Capacity Building for GHG Emissions
Reduction through Energy Efficiency in
Romania
UNDP/GEF's
Energy Efficiency Financing Team
Converting energy efficiency ideas into real
investment projects throughout Romania
“Implementation of the European Environmental Directives: Problems and Solutions”
September 29th 2004
Mark Velody
Project Manager
Tel. 021 231 2008
UNOPS Project Office
Str. Washington nr.45
Bucuresti, Romania
[email protected]
www.energie.undp.ro
Capacity Building for GHG Emissions
Reduction through Energy Efficiency in
Romania
I will introduce three themes today…
Capacity Building for GHG Emissions
Reduction through Energy Efficiency in
Romania
I will introduce three themes today…
1. Why a capacity building project for Energy Efficiency
Financing?
Capacity Building for GHG Emissions
Reduction through Energy Efficiency in
Romania
I will introduce three themes today…
1. Why a capacity building project for Energy Efficiency
Financing?
2. UNDP/GEF’s Energy Efficiency Financing
Team – who we are and what we do
Capacity Building for GHG Emissions
Reduction through Energy Efficiency in
Romania
I will introduce three themes today…
1. Why a capacity building project for Energy Efficiency
Financing?
2. UNDP/GEF’s Energy Efficiency Financing
Team – who we are and what we do
3. How you can do something for the
environment!
Capacity Building for GHG Emissions
Reduction through Energy Efficiency in
Romania
So let’s begin…
1. Why a capacity building project for Energy Efficiency
Financing?
Capacity Building for GHG Emissions
Reduction through Energy Efficiency in
Romania
There are environmental, economic and
social reasons to improve energy efficiency

Environmental
- the Energy Sector is the largest contributor to
greenhouse gases and global warming
 Economic
- energy intensity inhibits economic development
 Social
- less waste, warmer people etc
Capacity Building for GHG Emissions
Reduction through Energy Efficiency in
Romania
So… a UNDP/GEF project has been set up to
leverage financing for energy efficiency
projects
Objectives are strictly environmental...
- GHG reduction
 …but activities strictly commercial
- identify potentially ‘bankable’ EE/renewable projects
- help persuade a bank/financer to fund the project
- carry out studies to support the loan/investment
Capacity Building for GHG Emissions
Reduction through Energy Efficiency in
Romania
Why Energy Efficiency above renewables?

Romania has created a strong economic incentive
to invest in energy efficiency
- energy prices are higher, so Romanians are now
open to the idea of investing to lower bills
 Romania has not (yet) created a strong economic
incentive to invest in renewable energy
- it difficult to get renewable investments to ‘fly’
- so there are few ‘bankable’ proposals at present
Capacity Building for GHG Emissions
Reduction through Energy Efficiency in
Romania
Why is there a need to focus on Financing?

Banks
– do not recognise EE as an investment opportunity
 Third party financiers
– few ‘ESCOs’, little local experience of this model
 Private sector investors
– want to lower energy bills – but do not know how
 Public sector investors
– shy away from commercial financing
Capacity Building for GHG Emissions
Reduction through Energy Efficiency in
Romania
I will introduce three themes today…
1. Why a capacity building project for Energy Efficiency
Financing?
2. UNDP/GEF’s Energy Efficiency Financing
Team – who we are and what we do
Capacity Building for GHG Emissions
Reduction through Energy Efficiency in
Romania
Project partners are ARCE, UNDP and GEF

Romanian Agency for Energy Conservation (ARCE)
- Who represent the Government of Romania
 United Nations Development Programme (UNDP)
- Who are carrying out the project through the United
Nations Office for Project Services (UNOPS)
 Global Environment Facility (GEF)
- Who have provided $2 million in co-financing
Capacity Building for GHG Emissions
Reduction through Energy Efficiency in
Romania
Our strategy is to lower GHG emissions by:

Turning energy efficiency ideas into financed
projects
- Using small amounts of grant financing…
- …to leverage large amounts of commercial financing
 Pass on expertise in how to do this as widely as
possible
- To our beneficiaries, partners, consultants, staff and
other stakeholders
Capacity Building for GHG Emissions
Reduction through Energy Efficiency in
Romania
Our beneficiaries (so far) include both
public and private sector investors
 Municipalities: Alba Iulia, Campulung
Moldovenesc, Cluj-Napoca, Gheorghieni, Iasi,
Miercurea Ciuc, Orastie, Radauti, Satu Mare,
Sighisoara, Suceava, Vaslui, Vatra Dornei,Victoria,
Targu Jiu, Tarnaveni and Topoloveni.
 Companies: Ambro, Ardealu Carei,
Electroaparataj, Goscom Miercurea Ciuc, Infotim
Timisoara, Iridex, Isovolta, Ulerom, Vrancart
Capacity Building for GHG Emissions
Reduction through Energy Efficiency in
Romania
… and we work with a wide range of
other stakeholders
ARCE – and its branches throughout Romania
 Consultants, who include (so far) ASA
Holding, EnergoBit, Forenerg, ICPT Instalati, SC
Proiect, Trapec, Wayda si Wayda
 The financial community – banks, special funds
such as FREE and RIIEC, the loan guarantee
community, suppliers who offer supplier credit.

