EBRD Seminar on Energy Efficiency and Renewable Energy for Finnish private sector at the Ministry for Foreign Affairs of Finland on February 16th 2016, presentation by Ms. Stefania Cruceru

1. GREEN ECONOMY TRANSITION AT THE EBRD
Stefania Racolta-Cruceru
EBRD Energy Efficiency and Climate Change
February 2016

2. WHAT IS THE EBRD?
2
• €30 billion capital base
• €40 billion portfolio
• €8.7 billion average annual business
volume in the last three years
• AAA rated
• Public financing institution established
in 1991 to foster transition to market
economies
• Owned by 65 countries and 2
intergovernmental organisations
• Operates in 35 countries in Central and
Eastern Europe, Central Asia and the
Southern and Eastern Mediterranean

3. THE CHALLENGE
3

4. International context
• COP21 Paris : universal and ambitious agreement to limit the increase in global average
temperatures to +2*C; also, “to pursue efforts” to limit to 1.5*C
• The Sustainable Development Goals, adopted in 2015, provided increased focus on
environmental sustainability
• G7 Summit Leader’s Declaration in June 2015: MDBs need to maximise their balance
sheets in delivering climate finance and helping countries transition to low carbon
economies
• EBRD is at the forefront of efforts to channel resources from existing and emerging global
climate finance funds to projects on the ground.
GREEN ECONOMY TRANSITION CONTEXT
4

5. THE PATH
5
AMBITIOUS
Limit the increase in the average global
temperature to 2 degrees C
“Pursue efforts” to limit to 1.5 degrees C
UNIVERSAL
Agreement endorsed by 195
countries

6. GREEN ECONOMY TRANSITION CONTEXT
6
EBRD context
• Special mandate to foster transition to market economies – this implies that
resources are used efficiently
• EBRD focus is placed at the crossroad between sustainability, market development
and private sector support.
• Legacy of big enterprises and utilities having developed not reflective of costs and
environmental externalities
• Several EBRD economies display some of the highest energy and carbon emissions
intensity levels in the world
• Imperative to increase energy security
• Existing and forecasted water stress in Central Asia and SEMED countries

7. ENERGY INTENSITY IN THE EBRD REGION
7
• The EBRD region has some of the most energy-intensive economies in the world,
for instance Ukraine is the 10th energy intensive economy in the world, Russia the
11th, Kyrgyzstan the 13th and Moldova 18th.
0.0
0.5
1.0
1.5
kgCO2/USDofGDP(2005PPP)
EBRD Countries of Operations United Kingdom China

8. CARBON INTENSITY OF EBRD REGION
8
0.0
1.0
2.0
3.0
Cyprus
Albania
Lithuania
Greece
Hungary
Croatia
Slovenia
Latvia
Turkey
Slovakia
Tunisia
Romania
Morocco
Georgia
Poland
Armenia
Montenegro
Tajikistan
Azerbaijan
EBRDCoOs
Macedonia(FYR)
Bulgaria
Estonia
Jordan
Belarus
Egypt
RussianFed.
Serbia
Kosovo
Bosnia&H
Moldova
KyrgyzRep.
Kazakhstan
Ukraine
Uzbekistan
Turkmenistan
Mongolia
tonesofCO2emissions/US$1,000ofGDP
EBRD CoOs
EU-28 average
USA
2013 energy-use related CO2 emissions per unit of GDP
(2005US$ at market exchange rates) from IEA
• 11 out of the 20 most carbon-intensive economies in the world are in the EBRD region due
to the heavy reliance on fossil fuels in their energy mix. 9 out of those 11 are net-importers of
fossil fuels.

9. WATER STRESS IN THE EBRD REGION
9
Water risk indicator
Low to
medium
Medium to
high
High risk Extremely
high risk
Low
1 2 3 40 5

10. GREEN ECONOMY AND GET APPROACH
10
2006 2013 2015
Sustainable Energy Initiative Sustainable Resources Initiative Green Economy Transition
• Energy efficiency
• Renewable energy
• Water efficiency
• Material efficiency
• Adaptation to climate change
• Environmental protection
• Technology transfer
A green economy is a market economy
• in which public and private investments are made with a specific concern to minimise the
impact of economic activity on the environment; and
• where market failures are addressed through improved policy and legal frameworks aiming
at accounting for the inherent value of limited natural resources, at managing related risks
and at catalysing innovation.
• The new GET approach will mean even more projects in the Bank’s countries of operations
will have a sustainable energy and resources element.

