Central and Eastern Europe

Energy Audits Program (EAP)

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Program Type:
Asset-based lending
Technical assistance
Program Type - Description:

Technical assistance facility to support conduct of energy audits

 

Target Group

Cross Sectoral
Year:
2002
Ongoing:
Yes
Status:
In operation
Sponsoring Entity:
European Bank for Reconstruction and Development (EBRD)
European Bank for Reconstruction and Development (EBRD), funding support from the Central European Trust Initiative (CRI) Trust Fund as well as other donors.
Counterpart Entity:
Consultants
Implementing Entity:
European Bank for Reconstruction and Development (EBRD)
Objective:

In 2002 EBRD initiated a pilot Technical Assistance Program designed to provide its clients with dedicated international expertise to help them implement energy efficiency through energy audits and targeted training.

Energy Efficiency / GHG Goals:
No targets specified.
Barriers Addressed:

The EBRD region is characterized by high energy intensity (2-5 times more than the EU average and a host of other challenges to the implementation of EE projects. The EBRD Energy Audits program endeavors to address some of the front-end challenges in the EE sector, including:

  • Integration of EE financing into bank mainstream lending activities.
  • The lack of awareness of the benefits of energy      saving by investment industrial/commercial decision-makers.
  • Small size of EE projects relative to other lending.
  • A lack of data on internal energy usage and operational parameters of systems and processes.

High EE lending transaction costs.

Financing Mechanism:

Energy Efficiency Audits Frameworks are carried out as Technical Cooperation (TC) assignments. TC projects provide the backbone for large capital investment projects, allowing for the dissemination of capital and knowledge in the region.

The TC is offered in the form of a grant-type assistance to support project preparation activities e.g., pre-feasibility studies, feasibility studies, pre-loan audits, environmental engineering etc (see below).

Eligibility Criteria:

Industrial facilities with loan applications pending at EBRD. Explicit criteria for approval of underlying loan principally, creditworthiness of customer. Terms of EE financing same as those of underlying loan without additional collateral.  Potential for project replicability also an important consideration. EE projects allocated ratings based on EE potential – projects with greatest EE potential prioritized.

Major Activities:

TCs are typically aimed at the following project preparatory activities:

  1. Pre-feasibility studies
  2. Feasibility studies
  3. Sector / environmental engineering
  4. Management training / capacity building programs
  5. Pre-loan audits

In particular, Energy Audits, which are the core activity of the program, typically encompass the following activities:

  1. Energy efficiency audit
  2. Prioritization of EE investment plan
  3. Energy management assessment

Local involvement and management (capacity building)

Key Results:

Between 2004 and 2009 the CEI funded Energy Audits Program identified EUR 201 million of potential investments that would lead to total energy savings of 15.4 million GJ/year and abatement of 1.3 mt CO2/year. 

EBRD reported the aggregate impact of 4.7 mt CO2/year reduction in GHG emissions from 29 significant energy efficiency projects (including EE with capacity expansion and RE/EE funds and credit lines) committed to in 2011.

Lessons Learned:
  1. High return from EE Audits: For relatively low capital outlay (TC assignments), EBRD is able to identify and prioritise potential EE opportunities among clients and direct investment to those opportunities that will realize the highest return; program average 50:1 EE investment to program expenditures.
  2. Independence of EE Auditor: This is critical to have an external and impartial result and to achieve buy-in from local management.  EBRD or International expert paired with local technical firms.
  3. Challenges with reliable data collection: The lack of accurate / reliable data on some facilities leads to challenges in estimating actual energy usage during energy audits and, therefore, in estimating the capital expenditure and potential savings. Sensitivity analysis is necessary to assess potential risks in this regard.
  4. Developing country challenges: Often in developing countries modern state-of-the-art equipment is installed side-by-side with obsolete equipment impacting the efficiency and productivity of production process, which is determined by the least reliable process component. This may require the EE auditor to step  outside the strict boundaries of an EE audit and take a holistic perspective of the production process and opportunities for productivity improvement.
  5. Capacity building: Capacity building / training of local management and service firms is critical to enable local management (i) to assist in identifying EE opportunities, (ii) to achieve buy-in from local management for the EE imitative and (iii) to ensure management capacity to implement EE initiative and operate and maintain EE installations to realize anticipated energy savings. Hence, energy management training for participating companies has been added to project-oriented EE assessment.
Contact:

Energy Efficiency and Climate Change, EBRD
One Exchange Square
London EC2A 2JN
United Kingdom
Tel: +44 20 7338 6000
Fax: +44 20 7338 6100

Other Comments:
The EBRD program is regarded as best practice among EE audit programs and is presently being emulated by other agencies (as well as private sector entities) in other markets. The Energy Audits initiative was a precursor to subsequent Sustainable Energy Finance Facilities (SEFFs) implemented by EBRD in Eastern Europe and former Soviet Union (FSU) countries under the EBRD Sustainable Finance Imitative, which provided for embedded technical assistance, including energy audits.