With four years of successful implementation and more than 9,000 households that have improved their energy efficiency, the Western Balkans Green Economy Financing Facility (WB GEFF) programme demonstrates that people in the region, supported by the European Bank for Reconstruction and Development (EBRD) and partner organizations, have taken an important step towards decarbonizing and greening the residential sector. This provides a strong impetus for further efforts to implement the Green Agenda for the Western Balkans.
The success of the WB GEFF programme in realizing this pioneering regional initiative of the EBRD, its partners, and citizens clearly demonstrates that decarbonization, a green economy, and sustainable energy are indeed the right development course, even in regions, such as the Western Balkans, which lag far behind the European Union (EU) by economic power.
To understand the success of this programme, we spoke to Violeta Kogalniceanu, Head of Infrastructure and Energy Efficiency at the Energy Community Secretariat, Aleksandra Vukosavljević, Director of Financial Institutions for the Western Balkans and Eastern Europe at the EBRD, and Richard Masa, Head of the Western Balkans Investment Framework Sector at the European Commission. These three institutions have been involved in the WB GEFF programme from the very beginning. Having worked together on designing the initiative, they are now sharing the lessons learned and planning further steps.
Energy efficiency is a hard nut to crack
“Residential energy efficiency is a hard nut to crack even in the EU, and more so in the Western Balkans,” said Violeta Kogalniceanu, Head of Infrastructure and Energy Efficiency at the Energy Community Secretariat.
Talking about the achievements of the GEFF financing facility in the past four years, she stressed that residential energy efficiency has a crucial role to play in the transition to green economies in the region, but that its success will require the support of all stakeholders – citizens, governments, financial institutions, as well as donors.
“Greening the residential sector in the Western Balkans has significant importance for us,” said Aleksandra Vukosavljević, Director of Financial Institutions for the Western Balkans and Eastern Europe at the EBRD.
She highlighted that the success in decarbonizing the residential sector through WB GEFF comes as a result of four years of work.
The first apartment building renovated within the GEFF Western Balkans is located in Sarajevo – the building’s energy use has been reduced by 45%
Translated into numbers, the programme has seen EUR 45 million invested in energy-efficient technologies in over 9,000 households across the region, allowing them to cut energy consumption and bills, improve the quality of life, and reduce their environmental impact, according to her.
Vukosavljević also noted that by applying energy-efficient technologies, the households have reduced CO2 emissions by more than 12,000 tonnes per year, which is equivalent to removing 7,700 cars from the street.
It’s important to keep people informed and educated
Before the WB GEFF programme was launched in 2017, energy efficiency in the Western Balkans was mainly discussed as part of development projects that focused on the adoption of regulations and education of decision-makers. Citizens were not thinking about energy efficiency very much, or they were simply waiting for established practices from developed Western Europe to become available, but also financially accessible, in the region as well.
“Today citizens are definitely much more aware of the possibilities for improving energy efficiency than was the case before,” says Kogalniceanu. This is clear to us when we see more and more partner banks joining the GEFF programme, as well as constant increases in the number of clients that utilize the financing facility.
One of the key factors contributing to the popularity of WB GEFF throughout the region is a financial incentive covering 20% of the cost of equipment and materials purchased for renovation projects. The EU has so far provided EUR 8 million in grants to households to invest in green technologies, with a further EUR 19 million still available.
As much as the financial incentive is important, and as much as it has contributed to the success of the programme, Kogalniceanu said, it is the full package that WB GEFF is offering (technical assistance for project preparation, policy dialogue, awareness-raising, help in choosing equipment and materials through the Technology Selector) that has made it possible for the programme to reach those for whom it is intended.
Partnerships and synergies for a successful outcome
The WB GEFF programme is based on partnerships and synergies between participating organizations. Vukosavljević explained that partnerships are at the heart of how the EBRD operates, adding that that today, more than ever, effective coordination across all actors in the development finance system is particularly important for providing strong support to a green recovery from the COVID-19 pandemic.
Dušan Stojković, a homeowner from Serbia, has invested in thermal insulation, PVC window,s and doors to keep his home warm during winters and cut energy bills
Kogalniceanu also talked about partnerships on the programme. “When the Secretariat, and myself, through the energy efficiency coordination group, helped the EBRD in the early stage of the programme development to conduct a market study to assess the region’s potential and investment needs,” she recalls, “it was a very important task for us. The GEFF is an investment programme that serves to enhance the environment for advancing energy efficiency, and the Secretariat has provided legal and regulatory support. So, we are mutually supporting each other,” she said.
WB GEFF was designed and implemented in close partnership with the EU, which provides incentive grants for borrowers, the Government of Austria, which supports the programme by providing funding for technical assistance, as well as other bilateral donors of the Western Balkans Investment Framework who also support the programme.
The EBRD is working closely with the Energy Community on the GEFF programme as well as other initiatives as part of the Regional Energy Efficiency Programme (REEP).
In addition, the bank has established cooperation with about 20 local banks, as well as over 4,000 producers and sellers of energy-efficient technologies, equipment, and materials from across the region. They are all available in the GEFF Technology Selector, and the requirement to be added to the database is meeting the performance standards set by the EBRD.
Perhaps the best description of the bank’s role in this programme is provided by Kogalniceanu, who says that the EBRD supports the local banks, vendors, and clients, as a “silent partner,” and that this support is not always visible, but nevertheless makes a positive difference.
WB GEFF provides crucial support to the region’s decarbonization and Green Agenda
Summing up the role of the EU in this programme, Richard Masa, Head of the Western Balkans Investment Framework Sector at the European Commission, cited a speech by European Commission President Ursula Von der Leyen at the Berlin summit in July when she recalled that the Western Balkans is joining a union that is changing, and should therefore be included in EU initiatives upstream, notably in the Green Deal through the Green Agenda for the Western Balkans.
He recalled that it is in the EU’s interest that its closest neighbours as future member states do catch up the train of the green transition in time, adding that this is all the more valid in the current post-pandemic context where building resilience and future-proof recovery are crucial.
Masa noted that two things are critical for mainstreaming the Green Agenda for the Western Balkans: that the region embraces change and that all relevant stakeholders comprehend that it is in their interest to turn sustainability and resilience challenges into opportunities through the Green Agenda.
He said it is necessary to start the implementation as soon as possible, and that the Regional Cooperation Council (RCC) is already working on this with the support of the European Commission’s Directorate-General for Neighbourhood and Enlargement Negotiations (DG NEAR).
Given that WB GEFF continues, with a total of EUR 135 million in funding secured, our interlocutors expect that the programme, on the back of its success so far, will provide significant support to the implementation of the Green Agenda for the Western Balkans.