(NEEAP) in the Western Balkans

Transcription

Framework Contract Beneficiaries 2009
Request for Services No. 2011/260977
Study on Financing Mechanisms
to Implement National Energy
Efficiency Action Plans (NEEAP)
in the Western Balkans
Final Report – Executive summary
November 2011
This project is funded
by the European Union
A project implemented by
MWH
Study on Financing Mechanisms to Implement National Energy Efficiency Action Plans (NEEAP) in the Western Balkans
The content of this report is the sole responsibility of the MWH Consortium and can in no way be taken to
reflect the views of the European Union. This report is prepared solely for the use and benefit of the
Contracting Authority. It is the result of an independent review and neither the MWH Consortium nor the
authors accept or assume any responsibility or duty of care to any third party.
Team:
• Nenad Pavlovic
Team leader and Buildings expert
• Besim Islami
Transport expert
• Lejla Uzicanin
Public sector finance expert
• Dario Dilucia La Perna
Industry expert
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EXECUTIVE SUMMARY .................................................................................................................. 5
Study background and objective of the report ....................................................................................... 5
Findings in EU member States by sector .............................................................................................. 6
Buildings ......................................................................................................................................................................6
Industry ........................................................................................................................................................................7
Transport .....................................................................................................................................................................8
Innovative financing in public sector in EU MS ............................................................................................................8
All Sectors ...................................................................................................................................................................9
Environment for energy efficiency in Western Balkan countries ......................................................... 10
Legal, institutional and financial framework ...............................................................................................................10
Budgeting and procurement issues and energy efficiency ........................................................................................10
Borrowing legislation and limits .................................................................................................................................10
Ability to enter into Third Party Financing ..................................................................................................................11
Possible financial and fiscal options for Western Balkan countries ..................................................... 12
General recommendations ........................................................................................................................................12
Buildings ....................................................................................................................................................................13
Industry ......................................................................................................................................................................15
Transport ...................................................................................................................................................................16
Recommendations for implementation of selected financing options ................................................. 17
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EXECUTIVE SUMMARY
STUDY BACKGROUND AND OBJECTIVE OF THE REPORT
All Contracting Parties to the Energy Community Treaty are being supported by the Energy Community
Secretariat and its Task Force for Energy Efficiency in their efforts to transpose and implement relevant
EU Directives. Participating countries are in the process of developing and implementing National Energy
Efficiency Action Plans (NEEAPs) but many NEEAPs have been done and adopted without having appropriate and comprehensive financing schemes in place. The Energy Community Secretariat has therefore requested support from the European Commission to help the Contracting Parties identify appropriate financing mechanisms for successful NEEAPs implementation.
This report presents the findings of the study, the objective of which is to assist national governments in
the Western Balkan countries to meet their commitments under the Energy Community Treaty. Specifically, this report provides information to help them identify sustainable financing options for implementing
their NEEAPs and to create appropriate regulatory and policy frameworks to use these financing mechanisms. This report does not discuss all the financing and fiscal instruments currently applied in Member
States. Rather, it presents those mechanisms that serve as good examples of approaches used in both
Old and New Member States. Further, the goal is not to reconsider Energy Efficiency Improvement (EEI)
measures stipulated by Western Balkan countries’ NEEAPs but to identify and propose financing and fiscal measures, or necessary legal changes, that would lead to sustainable financing of their adopted
NEEAPs.
A wide range of financial and fiscal mechanisms recognized by Energy Service Directive were analysed
in both New and Old EU Member States. These instruments have been assessed to determine their applicability to Western Balkan countries giving consideration to their current legal, financial and fiscal
frameworks. Information used for this assessment includes:
• adopted NEEAPs of Western Balkan countries;
• NEEAPs of Old and New EU Member States;
• studies and reports highlighting specific issues like financing energy efficiency in buildings, industry
and transport, poverty and energy poverty in the Western Balkan region;
• relevant documents and data of funding institutions;
• fiscal policy of EU and of Western Balkan countries;
• state budgets, revenues and expenditures in Western Balkan countries;
• past and current EC support to Western Balkan countries; and
• specific documents, information and data, listed in the bibliography.
This desktop research was undertaken in close cooperation with national members of the Task Force for
Energy Efficiency. All of the countries, except Bosnia and Herzegovina (which provided partial information) and Croatia, completed a tailored questionnaire for data and information gathering highlighting specific issues for the purpose of this study.
