Energy Efficiency Project

The objective of the proposed project is to foster a large increase in energy efficiency investment in Romania through development of a self-sustaining, market-based mechanism. The project’s goal is focused on the development and implementation of commercially viable energy efficiency investment projects, which can provide sustainable and increasing reductions in GHG emissions without public subsidy. The project would achieve this by buying down the perceived high risk and high transaction costs of initial investments, providing interest free seed capital to the fund, and overcoming the current barriers to expanding investment, through the creation of a self-sustaining, market-based energy efficiency project development and financing fund. The fund would directly support the implementation of a growing number of energy efficiency projects on fully commercial lending terms, demonstrating means to overcome current barriers and make profits through such projects. With initial success, the fund can also foster, through both demonstration effects and explicit partnerships, expanded investment by other market players, such as commercial banks or energy service companies (ESCOs). Without the intervention of the project to break through the current logjam, however, the barriers described previously will stifle market development and any progress in energy efficiency investment over the next five years, just as occurred during the past five years.