up to €140 million established by the EBRD for fostering renewable energy projects in Ukraine.
USELF is structured to provide financing directly from the EBRD for small and medium projects with a simplified and rapid approval process, so reducing transaction costs.
Target projects include all forms of power generation from renewable energy sources, including hydro, wind, biomass, biogas and solar. Biomass and input for biogas production would come from sustainable sources and / or organic waste. Production and distribution of liquid biofuels are not eligible.
Over 100 applications received, projects are feasible, most of them require additional work and technical assistance
In , the EBRD financed 9 projects – 3 solar, 2 biogas, 2 wind, biomass and small hydro

12. USELF: success stories
Ecoprod biogas project
Construction of a biogas plant which will generate about 10.0 GWh/year for a large agricultural company. The generated electricity to be sold to the grid at the feed-in tariff under the Green Tariff Law. GEF support of EUR 27,500 for project licensing, commercial negotiations, project management, and environmental due diligence.
Policy dialogue - FIT for biogas was finally introduced in Ukraine at the level of cEUR/kWh, comparable with the EU levels.
Energy produced: 5.8 million m³stp of biogas/year
Emission reductions: 9,800 tCO2/year
Porogi Solar
4.5MW solar power plant in the village of Porogi
The Global Environment Facility provided EUR 47,500 for project preparation, commercial negotiations, project management, and environmental due diligence.
Ongoing policy dialogue assists the Ukraine authorities in preparation and adoption of new secondary legislation to support renewable energy sources.
Energy produced: 5,000 MWh/year
Emission reductions: 5,000 tCO2/year
© CAEPC
COMPANY BACKGROUND
Ecoprod is a well-established operation and the largest agribusiness player in Donbass. It has around 5,000 heads of cattle and about 25,000 hectares of agricultural land. Its reputation and reliability have earned it an impressive customer base, which includes the likes of Cargill, Danone and Wimm-Bill-Dann.
INVESTMENT BACKGROUND
After giving the problem a lot of thought, Mr Melnik, the owner of Ecoprod, approached the EBRD with a project to help Ecoprod utilise its cattle manure, silage and other agricultural waste. The project preparation was not an easy ride in any respect: three years of diligent efforts by EBRD consultants transformed the initial project concept completely. The company is planning to develop, construct and operate a 1.5MW biogas plant, which will produce 5.8 million cubic metres of biogas a year to be used for the generation of 9,900 MW of electricity. It will be one of the first biogas plants in the country to sell generated electricity to the grid.
The financing package to the Company arranged by the Bank includes a seven-year EBRD loan of €3.1 million and a 15-year loan of €1.1 million from the Clean Technology Fund (CTF).
Another important feature of the project is closely linked with the EBRD’s sector policy dialogue in Ukraine. The project case was widely used by the Bank’s consultants for Ukrainian policy-makers to clarify and define the feed-in tariff for biogas, which was originally lacking in the country. Our efforts finally paid off when necessary amendments to the law were approved in November 2012.
The energy production and tCO2 figures from the project consultant

13. UKEEP: Ukraine Energy Efficiency Program
€150 million credit line for Ukrainian banks: UkrExim - $100m; Kreditprom - $10m; Forum - $25m; Mega -€10m
For on-lending to private sector for industrial energy efficiency and small renewable energy projects
€ 2 million grant component from donors (Sweden and Austria) to address market barriers to investments:
Project preparation, marketing, information campaign
Project evaluation and assistance to end-users and banks in project design through energy audits
Impact to date: 300 projects screened; 50 energy audits completed; 100 projects worth € 140 million committed

14. UKEEP: success stories
Energy efficient steel casting
To reduce production costs derived from rising electricity and natural gas prices, OJSC Stal invested in a range of energy efficiency (EE) equipment: replaced its old compressors, reconstructed one of its thermal kilns and installed new equipment for electric arc furnace, such as high capacity transformer, high voltage switch box and automatic control system.
Production costs saving by almost US$1,000,000
Annual natural gas saving: 670,000 m3
Annual electricity saving: 9,300 MWh
The investment will reduce emissions by 8,900 tCO2/year
Biogas use in the agribusiness
The project will enable Nyva Pereyaslavschyny to use straw as fuel instead of natural gas for their heat generation. The straw boilers will replace gas boilers and fully satisfy heating needs of the pig farms.
Main investment is the installation of three straw boilers. Installed capacity of 3x600kW operating at 85% efficiency.
Decreased natural gas consumption by 1 million m3 per year
The decreased energy consumption will lead to a reduction of almost 30,000 tCO2/year during the project lifetime
Annual savings of more than $300,000
© CAEPC