Securing involvement and contribution of ministries responsible for finance and fiscal policy is of great
importance for this task as none of the financing or fiscal instruments can be accepted without having the
‘green light’ from these ministries. However, for such involvement it will be necessary to facilitate interministerial cooperation in all the Western Balkan countries.
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FINDINGS IN EU MEMBER STATES BY SECTOR
For the purposes of this study, NEEAPs of Old and New EU Member States were analysed, together with
other documents considering financing schemes for both financial and fiscal mechanisms in Member
States, as well as available databases and statistical evidence. It appears that a comprehensive analysis
about the supporting mechanisms applied in different energy end-use sectors in EU Member States is still
lacking. However, it can be noted that more than one hundred financing and fiscal instruments are/were
under implementation/implemented in order to achieve the targets set in NEEAPs. Applicability of successfully implemented schemes and mechanisms in the Member States has been considered taking into
account specific circumstances of the Western Balkan countries.
The list of financial and fiscal mechanisms is given in the table below, together with the typical use of income from the energy levies (taxes) on energy carrier prices.
FISCAL
Subsidies
Grants
Tax rebates
Tax deduction
VAT reduction
Carbon taxes
Loan Guarantees
Technical assistance (TA) for loan preparation
Third Party Financing (TPF)
Energy performance contracting
Trading (White/Energy Certificates)
LEVIES
Public Energy Efficiency Fund
ENERGY
FINANCIAL MECHANISMS
Preferential Loans
MECHANISMS
Revolving Funds
Finance DSM programme run by utilities
Shared investment by the utility and energy
consumers to reduce the demand
Buildings
Grants and preferential loans are the most frequently applied financing mechanisms in both Old and New
EU MS. Grants are more often applied in the New EU MS, while the use of preferential loans and grants is
almost equal in Old EU MS. In the New EU MS, as a rule, financial mechanisms for buildings relate to
typical energy efficiency implementation measures such as thermal insulation, replacement of windows, replacement of low efficiency heating systems, etc. Unlike the New EU MS, Old EU MS are focused more on
meeting high energy efficiency performance during retrofit of buildings, construction, upgrading to low energy houses than on the use of renewable energies for sanitary hot water preparation and space heating.
Financial mechanisms in the New EU MS are not tailored to low income households in spite of the higher
percentage share of this population group compared to the Old EU MS. Buildings are usually divided into
three groups: households, public and commercial service buildings. Due to the lack of statistical evidence,
the New EU MS treat public and commercial buildings as one group denoted the tertiary sector. Very often financing mechanisms are applied to more than one building group, and even for more than one energy end-use sector.
Old EU MS very often provide grants to households as a defined maximum percentage share of total investment and a specified maximum amount per household. Old EU MS frequently combine energy efficiency financing with environmental protection investments and also, very often combine financing with
fiscal mechanisms.
Fiscal mechanisms are often applied in Old EU Member States. According to available information at
least 14 fiscal mechanisms are applied. Tax rebate and Tax deduction are used twice as often as VAT
reduction. Fiscal mechanisms are frequently combined with financing mechanisms, sometimes in very
comprehensive schemes. However, it appears that no fiscal mechanisms are applied in the New EU MS.
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Industry
Financial and fiscal schemes are the most widely adopted instrument in the industry sector in both Old
and New EU MS. They support energy audits and implementation of energy efficiency projects. The figure below shows the breakdown of instruments used in the industry sector within the Member States
(Source MURE).
Breakdown of adopted instruments in the industry sector within EU members
The sources of financing are very different between the New EU MS and the Old EU MS. The former
mostly rely on energy efficiency programmes and incentives developed by international financial institutions and sponsored by international donors. The Old EU MS rely on energy efficiency programmes, incentives and subsidies supported and financed by the state budget allocation. Credit lines are the most
common and successful type of financing scheme adopted in the New EU MS. Grants are sometimes
combined with direct loans as incentive payments. Few guarantee funds are in place in the industry sector. Financial mechanisms of New EU MS focus on large energy consumers.
Informational measures are broadly used in both Old and New EU MS, while cooperative measures
are used by some old EU MS such as the Netherlands, Sweden, Finland, France and Germany and some
new EU MS such as Estonia, Bulgaria and Slovakia.
