2 davor kunc wbif presentation to undp edited

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  • Over 85% of grants by number are TAs. Numbers are TAs 131; Investment grants 19; IRS 5 (linked to TAs); FF 2. Average size of TA is 0.86 million and average investment grants is 5.0 million. By value TAs are less 40% with Investment grants 35% And Financing facilities 20%. 5% IRS
  • Reasonable overall balance between sectors both by number and by value for infrastructure projects
    PSD has only two grants but of course one of these is the EDIF SME grant which is 34 million and 20% of portfolio by value
  • Reasonable balance. Croatia has become active over last two years and Kosovo has increased its number due to the addition of World Bank as lead IFI.
    Regional projects have been pushed hard at three NIPAC workshops but the number remain modest although significant.
  • 45 projects have signed loan agreements
    39 grants have had project preparation services completed
    34 projects are at tendering/construction stage
    20 are under construction
  • Growth in signed loans from 800 million to 1,600 million in last two years (April to April). Loans are listed in Tab
  • Report is structured into these three parts
  • The total debt for the region almost doubled in absolute values in 2012 compared to 2006.
    average annual growth rate of about 1.8% as expected for 2013-14 is insufficient to stimulate socio-economic development and sustain the build-up of growth-enhancing infrastructure.
    National saving in the Western Balkans is generally insufficient to maintain a healthy rate of growth through self-sustaining real capital formation, whose financing still depends decisively on foreign direct investments, foreign lending, external financial support (grants, loans from IFIs), and remittances.
    The challenge is to mobilise continuous and possibly expanding funds for ensuring access to capital for growth to finance activities such as infrastructure investments, SMEs and innovation in the region, and for generating positive spillovers for the EU.
    all available assessments of infrastructure needs as well as tentative estimates of possible financing gaps point to substantial shortages in socio-economic infrastructure in the Western Balkans relative to the average or standard provision of infrastructure services in the EU.
  • 2 davor kunc wbif presentation to undp edited

    1. 1. Sustainable Energy in the Enlargement Context EU Enlargement UNDP Conference on Sustainable Energy in SEE 9-10 December 2013
    2. 2. Content • Strategy and Policy: energy acquis (4 mins) • Operations: energy project portfolio (10 mins) • Going forward (3 mins) EU Enlargement
    3. 3. Strategy and Policy: Union's Energy Acquis EU Enlargement
    4. 4. Energy Policy in South East Europe • Energy Community Treaty • • • Guiding the energy policy in SEE Signatories: EU and the countries of SEE Energy Community • • • • extends the EU internal energy (electricity and gas) market to South East Europe and beyond overall framework to guide the necessary reforms and promote investments makes a significant contribution to security of supply in the wider Europe Energy Community Secretariat • supports the Contracting Parties in fulfilling their obligations and has established a number of working groups and task forces to facilitate their efforts: Gas, Oil, Electricity, Investments, Energy Efficiency, Renewable Energy, Security of supply, Competition, Environment, Regional Energy Strategy. EU Enlargement
    5. 5. SEE 2020: RE and EE Targets • Energy efficiency: • • Renewable energy: • • • • • • savings of 9% of final energy consumption, by 2018 to be achieved by 2020 Albania 38 %, Bosnia and Herzegovina 40 %, Croatia 20 %, Former Yugoslav Republic of Macedonia 28 %, Montenegro 33 %, Serbia 27 %, Kosovo* 25 % Energy intensity of GDP: reduce to the World average (in 2010: 0.25 tonnes of oil equivalent per 1000 USD (2005) of GDP). Unit cost of energy: decrease by improving average electricity thermal generation efficiency to 38% and increasing utilization rates to over 74%. Terms of trade in energy: improve (natural gas import price to NBP index and electricity export prices to over EEX average). Hydro power: create more value by increasing share of variable energy to over 45%. EU Enlargement