Capacity Building for GHG Emissions
Reduction through Energy Efficiency in
Romania
… to support many different types
of energy efficiency investment
projects
Building rehabilitation
Schools
Hospitals
Heating and cooling
District heating
CHP
Lighting
Capacity Building for GHG Emissions
Reduction through Energy Efficiency in
Romania
This is what we do…

Identify possible energy efficiency investments
 Assess if three key success factors are present:
- Technically realistic proposals (or ideas)
- by solvent/creditworthy project developers
- with determination (will) to carry out the project
 Help to identify commercial financing sources
 Enter into a tri-partite Agreement-in-Principle
 Prepare studies to support the investment
Capacity Building for GHG Emissions
Reduction through Energy Efficiency in
Romania
The ‘Agreement-in-Principle’ is a key
step...
If UNDP/GEF funds a Feasibility Study
(and if the results of the study are positive)
Then Financier will make investment funds available;
Project Developer will carry out the EE project
Capacity Building for GHG Emissions
Reduction through Energy Efficiency in
Romania
Based on Agreements-in-Principle,
we can provide two basic services

Technical Assistance* - our main service
- Typically, grant-funded feasibility studies
 Direct Contributions** – selected projects only
- Grants of up to 20% of an investment…
- If financing is in place for the other 80%
* Technical Assistance is available for both Private Sector and Public Sector applicants
** Direct Contributions may be awarded to for Public Sector projects only, up to a limit of $50,000 per project. Funds are awarded
only to the best projects – as defined by an evaluation committee using criteria published at www.energie.undp.ro.
Capacity Building for GHG Emissions
Reduction through Energy Efficiency in
Romania
We can also advise on sources of
commercial financing…
Bank loans
Special funds and equity funds
Guarantees and other financial instruments
Suppliers credit
Third-party financing/ESCO facilities
(We have a full-time banker on our team)
Capacity Building for GHG Emissions
Reduction through Energy Efficiency in
Romania
… including financing from our
‘sister’ GEF project – the ‘FREE’
UNDP/GEF
(‘our project’)
Romanian Energy
Efficiency Fund
(our ‘sister’ project)
Capacity Building for GHG Emissions
Reduction through Energy Efficiency in
Romania
Work is carried out by a core team







Mark Velody – Project Manager
Laura Radulescu – Outreach Manager
Bogdan Angheluta – Energy Efficiency Manager
Stefania Racolta – Head of Banking Relations
Ciprian Ghetau – Project Finance Manager
Roxana Schiopu – Office Manager
Emilian Popescu – Driver/Administrator
… supported by lots of consultants
Capacity Building for GHG Emissions
Reduction through Energy Efficiency in
Romania
And we are proving that the model works!
No. of applications/ideas evaluated – 172
No. of Agreements-in-Principle signed – 30
No. of external studies launched – 16
No. of studies by in-house team – 4
The first few projects are now implementation, and
studies under-way so far are should lead to energy
efficiency investments of at least $4 – 7 million
Capacity Building for GHG Emissions
Reduction through Energy Efficiency in
Romania
I will introduce three themes today…
1. Why a capacity building project for Energy Efficiency
Financing?
2. UNDP/GEF’s Energy Efficiency Financing
Team – who we are and what we do
3. How you can do something for the
environment!
Capacity Building for GHG Emissions
Reduction through Energy Efficiency in
Romania
How YOU can make a real and rapid
contribution to the environment

Identify potential UNDP/GEF beneficiaries
- energy consumers who think their bills are too high
- from the private sector or the public sector
 Tell them about UNDP/GEF
- and suggest that they contact us for assistance
We will do all we can to turn their ideas into real
energy efficiency projects!
Capacity Building for GHG Emissions
Reduction through Energy Efficiency in
Romania
Recap – what we do…

Identify possible energy efficiency investments
 Assess if three key success factors are present:
- Technically realistic proposals (or ideas)
- by solvent/creditworthy project developers
- with determination (will) to carry out the project
 Help to identify commercial financing sources
 Enter into a tri-partite Agreement-in-Principle
 Prepare studies to support the investment
Capacity Building for GHG Emissions
Reduction through Energy Efficiency in
Romania
So we are looking for…

Identify possible energy efficiency investments
 Assess if three key success factors are present:
- Technically realistic proposals (or ideas)
- by solvent/creditworthy project developers
- with determination (will) to carry out the project
 Help to identify commercial financing sources
 Enter into a tri-partite Agreement-in-Principle
 Prepare studies to support the investment
Capacity Building for GHG Emissions
Reduction through Energy Efficiency in
Romania
So we are looking for…

Identify possible energy efficiency investments
 Assess if three key success factors are present:
- Technically realistic proposals (or ideas)
- by solvent/creditworthy project developers
- with determination (will) to carry out the project
 Help to identify commercial financing sources
 Enter into a tri-partite Agreement-in-Principle
 Prepare studies to support the investment
Capacity Building for GHG Emissions
Reduction through Energy Efficiency in
Romania
So we are looking for…

Identify possible energy efficiency investments
 Assess if three key success factors are present:
- Technically realistic proposals (or ideas)
- by solvent/creditworthy project developers
- with determination (will) to carry out the project
 Help to identify commercial financing sources
 Enter into a tri-partite Agreement-in-Principle
 Prepare studies to support the investment
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania
So… please direct potential beneficiaries to:
www.energie.undp.ro
Or phone 231 2008, or talk to me today
Capacity Building for GHG Emissions Reduction
through Energy Efficiency in Romania
UNDP/GEF's
Energy Efficiency Financing Team
Converting energy efficiency ideas into real
investment projects throughout Romania
“Implementation of the European Environmental Directives: Problems and Solutions”
September 29th 2004
Mark Velody
Project Manager
Tel. 021 231 2008
UNOPS Project Office
Str. Washington nr.45
Bucuresti, Romania
[email protected]
www.energie.undp.ro