MECHANISM
RELEVANCE
SUPPORT TO
APPLICATION
Legislative informative
Medium
Small and Medium Enterprises (SMEs)
Both Old and New EU MS
Co-operative
High
All industry sector
Both Old and New EU MS
New market-based instruments, apart from the EU ETS, have been adopted in some Old EU MS, but in
none of the New EU MS. The most common and adopted market-based instrument in old EU MS is the
trading of White Certificates. Regulatory measures are not widely used in both the New and Old EU MS.
Energy levies are applied in the industry sector only in the Old EU MS.
There are several interesting financing and fiscal mechanisms which have been successfully adopted in
the EU MS such as: Energy Centre for SMEs, Financing Mechanisms Implementation of Energy Efficiency Monitoring Systems (EEMS), Tax/VAT deduction for high efficiency electric motors and inverters
acquisition and installation, Energy tax.
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Transport
Transport was not prioritized from the beginning in energy efficiency policies, probably due to common
opinion that other energy sectors provide easier ways to intervene and achieve the targets. Approximately
20% of measures are organisational measures aimed at the development of public transport infrastructures, bicycle paths, implementation of mobility plans for companies, schools, administrations and other
institutions. Information-related measures are aimed at enhancing information awareness of the population (14%), and voluntary agreements with transport companies or vehicle manufacturers (7%). The
remaining 28% of measures belong to financing and fiscal groups. Fiscal measures relate mostly to
taxes on motor fuels and taxes linked to the efficiency/emissions of new cars. Financing measures relate
to incentives for purchasing more efficient new cars or hybrid cars.
In all the New and Old EU MS the main fiscal measures can be identified:
• purchase tax linked to energy efficiency performance;
• annual car tax linked to energy efficiency performance;
• subsidies for efficient/low emission cars or combined tax and subsidies.
Several measures are aimed at reducing the energy use of cars after they have been purchased. Most of
those measures address the behaviour of car users: reduction of the average speed, eco-driving, speed
limits, car pooling.
One of the most important drivers of the energy consumption and energy efficiency trends in the transport
sector is the price of motor fuels. Since these prices are not regulated, the main source of difference between countries comes from the level of tax. The tax is usually made up of two main components: an excise tax and the general VAT rate. Excise taxes are generally seen as a source of income for the public
budget. However, certain countries have recently increased those taxes with the clear intention of saving
fuels.
Very few countries have introduced measures to improve the energy efficiency of freight transport. On the
contrary, road charges for heavy goods vehicles are already in place in many countries.
Fiscal measures tend to be introduced at the national level, which is why a great variety of approaches
can be identified among the New EU MS. Three main categories are:
• Purchase tax linked to energy efficiency performance;
• Annual car tax linked to energy efficiency performance;
• Subsidies for efficient/low emission cars or combined tax and subsidies.
Historically, most countries set up car purchase taxes to be paid by the buyers of new cars. Those taxes are
usually linked to the type of fuel, the size of the car and the status (private versus company cars). Some
countries make these taxes dependent on the energy efficiency or CO 2 emissions.
Innovative financing in public sector in EU MS
One way of overcoming hurdles for energy efficiency investments is energy savings performance contracts, taking into consideration experience from around the world on how to bundle, finance, and implement energy efficiency measures. Energy Service Performance Contracts represent an attractive solution
to many problems that are unique to the public sector, as they involve outsourcing of a full project cycle to a
service provider, from development to financing in case of a third party financing (financing for the service
provided by the third party, e.g. bank or ESCo). There are global experiences that advise on ways to overcome some of those obstacles and a number of emerging Business Models for Energy Service Performance Contract procurement.
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All Sectors
The most common financial source for supporting energy efficiency improvement in all or selected sectors
in New EU MS was an energy efficiency fund, particularly in the beginning phases of transition of their
economies. Old EU MS, on the contrary, used other financial sources. However, in the recent past some
Old EU MS have decided to establish national energy efficiency funds as well. These are to support the
achievement of the targets in their NEEAPs.
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ENVIRONMENT FOR ENERGY EFFICIENCY IN WESTERN BALKAN COUNTRIES
An important step in assessment of applicability and drafting of recommendations was to understand the
current overall framework and operating environment in Western Balkan countries, including a number of
barriers for a sustainable implementation of their NEEAPs.
Energy Efficiency Improvement investments are closely linked to the economic ability and poverty, energy
price tariffs policies, taxation policies, availability of financial incentives, availability of favourable loans,
but also awareness, information, training, technical support and advice, technical codes and legislation.