11. • Financing offered on market terms:
• Debt
• Equity
• Guarantees
BUSINESS MODEL
11
• Targeted technical assistance
Enables transfer of skills, builds up the
capacity of clients to develop their businesses,
assists in introducing new policies or products,
etc
• Concessional or grant financing
Helps overcome barriers : affordability
constraints, transaction costs associated with
setting up new business lines, penetration of
advanced technologies onto the market
Financing on
commercial
terms
Additional
instruments to
overcome
barriers

12. 12
Activities to address resource
efficiency gaps
• Energy and resource audits
to identify sustainable
resource investments
• Integrated technical,
financial and marketing
consultancy teams to support
banks in developing
sustainable energy as a core
business
• Risk assessments related to
climate vulnerabilities
• Transition gaps and market
scoping studies
POLICY
DIALOGUE
PROJECTS &
INVESTMENTS
TECHNICAL
ASSISTANCE
Tailored financing instruments
• Direct financing
• Indirect-financing via local banks
(SEFFs)
• Technology Transfer investment
grant support
• Blended concessional finance so as to
overcome affordability and risk
perceptions
Working with governments
• To strengthen the institutional
and regulatory framework
BUSINESS MODEL

13. 13
DELIVERY MECHANISMS
Direct financing of
large borrowers
Local Partner
Banks
Reaching out to SMEs and
residential borrowers via
local banks
Energy Efficiency
team
Externally hired
consultancy team
EBRD

14. THE EBRD TRACK RECORD:
OPERATIONAL RESULTS
14
10 years after launch of SEI in 2006,
results as at end 2015:
• 1,080 projects
• €19.3 billion cumulative EBRD
SEI/SRI financing
• €106.9 billion cumulative total
project value
• 64% in private sector
• 30% of the Bank’s overall ABI in
2015
1.5
3.2
3.2
3.2
3.4
1.1
2.9
Central Asia
Central Europe & Baltics
Eastern Europe & Caucasus
Russian Fed.
South-Eastern Europe
SEMED
Turkey
Cross-regional
8.2
3.4
3.2
4.5
SEI/SRI ABI
by banking group and
by region (€ billion)
Energy
Financial Institutions
ICA
Infrastructure

15. THE EBRD TRACK RECORD:
ENVIRONMENTAL IMPACT
15
REDUCED
77 million
tonnes of CO2/year
In 2006–2015
More than the annual energy
use related CO2 emissions of
Romania or twice those of
Sweden
SAVED
33 million
m3 of water /year
In 2013–2015 from 70 water
efficiency projects
Equivalent to a third of the
annual water consumption of
the population of Prague
REDUCED
1 million
tonnes of waste /year
In 2013–2015 from 40 waste
efficiency projects
Various streams of waste:
metals, minerals, agricultural
waste

16. GET OBJECTIVES AND DRIVERS
16
GET objectives:
• further scale-up Bank operational
and policy activity to accelerate COO
transition to low carbon economy and
climate resilience
• broaden green investment activity
through environmental
dimension
• develop innovative technical
and financing products
supporting private sector climate
action complemented by public sector
channels when needed
• in quant terms, increase EBRD
environmental climate financing to
40% of total ABI by 2020.
15%
19%
29% 28%
34%
30%
40%
0
1,000
2,000
3,000
4,000
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
...
2020
€million
Resource
efficiency in
municipal
infrastructure
Renewable energy
direct financing
Energy efficiency
in the power and
resources sectors
Sustainable energy
financing facilities
via banks
Resource
efficiency in the
industrial, agri and
buildings sectors
Share in total Bank
investments

17. GETTING THERE!
17
40%
2020 target for the share
of GET business
in EBRD ABI
€4 billion
Target annual EBRD green
business by 2020
€18 billion
Target cumulative EBRD
green business 2016-
2020

18. GET: SCALING-UP
18
GET approach builds on range of activities and expertise developed under SEI and SRI.
Activities expected to drive GET scaling-up include:
• Direct private sector resource efficiency financing in industrial, agribusiness, commercial
and infrastructure sectors including circular economy projects.
• SEFF expansion through development of network of participating banks and countries
covered by facilities, and of product range.
• Renewable energy financing.
• Develop FINTECC activity supporting climate technology transfer to countries with low
technology penetration.
• Improvements in power network infrastructure and efficiency in conventional generation
and natural resources value chain.
• Expansion of municipal infrastructure energy efficiency activity including street lighting
projects and low carbon transport modes.
• Pursue development of gas flaring reduction projects.

