Capacity Building for GHG Emissions Reduction through Energy Efficiency in Romania

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_at_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

• I will introduce three themes today
• 1. Why a capacity building project for Energy
  Efficiency Financing?

4
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania

• I will introduce three themes today
• 1. Why a capacity building project for Energy
  Efficiency Financing?
• 2. UNDP/GEFs Energy Efficiency Financing
  Team who we are and what we do

5
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania

• I will introduce three themes today
• 1. Why a capacity building project for Energy
  Efficiency Financing?
• 2. UNDP/GEFs Energy Efficiency Financing
  Team who we are and what we do
• 3. How you can do something for the
  environment!

6
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania

• So lets 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
• Environmental
• - the Energy Sector is the largest
  contributor to
• greenhouse gases and global warming
• Economic
• - energy intensity inhibits economic
  development
• 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
• 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?
• 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
• 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?
• Banks
• do not recognise EE as an investment
  opportunity
• Third party financiers
• few ESCOs, little local experience of
  this model
• Private sector investors
• want to lower energy bills but do not
  know how
• Public sector investors
• shy away from commercial financing

11
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania

• I will introduce three themes today
• 1. Why a capacity building project for Energy
  Efficiency Financing?
• 2. UNDP/GEFs Energy Efficiency Financing
  Team who we are and what we do

12
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania

• Project partners are ARCE, UNDP and GEF
• Romanian Agency for Energy Conservation (ARCE)
• - Who represent the Government of Romania
• United Nations Development Programme (UNDP)
• - Who are carrying out the project through
  the United
• Nations Office for Project Services (UNOPS)
• 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
• Turning energy efficiency ideas into financed
• projects
• - Using small amounts of grant financing
• - to leverage large amounts of commercial
  financing
• 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
• 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.
• Companies Ambro, Ardealu Carei,
• Electroaparataj, Goscom Miercurea Ciuc,
  Infotim
• Timisoara, Iridex, Isovolta, Ulerom, Vrancart

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Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania

• and we work with a wide range of other
  stakeholders
• ARCE and its branches throughout Romania
• Consultants, who include (so far) ASA
• Holding, EnergoBit, Forenerg, ICPT
  Instalati, SC
• Proiect, Trapec, Wayda si Wayda
• The financial community banks, special funds
• such as FREE and RIIEC, the loan guarantee
• community, suppliers who offer supplier
  credit.

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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
• Identify possible energy efficiency investments
• 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
• Help to identify commercial financing sources
• Enter into a tri-partite Agreement-in-Principle
• 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
• Technical Assistance - our main service
• - Typically, grant-funded feasibility studies
• 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.
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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)

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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
• Mark Velody Project Manager
• Laura Radulescu Outreach Manager
• Bogdan Angheluta Energy Efficiency Manager
• Stefania Racolta Head of Banking Relations
• Ciprian Ghetau Project Finance Manager
• Roxana Schiopu Office Manager
• 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 projects are now under 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

• I will introduce three themes today
• 1. Why a capacity building project for Energy
  Efficiency Financing?
• 2. UNDP/GEFs Energy Efficiency Financing
  Team who we are and what we do
• 3. How you can do something for the
  environment!

25
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania

• How YOU can make a real and rapid contribution to
  the environment
• Identify potential UNDP/GEF beneficiaries
• - energy consumers who think their bills are
  too high
• - from the private sector or the public
  sector
• 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
• Identify possible energy efficiency investments
• 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
• Help to identify commercial financing sources
• Enter into a tri-partite Agreement-in-Principle
• Prepare studies to support the investment

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

• So we are looking for
• Identify possible energy efficiency investments
• 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
• Help to identify commercial financing sources
• Enter into a tri-partite Agreement-in-Principle
• Prepare studies to support the investment

28
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania

• So we are looking for
• Identify possible energy efficiency investments
• 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
• Help to identify commercial financing sources
• Enter into a tri-partite Agreement-in-Principle
• Prepare studies to support the investment

29
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania

• So we are looking for
• Identify possible energy efficiency investments
• 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
• Help to identify commercial financing sources
• Enter into a tri-partite Agreement-in-Principle
• Prepare studies to support the investment

30
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania

• So please direct potential beneficiaries to
• www.energie.undp.ro
• Or phone [phone], or talk to me today

31
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_at_undp.ro
UNOPS Project Office Str. Washington
nr.45 Bucuresti, Romania www.energie.undp.ro