A financing facility to promote investment in energy efficiency technologies in Armenia, Azerbaijan and Georgia has helped small-scale energy efficiency projects to save money and reduce emissions. This has been achieved by establishing credit lines with local banks and providing technical, financial and legal expertise.
Why is there a need for this facility?
While small and medium-sized enterprises (SMEs) in the EU’s Eastern Partnership region have the potential to create jobs and drive economic growth, they face a number of challenges. A particular difficulty is limited access to finance. The Energy Finance Facility aimed to break down these barriers by providing finance, as well as support and training. In doing so it has made it easier for local banks to finance small-scale energy saving projects in three countries of the Caucasus.
How has it helped?
The facility has made financing for sustainable energy projects available in two key areas: energy efficiency and small-scale renewable energy. Local financial institutions lend the funds, which they received from the European Bank of Reconstruction and Development (EBRD).
Crucially, the Facility provides credit lines and grant support to SMEs, agribusinesses, and residential and commercial service, making sustainable energy investments highly attractive. For example, stakeholders that implement energy efficiency projects receive 10% or 15% of the loan amount as a cash back Investment Incentive Payment to reduce the cost of the investment.
Actions in brief
Who stands to benefit?
Local SMEs and homeowners have benefited from easier access to credit to carry out small renewable energy investments in equipment, systems and processes that utilise renewable energy resources for the generation of electricity, heat, cooling and any other form of energy replacing fossil fuel resources. A typical example has been the installation of solar thermal collectors for hot water or steam generation. There has also been a major focus on providing rural areas with access to funds for energy efficiency projects.
Small-scale energy efficiency measures like these have led to reduced energy costs for businesses and homeowners alike. Encouraging investment in energy efficiency and renewable energy also supports local engineers in improving their technical expertise and ability to carry out such projects in the future.
"We’ve made our home more comfortable – it’s warmer and most importantly it’s more economical. With the money we are saving, we can afford a bit more entertainment, and we can buy things we couldn’t afford before”