EBRD starts sustainable energy financing facility in Azerbaijan
By Gulgiz Dadashova
The European Bank for Reconstruction and Development announced about the launch of ‘Energocredit’ in Azerbaijan, as part of the Caucasus Energy Efficiency Programme (CEEP).
A $ 125 million credit line will be opened for local partner banks to boost the use of energy resources for small and medium-sized enterprises (SMEs), local businesses and households in Azerbaijan, the bank reported.
This facility is contributing to the EBRD’s Sustainable Energy Initiative, which supports the scaling-up of sustainable energy investments across the Bank’s region.
Energocredit is aimed to help local financial institutions promote sustainable energy investments by their clients and to demonstrate the technical and financial benefits of such investments for private businesses and households.
Launched in 2007, CEEP aims to help industrial and residential clients reduce their energy intensity and make greater use of renewable energy sources. The facility is also supported by grant funding from the European Union Neighbourhood Investment Facility, the Austrian Federal Ministry of Finance as well as by the EBRD Shareholder Special Fund. These grants will be used for technical assistance and investment incentives for successful sub-projects.
The EBRD has engaged a team of international consultants to provide support to local banks, firms and households with a dedicated technical package. This support will enable companies and homeowners to make the transition from using inefficient equipment and technologies towards better-performing, more energy-efficient facilities, which will gradually reduce energy bills over time.
Three local banks, DemirBank, Muğanbank and AccessBank, have already benefited from the program, and Unibank has also shown interest in Energocredit. AccessBank has directed resources it borrowed from the EBRD towards improving the energy efficiency of its head office building. DemirBank and Muganbank will on-lend their EBRD funding to local firms and retail clients to finance energy efficiency projects, and Unibank is considering joining the program in the near future.
The EBRD has been active in Azerbaijan since the country's independence. To date the Bank has invested in 146 projects with over $2.5 billion across various sectors of the Azerbaijani economy. One of the EBRD's priorities in the country is to support the growth of the non-oil private sector by investing in dynamic small and medium-sized enterprises.