Energy Efficiency

Energy Community, EBRD publish policy guidelines on financing mechanisms for energy efficiency

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Published

July 27, 2020

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Published:

July 27, 2020

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The Energy Community Secretariat and the European Bank for Reconstruction and Development (EBRD) have prepared policy guidelines to help contracting parties to design and establish effective centralized financing mechanisms to boost energy efficiency investments.

According to the recently published Energy Transition Tracker, the energy-saving measures could lead to additional investments worth EUR 2.5 billion in the Western Balkans.

Under the Energy Efficiency Directive, Energy Community contracting parties need to improve energy efficiency by 20% by 2020, with new targets for 2030 to soon be adopted.

Centralised and publicly led financing mechanisms can play an important role in achieving these savings, according to the Energy Community Secretariat.

The policy guidelines aim to support the design and establishment of such mechanisms, covering design considerations such as sources of funding, types of financial instruments, allocation approaches, and good governance.

EBRD and the secretariat developed the guidelines to complement those on energy efficiency obligation schemes (published in November 2018) to support countries in their decision as to the most appropriate policy mix for achieving the required end-use energy savings.

The policy guidelines lays out the following recommendations:

  • Be clear on the scheme’s objectives and how these fit in wider national energy efficiency strategy
  • Ensure the mechanism adopted addresses the market failures identified
  • Ensure effective and transparent governance arrangements are in place
  • Consider interaction with other regulations and policy initiatives
  • Ensure sufficient technical assistance is available
  • Consider scale of scheme when defining objectives
  • Leverage regional experience and capacity
  • Keep it simple and respond to market demand
  • If involving private sector, maximise leverage potential
  • Don’t forget importance of M&V.
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