A board decision is expected from the European Bank for Reconstruction and Development for senior loans for a total amount of up to EUR 60 million to financial institutions operating in Croatia, which will lend the funds to individuals or vendors for energy efficiency projects in the residential sector.
Significant challenges remain with respect to energy efficiency in Croatia, EBRD said. There is a significant potential for energy efficiency improvement in the residential sector which is among the largest energy end-users, according to a statement posted on the bank’s website. In accordance with the NEEAP (National Energy Efficiency Action Plan), 34% of the overall energy saving target for Croatia should come from the residential sector.
The facility will generate transition impact by demonstrating the benefits of energy conservation and promoting the expansion of energy efficiency lending to households. It will further demonstrate to commercial banks operating in Croatia the market potential of the sector and foster the mobilization of private sector financing, the release said.
The project will also promote the development of a market for energy efficiency technologies, appliances and equipment by stimulating demand through market awareness campaigns and the introduction of an innovative and efficient financing model for high-performance residential energy efficiency technologies.
In addition, the project is expected to transfer and build expertise and skills on several levels. Participating banks will build expertise in assessing the risks and benefits associated with small-scale investments in energy efficiency. Transfer of knowledge and technical skills will further build local expertise in appraising sustainable energy projects and applying best available technologies, EBRD said.
It is envisaged that three banks will participated in the facility. The project is supported by a technical cooperation segment of up to EUR 1.8 million. Out of EUR 1.8 million, 600,000 were allocated from Shareholder Special Fund’s budget. Three consultants will support the implementation of the facility. Two consultants have already been engaged for the project preparation phase. Another consultant will execute the implementation support including marketing and general awareness raising activities; support with pipeline development; capacity building for participating banks; support the administration, monitoring and reporting on the facility.