Ability of the country for self-financing of Energy Efficiency Improvement Investments at state level depends on the budgets’ revenue and income, and expenses as well as its creditworthiness to borrow loans
from International Financial Institutions.
Legal, institutional and financial framework
Western Balkan countries are currently at different stages of transposition and implementation of the acquis. Umbrella energy laws were adopted; transposing of EU Directives on Energy Efficiency has been
completed in Croatia, while other countries are gradually transposing these Directives. The major drawbacks in all countries, except Croatia, relate to undeveloped legislation and regulation. Mainly this is because the secondary legislation to implement the major laws has not been developed.
All countries have allocated relevant ministries to be in charge of the energy sectors and to deal with energy efficiency issues. Development banks support energy efficiency projects in Croatia. Other countries
do not have development banks / funds or they are not dedicated for supporting energy efficiency investments. According to available information, energy levies are not applied and there are no identified examples of an Energy tax being applied. Environmental levies are established in Croatia and Serbia. Fiscal
measures in support of energy efficiency are not applied in Western Balkan countries.
Budgeting and procurement issues and energy efficiency
Implementation of energy efficiency programmes has been constrained, even in developed economies,
by accounting rules, rigid public sector procurement practices and limited access to budgetary or project
financing. Consequently, for facilitating implementation of the NEEAPs, it is important to consider ways to
address: bundling/pooling of public procurement; Multi-annual public accounting practices;
Budget capture (operated in the public sector by the World Bank); and savings retention – benefit sharing schemes.
Rigid public procurement processes often have been identified as an obstacle for implementation of energy efficiency projects. Some Western Balkan countries have complex public procurement processes,
which creates difficulties even for a more “traditional” public procurement. Clearly, procurement practices
vary from country to country. Therefore solutions to any obstacles must be country specific. Most of the
Western Balkan countries have realized the drawback of their public procurement laws and now are revising it in order to add energy efficiency as criterion in public procurements.
Borrowing legislation and limits
According to the Law on Public Debt (which exists in all Western Balkan Countries), there are two types
of procedures set for municipal local borrowing, differentiated on the basis of the loan maturity period:
short-term debt, and long-term debt. The annual debt service related to long-term loans should not exceed the specified limit that ranges from 10% (in Bosnia and Herzegovina) to 20% of total collected revenues for the fiscal year, preceding the issuance of the long-term debt. In some countries, the loan amount
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is defined as a percentage share of planned budget for forthcoming year, such as in Serbia (maximum
40%). The total outstanding debt, including guarantees, should not exceed 30-50% of the collected own
source revenues and general grants for the fiscal year preceding the issuance of the debt.
Almost all countries initiated changes of municipal related legislation aimed at ensuring that the municipality retains the major part of its income, whilst a smaller part goes to higher level authorities. Changes
in most of Western Balkan countries in this field are ongoing.
Ability to enter into Third Party Financing
The results of the conducted survey indicate that only Croatia, the Former Yugoslav Republic of Macedonia and Montenegro have adopted legislation that recognizes Third Party Financing, ESCo and Engineering, Procurement and Construction contracts (EPC). Only two ESCos are currently operational (one
in Croatia and one in the Former Yugoslav Republic of Macedonia). In Montenegro Energy Efficiency Law
recognizes ESCos and Engineering, Serbia will introduce Third Party Financing, ESCo and Engineering,
Procurement and Construction contracts through the Law on rational use of energy. Other countries are
also planning to revise legislation in a similar way and this process is ongoing. However, public procurement laws do not recognize at all Third Party Financing, ESCo companies and Energy Performance Contracting.
In spite of lack of legislation, a few municipal energy efficiency projects were contracted under ESCo/EPC
schemes based on direct negotiations between municipalities and ESCos. However, the disadvantage of
such approach is that such an ESCo cannot receive a loan from International Financial Institutions that
request transparency in contract awarding processes.
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POSSIBLE FINANCIAL AND FISCAL OPTIONS FOR WESTERN BALKAN COUNTRIES
The Report provides a number of recommendations that may be generally applied in all countries Recommendations are divided into two groups: (i) general recommendations and (ii) sector specific recommendations.
