Cibuk1– the largest wind farm built in Serbia and the wider Western Balkans region
EBRD and donors boost green financing in the region
The Western Balkans is a key region and a key partner for the EBRD’s green working. Southeast Europe has enormous potential for green energy development, with its rivers providing hydroelectric power, its mountains and plains enabling wind power, its underdeveloped solar power, and people living in its many cities concerned with sustainable development.
However, much remains to be done: Western Balkan countries are still heavily dependent on aging coal-fired power plants and suffer from high levels of air pollution. Carbon intensity in Kosovo, Bosnia Herzegovina And Serbia is more than six times greater than the European Union (EU). Achieving energy efficiency remains a major challenge in a region where energy consumption is up to 2.5 times higher than the average for European OECD countries.
So much for the bad news. Because there is also good news and hard work from the EBRD – and more and more.
THE EBRD Western Balkans Investment Summit Today we will highlight successful examples of how countries in the Western Balkans region are embracing the concept of transitioning to a green economy.
Since 2006, the EBRD has invested more than 3 billion euros in the “greening” of the region. In addition to providing financing, the Bank also engages very actively with national governments to reform legal and policy frameworks to create an environment in which individual projects can succeed and broader impact is possible. For example, in North Macedonia, an energy efficiency law drafted with the support of the EBRD and approved by the government recently passed its first reading in Parliament; Meanwhile, on the renewable energy side, EBRD support was crucial in launching and awarding the first private solar PV auction in the country.
Large-scale investments in renewable energy projects provide alternative energy sources to traditional coal, and work is underway to upgrade district heating networks across the region.
In Albania, the EBRD financed the modernization of Korporata Elektroenergjitike Shqiptare (KESH), the country’s largest electricity producer, is supporting the company with a restructuring and reform program.
The Bank financed the first two large-scale wind farms in Kosovo: Kitka And Bajgora wind farms, thus providing a concrete path to address the challenge of power cuts and pollution caused by the lignite coal that powers Kosovo’s two main power plants.
In Montenegro, Following a lengthy policy dialogue on the bankability of the power purchase agreement, the EBRD was the first financial institution to structure a project finance loan for the Krnovo wind farm, the first private wind farm in the country and, at the time of financial close, also the first private wind farm in the Western Balkans region.
In North Macedonia, the EBRD financed MYthe first large-scale solar power plant installed on the site of a depleted lignite mine, representing a concrete example of how to implement some of the solutions of the Just transition in the EU policy in favor of coal mining regions in the Western Balkans.
In Serbia, the Bank supported the construction of the country’s two largest wind farms: the 158 MW Čibuk wind farm in Dolovo; and the Kovacica wind farm with a capacity of 104 MW.
Ten cities in the region have joined EBRD Green Cities, the success of the Bank’s urban sustainability program. The billion-euro programme, in which 39 cities are currently participating, recognizes that 80 percent of greenhouse gas emissions come from cities and are therefore a key location for tackling climate change.
In the Western Balkans, Banja Luka, Belgrade, Kumanovo, Novi Sad, Podgorica, Pristina, Sarajevo, Skopje, Tirana and Zenica have joined the initiative.
Concrete actions quickly followed: in Banja Luka, the Bank provided a loan for the reconstruction of the heat distribution network, thereby helping to improve the energy efficiency of the system by reducing hot water leaks and heat losses . In Zenica, the Bank joined forces with the EU and the Investment framework for the Western Balkans (WBIF) to help the cantonal hospital save energy. The renovation will result in energy savings of more than 60 percent and a reduction in CO emissions2 emissions up to 80 percent.
Support residential energy efficiency, The Bank has reached more than 3,500 families in the six Western Balkan countries through the Bank’s program. Green Economy Financing Mechanism (GEFF). The program provides funding to local banks to on-lend to households to invest in green technologies and solutions such as improving home insulation and installing efficient boilers.
To improve the energy efficiency of businesses and municipalities, in North Macedonia, the Bank financed the renovation of a student dormitory, thereby improving living conditions in 168 student rooms. Since 2013, it is one of 332 successful projects carried out across the region under GEFF’s sister programme, the Western Balkans Sustainable Energy Financing Facility (WeBSEFF).
Sometimes the different elements of EBRD programs are combined, as in the case of local renewable energy in the Western Balkans (ReDEWeB) program that supports solar district heating throughout the region. The region’s large district heating networks often operate at return temperatures as low as 45°C, making them well suited to solar and geothermal power rather than coal or fuel oil. The €4 million programme, run under the auspices of the EBRD and funded by the Austrian government, offers technical assistance and small investment grants for the insulation of solar systems.
After much already done, a panel at Monday’s EBRD event on the “green energy transition” in the Western Balkans will bring together ministers, advisors to prime ministers, EU representatives, investors and financiers to discuss how countries in the region are adopting the concept of transitioning to a green economy. The aim will be to identify the next steps to create a more sustainable future and do more in the region – working with governments, foreign and local investors to help create the conditions for successful investments that will help make Greener Western Balkans.