15. FINTECC - Finance and Technology Transfer Centre for Climate Change
FINTECC is part of a global initiative towards climate technology transfer. We aim to ensure that countries have access to technologies and practices, which help mitigate and build resilience to climate change at COPs 13 and 14 to facilitate deployment of technologies with low market penetration. The programme combines policy dialogue, technical assistance and non-TC grants. Operational in Ukraine from late 2015
Eligible technologies:
Cogeneration and tri-generation (combined heat, power and cooling) turbines
Waste and waste water treatment installations > 2MWt
Biogas installations of any size
Organic Rankine Cycle turbines
Biomass
Heat recovery
Water saving/recycling technologies
Steam
Energy/Resource management system
All Multilateral Development Banks have established Regional Technology Transfer Centres, using initial funding from the GEF under their Long-Term Program on Technology Transfer. This program was set up with a mandate from the Conference of the Parties to the UNFCCC.
As the EBRD’s Regional Technology Transfer Centre, FINTECC supports businesses in implementing climate technologies. We also play a vital role in supporting climate technology transfer, across different regions and sectors.
FINTECC is a programme that helps companies in participating EBRD countries of operations to implement innovative climate technologies. The programme offers technical assistance provided by the EBRD and international consultants, as well as incentive grants for companies to introduce eligible technologies. Grants are available to the companies as a complement to EBRD financing.
Technical Support
The programme is available to support ETC, SEMED countries and Ukraine in creating enabling policy environments for climate technologies.
Investment Support
The level of grant incentives are determined by the EBRD on a case-by-case basis.
FINTECC Incentive grants – (non-TC grants) :
Always goes with EBRD financing (loan/equity)
Available for private sector clients* from all corporate sectors excluding subsidiaries of multinational companies
Projects of any size can be supported
Covers from 5% to 25% percent** of the eligible cost
Grant cannot exceed USD 1 million
Grant cannot exceed 25% of the EBRD loan
* - FINTECC grant cannot be combined with USELF programme
** - Determined case-by case based on the grant calibration criteria
Eligible cost includes costs of design, supply, installation and commissioning of eligible technologies and auxiliary equipment
Policy support

16. FINTECC – Technical support and Policy Dialogue
As well as receiving financial support for their projects, EBRD clients are also eligible to apply for a FINTECC incentive grant. These capex grants are needs-based financial incentives for demonstration projects that implement the best available climate technologies, within a specific sector and country. 
17 signed transactions, incentives worth 3.1 mln USD, supporting 39 mln USD of GET investments. Transactions benefitting – agribusiness (7), manufacturing and services (7), natural resources (1), corporate (1), property and tourism (1)
FINTECC is a programme that helps companies in participating EBRD countries of operations to implement innovative climate technologies. The programme offers technical assistance provided by the EBRD and international consultants, as well as incentive grants for companies to introduce eligible technologies. Grants are available to the companies as a complement to EBRD financing.
Technical Support
The programme is available to support ETC, SEMED countries and Ukraine in creating enabling policy environments for climate technologies.
Investment Support
The level of grant incentives are determined by the EBRD on a case-by-case basis.
FINTECC Incentive grants – (non-TC grants) :
Always goes with EBRD financing (loan/equity)
Available for private sector clients* from all corporate sectors excluding subsidiaries of multinational companies
Projects of any size can be supported
Covers from 5% to 25% percent** of the eligible cost
Grant cannot exceed USD 1 million
Grant cannot exceed 25% of the EBRD loan
* - FINTECC grant cannot be combined with USELF programme
** - Determined case-by case based on the grant calibration criteria
Eligible cost includes costs of design, supply, installation and commissioning of eligible technologies and auxiliary equipment
Policy support

17. Ukraine Residential Energy Efficiency Financing Facility (IQ Energy)
Investment potential – EUR billion
EUR 75 million financing via participating Ukrainian banks for residential energy end-users (owners of flats, houses, OSBBs)
EUR 15 million from E5P available for incentive payments (15-20% for individuals, 25-35% for OSBBs)
For energy efficiency materials and equipment, including installation works, in line with Technology Selector
Kick–starting the market for EE equipment, materials, services
EBRD policy dialogue from 2009 (Market Assessment Report, draft law on EE in buildings, EPBD regulations, secondary legislation)

18. EBRD Technical Assistance
To fulfil its mandate to promote development of free market economies in Central and Eastern European countries, the EBRD provides comprehensive technical assistance, training, and advisory services to address all aspects of the economic and social transformation. Grant and concessional resources from donors and from the EBRD Shareholder Special Fund play a vital role in enabling the EBRD to address the transition challenges in its countries of operations. TA funds are used for:
Energy/Resource audits to identify investment opportunities
Energy/Resource Efficiency Management Systems assessment
Energy/Resource Management Training
BAT Assessment
Gap analysis for ISO standard and road map for implementation
Development of KPI
Development of MRV plans
Specific Energy/Resource analysis

19. EBRD Policy Dialogue
works with governments and regulators to help establish or develop the policy and regulatory frameworks required to support renewable energy, by assisting in their development and implementation.
supported the analysis and preparation of strategic environmental plans to enable environmental standards to be set and the cumulative impacts of projects better understood and assessed.
recommending legislative, regulatory and other actions necessary to complete the implementation of the Directives
supporting relevant departments in drafting the necessary Legislation and Priority Regulations
assisting in securing inter-Ministerial approval and governmental adoption of the Legislation and Priority Regulations
assisting in embedding energy efficiency into the public procurement rule books
Policy Dialogue will assist the Ukrainian government to design an effective policy framework for climate technology transfer:
Implementation of the Eco-Design Directive (2009/125/EC);
Harmonization of Technical Regulations for:
fans (EC327/2011)
water pumps (EC 547/2012)
power transformers (EC 548/2014)
electric motors (EC 640/2009)
directional lamps, LED lamps and related equipment (EC 1194/2012)
circulators (EC 641/2009)
Embedment of energy efficiency requirements into the public procurement rule books