General recommendations
None of the identified measures used in isolation is able to diminish challenges Western Balkan countries
are facing. Only comprehensive package of awareness, information, legal, financial, fiscal and institutional measures may gradually improve the situation and bring these countries closer to modern standards in the energy efficiency field. This package of measures should include:
• State budget allocation for non-investment Energy Efficiency Improvement,
• Transposing and adopting of technical regulation and legislation,
• Capacity building at all levels,
• Awareness raising campaign,
• Permanent advice and technical information to all energy consumers,
• Conducting of energy audits of public buildings,
• Grants for energy audits of multi-apartment buildings, commercial services and industry,
• Loans from International Financial Institutions for Energy Efficiency investment in public buildings,
• Energy tax as income for the energy efficiency funds,
• National energy efficiency fund,
• Guaranteed funding support to commercial banks for favourable energy efficiency loans,
• Interest rate deduction on energy efficiency loans (preferential loans),
• Investment deduction for selected Energy Efficiency Improvement investments,
• Study on applicable fiscal mechanisms in support to Energy Efficiency Improvement investments,
• VAT reduction for selected Energy Efficiency Improvement investments in the relevant sector,
• Income tax deduction for the public
• Net profit tax rebate / deduction for all paying consumers
• Specific financing schemes for vulnerable groups (‘Pay as You Save’ mechanism),
• Study on poverty and energy service affordability,
• Grants for low cost Energy Efficiency Improvement investment for vulnerable groups,
• Specific financing scheme for households connected to district heating systems,
• Specific financing schemes for households connected to natural gas systems.
Although Energy Efficiency Funds have limited reach and market impact, they are useful for market
segments that are not targeted by commercial banks that provide credit lines for Energy Efficiency Improvement investments. Every Energy Efficiency Funds must secure initial funding and this may be a
challenge for Contracting Parties. At start-up, Energy Efficiency funds might gain financing from global
trust funds such as GEF, bilateral donors, national budget funds or national revenues from environmental
and energy taxation.
Existing Guarantee Funds may be used for supporting Energy Efficiency Improvement investments. In
some countries, Development Banks (like in Croatia) or Development Funds (like in Serbia) provide financing for different business activities including energy efficiency projects. These models can be considered by other Western Balkan countries as well.
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Imposing of energy tax (levies) is also possible. A pre-requisite is to have a fully transparent process,
based on detailed cost-benefit analysis and to make the general public and companies aware of benefits.
In this way the energy levies should act as the main financial source for a national energy efficiency fund.
Changes in providing municipal energy services should be considered. Energy price tariffs in Western
Balkan countries are in general not cost-reflective. In particular the district heating business is an energy
service that generates losses due to a misbalance between fuel prices, subject to market conditions, and
heating prices, subject to approval of local authorities. Instead of subsidizing district heating companies and
all connected consumers regardless of their ability to pay for energy services, a sustainable process would
include a number of steps by which the municipality would stop subsidizing all energy consumers connected
to district heating system and redirect investments into technical upgrading of the infrastructure.
As noted previously, unlike the Old EU MS which often use fiscal mechanisms, the New EU MS hardly
use these mechanisms. The most likely reason is their impact on state budget income. The current situation in the Contracting Parties is similar to that of the New EU MS at the beginning of the transition. For all
these reasons, it is important to understand impacts of fiscal measures before their implementation could
be recommended for the countries in the region.
Buildings
Support mechanisms to improve energy efficiency of buildings are different for public buildings, commercial buildings and households. The experience from both the Old and New EU Member States suggests
that the first target in national energy efficiency programmes may be public service sector. Taking into account mechanisms applied in EU Member States and Western Balkan countries, the following general
recommendations can be suggested:
• Financing mechanisms including preferential loans, grants, subsides and Third Party Financing;
• Fiscal mechanisms related to income tax and VAT reduction (after cost-benefit analysis);
• Financing of energy efficiency improvements of state public buildings should be organised by the government in close collaboration with local and district authorities;
• Use of external loans for energy efficiency improvement in social public buildings;
• Energy efficiency improvements of public buildings may be financed from grants available from international financial institutions for certain countries;
• Energy efficiency improvements of commercial buildings should be financed by preferential loans or
existing guarantee funds;
• Some external financing is also available in form of preferential loans combined with technical assistance for energy efficiency improvement of commercial buildings;
• Support to households should combine awareness, technical advice and information, preferential
loans, VAT reduction for certain measures, and income tax deduction;
• Voluntary agreements between stakeholders (manufacturers, housing associations, condominiums,
consumers’ associations, construction companies, etc.) in to support energy efficiency improvements.
