The World Bank approved an Energy Efficiency Project for the Republic of Bulgaria. The Project is funded by a US$10 million grant from the Global Environment Facility (GEF) Trust Fund.
The project, which is a public-private partnership, will support the commercially oriented operation of the Bulgaria Energy Efficiency Fund (BEEF). The primary goal of BEEF is to develop and finance bankable energy efficiency projects that can reduce greenhouse gas emissions in a sustainable manner.
Energy inefficiency is so excessive in Bulgaria that the country can be portrayed as a ‚little Saudi Arabia‘ in the field of energy savings. The vast energy conservation potential can be tapped in a profitable manner, while helping the environment, provided viable energy efficiency projects are prepared and financed at terms affordable to energy consumers,â\200\235 said World Bank Project Team Leader Mr. Istvan Dobozi.
Financial support for the project from the Government of Bulgaria, bilateral and multilateral donors, as well as Bulgarian private companies, is expected to reach US$8 million. Additionally, co-financing leveraged from commercial banks and project sponsors is projected at US$34 million over the next five years.
The Bulgaria Energy Efficiency Fund combines both technical project and financial structuring capacity into one entity, thereby addressing the current weak capacity to develop and finance energy efficiency projects. The Project consists of three components:
- Partial credit guarantees: to share in the credit risk of energy efficiency projects.
- Loans: to co-finance energy efficiency projects on a commercial basis.
- Technical assistance: to initially finance on a grant basis a portion of project development and operating costs of BEEF in the early years.
Over a 15-year period, BEEF is expected to mobilize energy efficiency financing totaling about US$200 million, thereby facilitating the emergence of a competitive and self-sustainable energy efficiency market in Bulgaria.
The Global Environment Facility is a mechanism for providing new and additional grant and concessional funding to meet the agreed incremental costs of measures to achieve agreed global environmental benefits in the four focal areas – climate change; biological diversity; international waters; and ozone layer depletion. GEF also supports the work of the global agreements to combat desertification and eliminate persistent organic pollutants.
The World Bank Group is one of GEF’s implementing agencies and supports countries in preparing GEF co-financed projects and supervises their implementation. It plays the primary role in ensuring the development and management of investment projects. The Bank draws upon its investment experience in eligible countries to promote investment opportunities and to mobilize private sector, bilateral, multilateral, and other government and non-government sector resources that are consistent with GEF objectives and national sustainable development strategies. Since 1991, the World Bank Group has committed US$1.972 billion in GEF resources and US$3.037 billion in Bank group co-financing for GEF projects in 80 countries. In addition to GEF and Bank resources, it has mobilized additional co-financing of US$6.952 billion from other donors.
Since Bulgaria joined the World Bank in 1990, Bank commitments to the country total approximately US$1.8 billion for 33 operations.