PRESS RELEASE
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GEF Project to Boost Urban Housing Energy Efficiency
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Part of a $722 Million Effort in Russia
Washington DC, December 3, 2010 - The CEO of the Global Environment Facility has endorsed a $9.6 million project to improve energy efficiency of houses in Russia. The initiative is part of a $722 million five year program and implemented jointly by European Bank for Reconstruction and Development EBRD and the International Finance Corporation (IFC), the private sector arm of the World Bank Group. This is the latest of six projects under an umbrella program approved by the GEF Council that also includes one project in the industrial sector, two on appliances and two more in the housing sector. The project will aim at improving energy efficiency of housing stock, addressing financial, legislative and technical issues which are the three main barriers to energy efficiency in existing, residential buildings in Russia.
“The GEF already has a strong track record in energy efficiency with over $1 billion of GEF grants that have been invested since 1991. Our efforts now will be directed toward developing and enforcing strong policies and regulations, as well as establishing sustainable financial mechanism, in order to achieve large-scale impact in terms of energy savings and Greenhouse Gas emissions reduction, in Russia as well as in other emerging and developing countries,” said Monique Barbut, CEO and Chairperson of the Global Environment Facility.
"The residential sector in Russia has huge potential not just for saving energy but for improving the living conditions for millions of Russian living in block housing constructed during the Soviet years. The EBRD is working with the federal government on reform measures and with municipal authorities, private sector developers and commercial banks to develop the appropriate instruments to finance the needed investments. The new GEF grant will play a crucial role in supporting the technical assistance programme that is driving this work. We are particularly pleased to be undertaking this project in partnership with the IFC as we recognise that challenges of this complexity and magnitude call for a high level of cooperation between the GEF agencies," said Peter Hobson, senior banker, EBRD energy efficiency and climate change team.
The financial, or market barriers will be addressed with the establishment of relevant financial mechanisms through two different types of mechanisms that complement each other: One way will be a bank financing with the GEF funds being used as guarantees for a sum of $50 million in cofinancing by the IFC. The second type of financing mechanism will be done through so called Energy Performance Contracting mechanisms, where GEF funds are used to capitalize a dedicated fund which is being topped up with $84 million in cofinancing by EBRD. The five year project will facilitate at least $134 million of investments into energy efficient renovations of residential multi-family buildings.
To address legislative and regulatory barriers, secondary legislation will be developed on energy performance certification, building maintenance, and facilitation of access to credit by homeowner associations.
Technical or awareness barriers will be tackled through a specific work with five municipalities on sustainable energy planning, training of energy services providers and municipal staff, and a public awareness campaign on energy efficiency.
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Background:
This project is part of the umbrella “Russia Energy Efficiency Programme “ – a partnership of UNDP, EBRD and UNIDO involving key Russian federal sectoral agencies and regional authorities - of $55 million that was approved under the 4 th replenishment cycle of the GEF, with a record $667 million in cofinancing. This program includes:
- One project on industrial energy efficiency : “Improving Energy Efficiency in GHG-Intensive Industries (implemented by EBRD and UNIDO, supported by the GEF with $15.4 million, and $307.6 million in cofinancing)
- Two projects on appliances (lighting / other appliances): “Introducing Energy Efficiency Standards and Labeling” (a project implemented by UNDP and supported by the GEF with $7.8 million, and $57.4 million in cofinancing) and “Transforming Markets for Energy Efficient Lighting” (also implemented by UNDP and supported by the GEF with $7 million, and $65.7 million in cofinancing).
- Three projects on buildings : one project on enforcement of building codes in new buildings at the regional level – “Improving Energy Efficiency in Buildings in Northwest Russia” (implemented by UNDP and supported by the GEF with $5.8 million, and $27.5 million in cofinancing) ; one project on financial mechanisms (ESCO) to improve the performance of existing municipal buildings (implemented by EBRD and supported by the GEF with $9.2 million, and $68.6 million in cofinancing); and one project – the one detailed above - on financial mechanisms to improve the performance of existing residential buildings - “Improving Energy Efficiency in Urban Housing” (implemented jointly by EBRD and IFC and supported by the GEF with $9.6 million, and $140 million in cofinancing).
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Media contact: Christian Hofer, Senior Communications Officer, GEF, chofer@thegef.org , +1 202 413 4185
About the Global Environment Facility
The Global Environment Facility (GEF) unites 182 member governments — in partnership with international institutions, nongovernmental organizations, and the private sector — to address global environmental issues. An independently operating financial organization, the GEF provides grants to developing countries and countries with economies in transition for projects related to biodiversity, climate change, international waters, land degradation, the ozone layer, and persistent organic pollutants. These projects benefit the global environment, linking local, national, and global environmental challenges and promoting sustainable livelihoods.
Established in 1991, the GEF is today the largest public funder of projects to improve the global environment. The GEF has allocated $9.2 billion, supplemented by more than $40 billion in cofinancing, for more than 2,700 projects in more than 165 developing countries and countries with economies in transition. Through its Small Grants Programme (SGP), the GEF has also made more than 12,000 small grants directly to nongovernmental and community organizations, totaling $495 million.
For more information: www.thegef.org
About the European Bank for Reconstruction and Development
The European Bank for Reconstruction and Development (EBRD) invests in 29 countries from central Europe to central Asia to support the development of market economies and democracies. Its operational priorities include sustainability, energy efficiency and low carbon investments. Since its establishment in 1991 the Bank has become the largest financial investor in its region of operations.
For more information: www.ebrd.com