19. GET: INNOVATION
19
Main GET innovation areas include:
• broadening the environmental dimension
• sector innovation
• flexible instruments
Examples of GET innovation activities include:
• Green logistics projects
• Development of adaptation project financing across sectors
• SEFF for small and medium sized climate adaptation projects, and to support local
environmental technology development
• Public buildings energy efficiency projects
• Support to accelerated implementation of environmental standards (through ESAPs and
SEFFs) and environmental remediation in industry, natural resources and transport
• Pollution reduction including local air quality improvement
• Demand side management through utilities and smart grid development
• Development of biofuel/bioenergy sources, and waste to energy for district heating
• Water efficiency projects
• Supply chain financing to reduce environmental footprint
• Flexible approach to allow targeted use of public channels of transition impact relevant for
public building energy efficiency and climate resilience.

20. GET: POLICY WORK
20
Building on capacity and tested practice, pursue technical assistance, policy advice and
advocacy work to strengthen GET policy framework.
Intended Nationally Determined Contributions (INDCs) developed in context of COP21 by
all EBRD COOs (except Kosovo and Uzbekistan) provide a frame to develop policy agenda
and investment priorities to be reflected in country strategies.
At regional level, policy work could include support to national adaptation strategies in key
vulnerable countries including Kazakhstan, SEMED and Turkey, or INDC preparation in
major countries.
At specific country level, policy work could include energy efficiency labelling, renewable
energy TC on implementation, policies for buildings energy efficiency and support to green
cities policy and planning.

21. €203 million
0
50
100
150
200
2006 2007 2008 2009 2010 2011 2012 2013* 2014 2015
€million
Grants
Concessional
co-finance
TC
GET DONOR FUNDING AND RESOURCES
21
• Strong donor support to date with €389
million committed in TC (2006-14) and €270
million non-TC funding (2013-15)
• Shareholder support with approval of
incremental budget for GET
implementation.
* Full SRI concessional co-finance and grant data available from 2013 onward

22. GET ACTION:
ON THE MOVE ACROSS REGIONS AND SECTORS!
22
CONTINUING TO
SCALE-UP
INNOVATION BROADENING THE
ENVIRONMENTAL
DIMENSION
• SEFFs
• Renewable energy
• Flexible financing
channels
• Technology transfer
• Sector innovation
• Financing
environmental
improvements

23. Materials efficiency in Turkey manufacturing
23
CLIENT
The second largest PVC profile manufacturer in
Turkey.
PROJECT
Supporting the company in constructing a new state-
of-the-art plant and in enhancing its plastic waste
recycling capabilities, both of internally produced
waste streams as well as from external collection.
INVESTMENT PLAN
EBRD loan € 25 million of which green finance
represents € 7 million
Concessional parallel loan from the CleanTechnology
Fund € 1 million
RESOURCE AUDIT
Audit funded by the Government of Spain
recommended innovative measures: tri-generation,
solar PV, improved automation and controls, high
efficiency motors and drives and wastewater
treatment. Most measures have payback times
between 3-5 years.
IMPACT OF PROJECT
• The company will increase plastic waste recycling rates
from below 10% currently to over 15%
• Estimated plastic recycled of 800 tonnes per year
• Estimated emission reductions of 22,000 tCO2/year

24. GET ACTION
SCALING UP
24
RENEWABLE ENERGY SUSTAINABLE ENERGY
FINANCING FACILITIES
• Continued support for wind and
biomass-based generation
• Growth in solar energy
particularly in SEMED
• Focus on hydro in Central Asia
and Caucasus
• Launching SEFFs in new countries
• Rolling out SEFF activities in new
sectors in countries already
covered by facilities

