The European Bank for Reconstruction and Development (EBRD) is launching an EUR100m Green Economy Financing Facility (GEFF) for the country to support Romanian households to save energy and money.
The framework is designed to help Romanian households invest in energy efficiency, renewable energy and water-saving solutions. It is the first time that the EBRD is financing energy efficiency in Romania’s residential sector. Loans will be provided via local partner banks. “Most of Romania’s residential buildings were constructed between 1960 and 1990 with low thermal insulation,” Matteo Patrone, EBRD regional director for Romania and Bulgaria, said.
“While energy efficiency improvements are urgently needed, access to finance for such investments remains limited. We are happy to offer a new financing product that addresses this issue and look forward to Romanian banks joining the effort,” Patrone added. With the EBRD’s support, Romanian banks are expected to develop green-economy products that will suit their customers’ needs.
Borrowers may be individuals, groups of individuals, housing associations or companies providing green energy products and services. They will be able to choose off-the-shelf green solutions and receive free technical advice on customized low-energy solutions for complex investments.
Banca Transilvania is the first local lender to join the framework and has received a EUR40m loan for on-lending to households, housing associations and service providers for energy-saving investments. The TaiwanICDF, which is in charge of Taipei China’s overseas development program, has contributed USD12m to the loan.
The framework is designed to help Romanian households invest in energy efficiency, renewable energy and water-saving solutions. It is the first time that the EBRD is financing energy efficiency in Romania’s residential sector. Loans will be provided via local partner banks.
“In cooperation with the EBRD, we are very happy to help finance Romanian households to invest in green technologies and make their homes more energy efficient and comfortable. We recognize that a great number of small investments make a large contribution to the global effort to curtail CO2 emissions. In line with TaiwanICDF’s vision of partnership for progress, we will continue to work with our partners such as the EBRD to bring about sustainable development.” Larry R. L. Tseng, the Taipei Representative Office in Bratislava, on behalf of the TaiwanICDF, said.
GEFF builds on the success of the EBRD’s previous energy efficiency financing programs in Romania which enabled municipalities, large industries and small and medium-sized enterprises to finance over 470 energy efficiency and renewable energy investments with a combined value of close to EUR190m.
In total, the bank has channeled EUR4bn into green financing through similar programs in 24 countries.
GEFF is part of the EBRD’s Green Economy Transition approach, under which the bank aims to dedicate 40 per cent of its annual investments to climate finance by 2020, compared with an average of around 25 per cent in the previous five years.
Building on past investment
In May the EBRD lent EUR40m to Banca Transilvania for sub-borrowers such as households, housing associations and service providers for energy-saving investments. The financing is part of the EBRD’s newly launched Green Economy Financing Facility (GEFF) for Romania, a program with a volume of up to EUR100m to finance green investments in Romania. The framework will initially comprise EUR50m from the EBRD’s own funds, while the TaiwanICDF, which is in charge of Taipei China’s overseas development program, has committed USD20m to date.
It is the first EBRD co-financing with the TaiwanICDF in Romania and part of the Bank’s efforts to attract new institutional investors to the country. The facility is also complemented by grant-based funding made available by the Global Environment Facility and the EBRD Shareholder Special Fund to provide technical advice and support to lenders and sub-borrowers.
According to EBRD, Romania remains one of the most energy-intensive EU countries. Its residential sector accounts for 36 per cent of the country’s final consumption, the highest among all sectors, while the EU average is 24 per cent.