The European Bank for Reconstruction and Development (EBRD) is increasing the availability of financing to individuals with an €8 million loan to Raiffeisenbank (Bulgaria) EAD, a subsidiary of Raiffeisen Bank International AG (RBI), for on-lending for residential energy efficiency projects.
The financing is part of a €40 million extension of the Residential Energy Efficiency Credit Line (REECL) Framework which was recently approved by the Board of Directors of EBRD. The original REECL established in 2005 was the first scheme to systematically address energy wastage on a household level, using the retail lending market to finance efficiency improvements and structuring the supply side with strict criteria for energy efficiency equipment.
The new facility will build on the success of the original framework, continuing the good work that has been achieved with participating banks and will especially target areas that remain underdeveloped, i.e. more complex building-level refurbishment by housing associations. The EBRD credit lines will be complemented by grant funding from the Kozloduy International Decommissioning and Support Fund (KIDSF).
Bulgaria is an energy intensive country; according to some estimates, energy usage is 5.6 times higher relative to GDP than the EU average. Using the same ratio, Bulgaria emits 6.4 times more carbon than the EU average. Bulgarian households account for over one fifth of total energy usage and as energy prices are expected to rise over time, people are increasingly interested to improve energy efficiency.
Raiffeisenbank (Bulgaria), 100% owned by RBI, is one of the leading players on the Bulgarian banking market. The bank has been an EBRD client since 2002 under various credit lines including the original REECL facility under which Raiffeisenbank managed to finance approximately five thousand projects for €8 million.
“I am pleased to develop further the long-standing relationship between EBRD and Raiffeisenbank. This particular product helps achieve one of the EBRD’s strategic priorities in Bulgaria – reducing the country’s energy intensity. In this case, the loan will support investments in improved efficiency at the residential level, where approximately 20% of Bulgaria’s total energy usage”, said Daniel Berg, EBRD's Director for Bulgaria.
“Raiffeisenbank finances the purchasing of energy efficient windows, solar water heaters, biomass heating systems, gas water heaters, air-conditioning units, insulation,” said Momtchil Andreev, Director of Raiffeisen Group Bulgaria. “With BGN 2,500 for funding the change of the windows in a flat of an average size, the heating bills are reduced by about 35%. This is a perfect investment, which is repaid in about 7 years, and the customer receives a bonus – 20% of the loan amount is given back to them.”
Since the beginning of the EBRD’s operations in Bulgaria, the bank has invested over €2 billion in various sectors of the country’s economy, mobilising additional investment in excess of €5 billion. The sustainable energy efficiency finance facilities of EBRD launched on the Bulgarian market have been for about €260 million.