In 2004, the European Bank for Reconstruction and Development (EBRD) established a new financing model in response to the energy challenges in Bulgaria, providing targeted private sector credit lines to local banks. These aimed to:
reduce energy demand by increasing energy efficiency in the industrial and residential sectors, and
replace the lost capacity for power generation by financing an increase in renewable energy production.
This new financing model is today called Sustainable Energy Financing Facility (SEFF); it involves credit lines offered to local partner banks in combination with intense technical cooperation and financial incentives for both partner banks and subborrowers. The model aimed to help overcome substantial barriers to market penetration for sustainable energy finance.
In Bulgaria, SEFFs have successfully demonstrated how they can support the creation of energy efficiency and renewable energy financing markets. In collaboration with nine commercial banks, more than €260 million1 of related financing has been leveraged by approximately €65 million of concessional funding in the form of technical cooperation grants and incentives.
This publication gives an overview of the SEFF in Bulgaria since it’s establishment there in 2004.
The SEFF has now been rolled out across 20 of the countries in which the EBRD works. It has provided over €2.4 billion of finance for sustainable energy, ranging from loans of a few thousand euros to refurbish windows, to multi-million euro loans for large-scale renewable or energy efficiency projects and is recognised as a powerful tool for ‘greening’ local banking sectors in transition countries around the world.
Sectors: Cross cutting, Finance, Industry, Renewables
Country / Region: Bulgaria, EuropeTags: case study, energy, energy efficiency, increasing energy efficiency, international development, renewable energies, response, specific financing mechanisms
Knowledge Object: Publication / Report
Published by: EBRD
Publishing year: 2016
Author: European Bank for Reconstruction and Development (EBRD)