REECL (Bulgaria) Residential Energy Efficiency FW (ext.)

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Translated version of this PSD: Bulgarian The EBRD is considering an extension of the Residential Energy Efficiency Credit Line (REECL) Framework initially launched on the Bulgarian market in 2005. Under the facility the EBRD would extend credit lines to Participating Banks (PB) for on-lending to the retail sector for residential energy efficiency projects. Sub-borrowers could be one of the following groups who intend to perform eligible sub-projects on their own or occupying buildings: EBRD funds of up to EUR 40 million would be complemented by the Kozloduy International Decommissioning and Support Fund (KIDSF) grant funding (the Grant). The contributors to the KIDSF are the European Commission, Austria, Belgium, Denmark, France, Greece, Ireland, Netherlands, Spain, Switzerland and UK. The Project is being prepared in co-operation with the Ministry of Economy, Energy, and Tourism of Bulgaria. The Grant amounting to EUR 14.6 million will be used to provide: (i) completion fees to sub-borrowers; (ii) technical cooperation aimed at preparation, administration and verification of the sub-projects (see below “technical cooperation”); and (ii) first loss scheme available to the PBs for comprehensive building refurbishment projects. The original REECL established in 2005 was the first scheme to systematically address energy wastage on a household level, using the retail lending market to finance efficiency improvements and structuring the supply side with strict criteria for energy efficiency equipment. The new facility will build on the success of the original framework, continuing the good work that has been achieved with PBs and will especially target areas that remain underdeveloped, i.e. more complex refurbishment of larger dwellings as well as housing associations that have just received legal status. The transition impact of the Project extension stems from the followings sources: The clients will be Bulgarian PBs which will on-lend the funds to individuals, households, group of inviduals or associations of apparment owners planning to undertake energy efficiency investments in the residential sector. Senior loans of up to an aggregate of EUR 40 million to be allocated to PBs in Bulgaria. EUR 40 million from EBRD and EUR 14.6 million from KIDSF. FI screened project. PBs will be required to comply with the Bank’s Performance Requirements for FI (specifically PR2: Labour and Working Conditions and PR9: Financial Intermediaries). A verification process relying on an independent expert (Project Consultant) will ensure that only the selected equipment or measures will qualify for incentives. Increased energy savings deriving from implementation of eligible measures will improve efficiency in the use of heat and energy and lead to a reduction of air pollutants (e.g., SO2; NOx; CO2; particulates) resulting from heat and electricity generation. This is a clear and quantifiable environmental benefit on which the PBs will provide details in an annual environmental report to the Bank. The TC component is essential to the Project and ensuring that eligible projects are pursued and satisfactorily completed, and only in such case the incentives are paid. Similar to the original REECL, the Project Consultant’s assignment is to ensure the successful implementation of the Project by providing technical, administration and marketing services that will: ensure that grant funding is applied consistently in line with the eligibility criteria and that this is supported with an appropriate level of validation, to avoid any misuse of the loan proceeds and grant. The Project Consultants will have an enhanced role in terms of the building-level projects under this extension such as: Galina Shterionova, Principal Banker, Financial Institutions Team EBRD 17, Moskovska Str. Sofia, Bulgaria Tel. +359 (0) 2 9123 414 Fax: +359 (0) 2 9123 441 E-mail: shteriog@EBRD.com Alexandar Hadzhiivanov, Principal Manager, Energy Efficiency and Climate Change Team EBRD One Exchange Square London EC2A 2JN Tel. +44 (0)20 7338 7605 Fax: +44 (0)20 7338 6942 E-mail: hadzhiia@EBRD.com