    6. 6. Importance of Infrastructure Investments • Instrument for Pre-Accession (IPA) recognises that infrastructure investments are vital for: • socio-economic growth; • integration of the region into the EU’s internal market for energy (ECT); and • to facilitate diversity and security of supply for the EU • Support has been available under national IPA and multi-beneficiary (regional) IPA EU Enlargement
    7. 7. Projects of Energy Community Interest (PECIs) • • • • • Priority energy infrastructure investments Endorsed by all SEE6 beneficiary countries Used to determine eligibility for grant support Mirroring similar PCI list of the EU However, SEE6 not having the equivalent Connecting Europe Facility: available to EU MS as grants for studies, special lending, various forms of loan guarantees, risk sharing facilities, eventually project bonds EU Enlargement
    8. 8. Operations: IPA Regional - WBIF, REEP, GGF EU Enlargement
    9. 9. Programming of IPA 2 Sectoral approach • Component structure replaced by comprehensive country strategies • Move towards a logic of (co)financing policy strategies instead of individual projects Single pipeline • Rolling investment plans for each sectors linking to regional strategies (TEN-T Transport, Energy) • Coherence of assistance and IFI/donor coordination Increased role of WBIF • High Level Meeting confirmed central role of WBIF as main vehicle to reinforce cooperation on investments in the region • More resources to be channelled through WBIF EU Enlargement
    10. 10. IPA 2: Figures • Total IPA budget ~€12 billion • • • • • 7 bio for TR, 5 bio for SEE6 /7 years 715 mio for SEE 6 p.a. /6 countries 120 mio for SEE 6 per country p.a. /2 (REG vs. NATL) 60 mio for per country annually for regional IPA Estimated investments needed in energy: between € 30-40 bio over 2014-2020 EU Enlargement
    11. 11. What is the WBIF? • • • • Western Balkans Investment Framework: overarching financial vehicle of regional IPA WBIF blends grants and loans to expedite priority investments in key sectors WBIF Stakeholders: beneficiary countries, EC, IFIs and bilateral donors Applications for support come from beneficiary countries EU Enlargement
    12. 12. WBIF Operating Framework Stakeholders EU Enlargement
    13. 13. WBIF Operating Framework – Application Process Project Preparation Joint Lending Facility •Technical Assistance •Feasibility studies •Loans •Designs •EC IPA •Investment grants National and regional projects Joint Grant Facility •Tender documentation •Government funding •Interest rate subsidies Resources Bilateral donors EU IPA IFI grants EU Enlargement •Assistance to financial intermediaries •Supervision •Assistance to PIUs Construction Beneficiaries
    14. 14. WBIF Operating Framework – Governance Structure WBIF Secretariat – DG Enlargement Supports the administration of the WBIF Technical Assistance Infrastructure Project Facilities I, II and III IFI Coordination Office EU Enlargement
    15. 15. Select achievements – WBIF grants to date     169 grants supported by WBIF 300 M€ grants allocated to approved projects More than 2.7 billion € loans signed to date WBIF pipeline contains more than 13 billion € total estimated investments EU Enlargement
    16. 16. Distribution of grants by TYPE EU Enlargement
    17. 17. Distribution of grants by SECTOR EU Enlargement
    18. 18. Distribution of grants by BENEFICIARY EU Enlargement
    19. 19. Tracking development of the WBIF pipeline EU Enlargement
    20. 20. Joint Lending Facility Growth in signed loans (€ billion) EU Enlargement
    21. 21. Energy in the WBIF • • • • 41 grants awarded for energy related projects Grant support € 71.8 million, 27% of all grants Total signed loans € 270 million; estimated total investment € 3.6 billion Projects include electricity transmission (11), gas transmission (8), district heating (7), renewable energy (10), energy efficiency (5) EU Enlargement
    22. 22. Growth in signed loans by sector (€ billion) EU Enlargement Data for November 2011, 12, 13