25. Biomass CHP in Latvia and Estonia
25
CLIENT
Producer of wood pellets based in Estonia with operations
in the Estonia and Latvia. It has a business in electricity
and heat generation through its biomass fuelled
combined-heat-and-power (CHP) plants.
PROJECTS
In 2011, 2013 and 2015 the EBRD supported the financing
of three pairs of new biomass CHPs in Estonia and Latvia.
These produce both electricity to sell to the grid and heat
to support the company’s pellet business.
INVESTMENT PLAN
2011 EBRD loan € 34 million
2013 EBRD loan € 30 million
2015 EBRD loan € 42 million
Parallel commercial banks lending €146 million
IMPACT OF PROJECTS
New biomass-based generation capacity: 41 MW
New biomass-based heat capacity: 109 MW
Green electricity generation: 300 MWh/year
Estimated emission reductions: 189,000 tonnes of
CO2/year

26. Sustainable Energy Financing Facilities
26
• Through Sustainable Energy Financing
Facilities (SEFFs), the EBRD extends credit
lines to local financial institutions.
• Local financial institutions on-lend funds to
small and medium-sized businesses, corporate
and residential borrowers.
• Finance is provided for energy efficiency,
small-scale renewable energy and water
efficiency projects.
• SEFFs establish project implementation teams
who support local financial institutions and
their clients.
• SEFFs may often include partial grant
financing of sub-loans as incentives, or
concessional elements to support partner
banks in developing the corporate structures
necessary to
EBRD
Donor funding
• EE corporate
strategy
• Marketing support
• Training /appraisal
support
Credit lines
Technical assistance
team
Partner
financial institutions
• Energy Audits
• Eligibility check
Commercial loans
Local borrowers
SEFFs are an integrated model to
support banks develop sustainable
energy as a durable, core business
area

27. Results of the SEFF programmes
27
• Developed integrated SEFF
programmes in 22 countries
• 100 Partner Financial Institutions
received technical assistance and
credit lines
• 95,000 investments implemented
• Worth over €3 billion
• Saving over 14 million MWh
equivalent each year
• Avoiding over 5 million tonnes of
annual CO2 emissions

28. GET ACTION
POWER SECTOR RESILIENCE AND EFFICIENCY
28
POWER SECTOR WATER EFFICIENCY IN WATER-STRESSED
COUNTRIES
• The reliability and efficiency of thermal power generation is already being
affected by rising temperatures and increasing water scarcity, particularly in
more water scarce countries
• A first investment in dry cooling technology decreased the reliance on water for
Damanhour CCGT in Egypt (US$62 million of adaptation finance out of EBRD
financing of US$200 million)
• Country study for Turkey currently underway; examines the vulnerability of the
power sector to climatic impacts and identifies potential investments

29. Example of climate resilience project in
Tajik hydropower
29
CLIENT
State Unitary Enterprise KMK
PROJECT
Financing for rehabilitation of two units at the Qairokkum hydro power
plant.This will increase capacity of the plant from 126MW to 142MW,
increase the safety level and strengthen the plant’s resilience against
the projected impacts of climate change.
ADAPTATIONCOMPONENT
• Rehabilitation of hydro power plant to make its operation more
climate-resilient
• Climate resilience built into the design of the upgrade by modelling
future hydrology outcomes under a range of climate change
scenarios
• Turbine upgrade and spillway capacities adjusted to optimise power
generation and safety across the range of projected hydrological
conditions
TECHNICAL ASSISTANCE
US$4.7 million provided by the EBRD’s Special Shareholder Fund, the
government of Austria and the UK.This amount was mainly used for
climate resilience skills transfer to the client.
FINANCIAL STRUCTURE
The EBRD’s credit line US$50 million
The CIF PPCR* funds US$21 million
 Loan US$10 million
 Grant US$11 million
TechnicalCooperation grants US$4.7 million
Total project value US$75.7 million
* The Climate Investment Funds (CIF) Pilot Programme for Climate Resilience
(PPCR)

30. GET ACTION
PUBLIC BUILDINGS REHABILITATION
30
LARGE POTENTIAL ACROSS ALL COOs
• Buildings sector responsible for approximately a third of the final energy
consumption in EBRD COOs, and for approximately the same share of total
greenhouse gas emissions.
• Buildings in the public sector in most EBRD COOs lag behind in terms of
adopting efficient buildings and buildings management measures and
technologies.
• This considerable gap in terms of inefficient energy and water use and low
penetration rates of advanced technologies is most effectively addressed via
focused sovereign and sub-sovereign approaches.

31. GET ACTION
GREEN CITY INTEGRATED APPROACH
31
TBILISI “GREEN CITY”
• Integrated approach and projects based on
Green City Action Plan, including bus systems
upgrades, waste logistics and public buildings
rehabilitation.