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Recommended package for buildings include measures listed in the table below:
BUILDINGS
MECHANISM
SOURCE OF FUNDING
PRIORITY
All buildings
Voluntary agreements
Manufacturers, housing associations, condominiums, consumers’ associations, construction
companies, government, municipalities
Short to mid term
State government and municipal budget allocation;
energy auditing as prerequisite
Loans; International financial institutions, Western Balkans Investment Framework partners; bilateral agreements
Short term
Grants
International financial institutions and specific
facilities like the UN Global Environment Facility
Short term
Third Party Financing /
ESCo (EPC)
Third party
Mid term
External financing
Credit lines established by IFis through local
commercial banks
Short term
Preferential loans for investment;
Grant for energy auditing;
Local commercial banks; Loan conditions softening though guarantee fund, national Energy
Efficiency Fund, subsidies from state budget allocation
Short term
Income tax deduction
Fiscal measure
Short to mid term
ESCo (EPC)
ESCo
Mid-term
Leasing
Leasing companies
Short to mid-term
Preferential loans for investment; energy audit prerequisite
Local commercial banks supported with national
Energy Efficiency Fund, guarantee fund, development bank; grants for energy audit
Short term
Fiscal measure
Short to mid term
Preferential loans for investment;
List of eligible measures established
Local commercial banks supported with national
Energy Efficiency Fund, guarantee fund, development bank; grants for energy audit
Short term
Low income households:
low cost investments and
technical advice
Subsidized from state budget and municipalities;
redirected subsidies from energy utilities to endusers;
Mid-term
Fiscal measure
Short to mid term
Public buildings
Commercial
buildings
Multi apartment
buildings
Family houses
The experience from both the Old and New EU Member States suggests that the first target in national
energy efficiency programmes may be public service sector. It seems that potential for energy efficiency
improvement in public buildings in Western Balkan countries is high. Investments in state owned and operated public buildings are planned through state budget allocation of responsible ministries. All countries
are willing, but not financially able, to perform energy efficiency improvement retrofitting of buildings in
their ownership. With regards to municipalities, the situation differs significantly. Some municipalities,
mostly capital and other larger cities with strong local economies are financially able to retrofit their public
buildings. However, smaller municipalities in underdeveloped regions are incapable of conducting such
works. Further, they have difficulties in obtaining loans from commercial banks.
A number of recommendations for public and municipal sector are provided.
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Industry
There are several financial schemes adopted in Western Balkans out of which the most widespread are
direct loans including Technical Assistance. No guarantee funds are in place in the industry sector.
Grants are very seldom used. Credit lines are the most common and successful type of financing
scheme. The biggest sources of financing include EC, international financial institutions and bilateral donors. Energy Efficiency and Environmental protection funds and state budgets provide a small percentage
of the overall financing on Energy Efficiency in the industry sector within the Region.
RELEVANCE
Albania
Croatia
Kosovo
BiH
FYR Macedonia
Montenegro
Serbia
Given the high electricity consumption in the industry sector due to use of motors, it is recommended that
the energy levy is combined with fiscal mechanisms aimed at replacing old motors with high efficiency
motors and to install variable speed drives. The interaction between the two actions would favour the increase of energy efficiency in the industry sector, without increasing the economic burden of the final industrial consumers. Furthermore, the Government of Western Balkan countries may consider introducing
partial exemption from energy price levies for those industrial users that demonstrate increased energy
efficiency at their facilities by a certain percentage value. Below are some country specific recommendations about legal and regulatory practices in industry sector which should allow Western Balkan countries
to implement available and identified financial and fiscal options to improve the energy efficiency in industry sector:
Adopt and implement EU Directive on high efficiency cogeneration
(CHP Directive 2004/8/EC).
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Encourage ESCOs and other investors to enter the market.
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Define Energy Audit Scheme and Demand Side Management
Scheme for industry.
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Replacement of cross-subsidies between industry and households
with a more targeted social assistance and introduction of an energy
price levy in industry sector.
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Adoption of minimum energy performance standards (MEPs) for electric motors.
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Set targets for energy efficiency improvements for regulated energy
companies.
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Set-up reliable and meaningful package of global indicators of energy
efficiency and CO 2eq emissions in each industry sector for benchmarking purpose.