    23. 23. Growth in total estimated investment of WBIF pipeline (€ billion) Data for November 2011, 12, 13 EU Enlargement
    24. 24. Select achievements – WBIF pipeline • • • • • Pipeline has grown steadily over total 10 rounds of calls for proposals Pipeline of loans currently 3 times larger than original target Project preparation is progressing Signed loans increasing, currently at > €2,7 billion from 2,3 billion in 2012 34 projects at tendering/construction EU Enlargement
    25. 25. Investment Facilities: Regional EE Program (REEP)  Initiated 2013 with EBRD. Total EC contribution €23,5 mio.  Window I – Policy Dialogue • €6m for technical assistance, facilitate policy dialogue with all the authorities • regulatory frameworks, market barriers, investment in EE, ESCO markets  Window II – Credit Line (WeBSEFF II) • €75m credit line framework • to local financial institutions for onlending to smaller EE and RE projects; private, public • WBIF in addition provides €11.5m grant funding for TA and investment incentives  Window III – Direct Financing (WeBSEDFF) • €50m to replenish WeBSEDFF funding • medium scale RE and EE improvements in industrial enterprises; ESCO projects • Grants to the amount of €6.35m to fund TA and investment incentives EU Enlargement
    26. 26. Investment Facilities: Green for Growth (GGF)  Initiated 2009 with EIB, KfW. Total EC contribution €20 mio.  Difference: investment fund.  EU's 20/20/20 energy targets: financing for EE and RE projects to reduce CO2 emissions and energy consumption  Credit lines via local commercial banks  Direct financing  TA Facility EU Enlargement
    27. 27. Select achievements in EE and RE: Example 1: Plum Factory (WBIF/REEP, Serbia) Example 2: Furniture Factory (WBIF/REEP, Serbia) Example 3: Wind Farm (WBIF, Macedonia) EU Enlargement
    28. 28. Select achievements – WBIF projects under construction Wind Park Bogdanci – the Former Yugoslav Republic of Macedonia  Installation of 16 machines with a capacity of 36.8MW and an annual output of 100GWh of renewable energy  Will eventually grow to 25 machines with a capacity of 52.5MW  WBIF support: i) Feasibility study; ii) Wind measurement studies; iii) Environmental and social impact analysis; iv) Optimal machine positioning and site layout  Finances i) WBIF- IPA grant: € 400,000 ii) IFI loan (KfW): € 33,000,000 Estimate total investment: € 75,000,000  Project partners: ELEM | KfW  Status: Constructed – Wind Park stated operations in Summer 2013 EU Enlargement
    29. 29. WBIF Going Forward: Adapting to a Changing Operating Environment EU Enlargement
    30. 30. Macro-economic Outlook – Growth projections in the SEE6 • Recession in Euro area has affected growth prospects for SEE6 countries. • IMF predicting very modest economic recovery. • Will affect:  Investments - public and private  Private Consumption  Scope for government activities EU Enlargement
    31. 31. Issues Arising • • • • • • Immense scale of financing required Rising public debt, several countries nearing or exceeding 60% of GDP Impact of IMF programmes Current expenditure increasing, capital expenditure being cut Overall investment climate & competitiveness Limited fiscal space & scarcity of grant funds EU Enlargement
    32. 32. Fiscal Space Public Debt as % of GDP 2012 (IMF) EU Enlargement
    33. 33. GDP Growth (Source IMF) EU Enlargement
    34. 34. Macro-economic Outlook – Implications for the WBIF  Austerity programmes were implemented mainly at the expense of public infrastructure development.  Greater emphasis on the need for proper prioritisation of investment projects (current and planned)  Enhance links with regional, national and sectoral policies and strategies (SEE 2020, ECT, Transport. CEFTA etc)  Shift of focus to expediting priority investments under preparation EU Enlargement
    35. 35. WBIF Task Force – Main Tasks •Detailed Review of the WBIF Pipeline •Assess options to use innovative financing facilities (starting with PPPs) •Recommend changes to WBIF structures and procedures to take account of lessons learnt & impact of external environment & processes EU Enlargement
    36. 36. WWW.WBIF.EU EU Enlargement

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