32. GET ACTION
CLIMATE TECHNOLOGY TRANSFER
32
FINTECC IN UKRAINE AND KAZAKHSTAN
• FINTECC (Finance and Technology Transfer Centre for Climate Change)
enables the uptake of high efficiency technologies in countries with
underdeveloped supply chains and low market penetration rates.
• Combines targeted TC and policy dialogue activities with support for
climate investments via partial capital grants for eligible technical
measures, made available by the Global Environment Facility.
• After successful rollout in ETC countries and SEMED the programme
has been recently extended to Ukraine and Kazakhstan.

33. Supporting technology transfer
33
FINTECC PROGRAMME
• FinTECC (Finance andTechnologyTransfer
Centre for Climate Change) aims to enable the
uptake of high efficiency technologies in
countries with underdeveloped supply chains
and low market penetration rates of such
technologies.
• The programme offers up to 25% grant cover out
of the cost of eligible climate technologies with
low market penetration rates but high replication
potential.
• Targets early market development and
affordability and “first-mover” barriers.
• The programme is supported by the Global
Environment Facility.
PROJECT EXAMPLE:
POULTRY FARMING IN JORDAN
• Leading integrated poultry producer in
Jordan received EBRD financing of US$
21 million
• Approximately US$ 1 million to support
investment in heat exchange
technologies, earmarked as SRI finance.
• 18% of the SRI capital investment
supported via a FINTECC grant.

34. GET ACTION
CLIMATE RESILIENCE IN PORTS
34
CLIMATE RESILIENCE IN MOROCCO’S PORT INFRASTRUCTURE
• Targeted investment in priority port infrastructure upgrades (e.g.
breakwaters) that build resilience to sea level rise and extreme storm
events.
• Technical assistance to introduce best international practices in port
sector resilience to extreme weather events and climate change
• Planned investment of US$40 million supported by GEF grant co-financing
of US$6 million.

35. GET ACTION
CLIMATE RESILIENCE FINANCING FACILITY
35
TAJIKISTAN CLIMADAPT FRAMEWORK
• Building on the SEFF approach, the facility encourages the uptake of measures and
technologies which boost climate resilience, via on-lending by local partner banks.
• Climadapt brings together EBRD pilot credit facilities of up to US$ 5 million, up to
US$5 million of concessional loans from the Climate Investment Funds and TC
resources of €2.3 million made available by the EBRD SSF and the UK DFID for
extensive sub-project preparation.
• The innovative approach makes investments in water and energy efficiency, and
sustainable land management accessible for Tajik businesses, farms and households.

36. EBRD climate adaptation activities
36
• Many of the EBRD’s countries of operation are vulnerable to climate risks such as water
scarcity, altered hydrology and flooding.
• Climate vulnerability is worsened by poor infrastructure, suboptimal technologies, poor
policy context and lack of data, and limited access to appropriate finance.
• The EBRD helps clients undertake actions to adapt to climate change and make them
resilient by identifying potential climate risks and providing both technical and financial
support.
• EBRD adaptation business tools include:
• Feasibility study methodology for climate-resilient water supplies
• Guidance on making ports and coastal infrastructure climate resilient
• Analytical tools for managing climate change risks to hydropower
• Industrial water efficiency audits
• Since launching activities specifically dedicated to climate change adaptation in 2011,
the EBRD financed 107 projects with climate resilience components totaling €640
million.

37. GET ACTION
ENVIRONMENTAL DIMENSION
37
BROADENING THE ENVIRONMENTAL DIMENSION
• Investigating potential for financing capital investments arising from
Environmental and Social Action Plans, for M&S projects in EU Member
States and Serbia.
• Could be extended to other sectors and countries
• Purpose is to improve broader (beyond climate) environmental standards
and impacts.

38. GET THE DIFFERENCE
38
We are the first generation to feel the sting of climate change, and we
are the last generation that can do something about it.
Governor Jay Inslee
State of Washington

39. 39
For more information:
http://www.ebrd.com/work-with-us/project-finance.html
http://www.ebrd.com/work-with-us/trade-facilitation-programme.html
http://www.ebrd.com/work-with-us/procurement/consultancy-services.html
http://www.ebrd.com/work-with-us/procurement/project-procurement.html

40. Contact:
EBRD Energy Efficiency and Climate Change
Stefania Racolta-Cruceru
RacoltaS@ebrd.com