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Specific recommendations in industry sector for all Western Balkan Countries include:
• Provision of loan guarantee to SMEs;
• Promote the combination of loan and grant paid as cash back incentive payments;
• Promote EEMS development;
• Set up a centralised monitoring system of soft-loans and credit lines available in industry;
• Establishment of an Industrial Energy Efficiency Network;
• Introduction of Energy Tax;
• Introduction of fiscal mechanisms;
• Introduction of Energy Saving Obligations for distributors;
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Transport
Based on the experience of New and Old EU MS, below are some recommendations that can be implemented in all Western Balkan countries regarding improvement of EE in the transport sector:
• Technical Vehicle Centre for all categories of cars and freight transport for their regular technical test
including measurement of CO 2 emissions. This will be useful for governments to improve tax preparation regarding energy efficiencies and forecasting of transport energy use as well as to provide a realistic basis for target setting and effective regulation;
• Purchase tax of car/vehicles to be linked to energy efficiency performance; annual car tax of
car/vehicles to be linked to energy efficiency performance;
• Several regional funds are operating in Western Balkan Countries like WeBSEDFF, WBPSSF –
SEEF, Green for Growth and Open Regional Fund. A combination of loans and grants from International Donors can also be used also for projects in infrastructure of transport sector with the main goal
of promoting energy efficiency.
• Increase awareness campaigns for promotion of public transport, or transport by bike.
• Establishment and implementation of EE criteria in procurement of vehicles and transport services.
• Consideration the adoption of some fiscal mechanisms, for example the French system which combines subsidy and tax scheme, called “bonus-malus”, with a subsidy for low emission cars (i.e. <130g
CO 2 /km) and a tax on cars with high emissions (i.e. above 161g CO 2 /km).
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RECOMMENDATIONS FOR IMPLEMENTATION OF SELECTED FINANCING OPTIONS
This chapter comprises some ideas on how to improve the overall situation in Western Balkan countries,
acquire accurate information and data for the design of proper studies, and propose a list of technical advice programmes / studies that may result in loan requirements for Western Balkan countries to IFIs for
implementing the selected programmes. In drafting recommendations for future EU assistance and support to Western Balkan countries, structure, operation principles and up to date results of the Western
Balkan Investment Framework (WBIF) as the main EU tool for support to Western Balkan countries have
been taken into account.
RECOMMENDATION
GRANT (€)
LOAN (€)
Facilitating Comprehensive Dialogue and Support for Implementation of NEEAPs
Required, €200,000
Not required
Regional Training Workshops on Energy Management directed to end users
Required
Not required
Support the local Energy Agencies to enlist typical energy efficiency projects, products-systems and suppliers-installers
Required, €200,000
Not required
Training and capacity building to loan officers
Required
Not required
Technical Assistance (TA) for energy poverty and affordability
studies in CPs and mitigation tool
€200,000 per country
Up to €1M per country
TA/study on fiscal mechanisms in Contracting Parties for supporting energy efficiency improvement
€200,000 per country
None
Support for EPC / ESCo Market Development in Western Balkan countries
in total €200,000 to
300,000 (varies from
CP to CP)
€3 - 4M loan per CP
(varies from CP to CP)
Support for Energy efficiency revolving funds development
in total €400,000
Up to €2M per CP for
providing initial fund
Support for establishing Credit Guarantee Funds (all sectors)
in total €400,000
Loan up to €2M per CP
for providing initial fund
Support for creation of a centralised monitoring system of IFIs
credit-lines facilities
Required
TA for the use of existing instruments developed in the regions
up to 5% of total financing provided by IFIs
IFIs (WeBSEDFF,
WeBSECL, GGF, etc.)
Technical Assistance for identification of EE projects in public
buildings
up to 10% of total loan
WB (IBRD, IDA), GEF,
KfW, EIB, bilateral donors
TA for identification of investments in commercial sector
EBRD, EIB, KfW, bilateral donors
TA for identification of investments in industry
EBRD, EIB, ECB, KfW,
EIB, bilateral donors
Study on Fiscal and financial incentives to purchase low emission new cars in WBCs
Study on improvement EE into freight transport among WBCs
Detailed analysis is done in the Final Report and supporting documentation is presented in the Annexes
to the Final Report.
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(NEEAP) in the Western Balkans

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