The FINANCIAL — The EBRD launched a facility to promote sustainable energy financing in Belarus.
The FINANCIAL — The EBRD launched a facility to promote sustainable energy financing in Belarus, a country with a highly industrialised and energy intensive economy inherited from the breakup of the Soviet Union. The facility will help Belarus to reduce its energy consumption and provide environmental benefits by reducing carbon emissions and pollution.
The first loan under the newly created USD 50 million EBRD programme is a five-year loan of USD 4 million to Minsk Transit Bank (MTBank). As the European Bank for Reconstruction and Development reported, the loan will allow this private bank to offer its industry and small business clients long-term funding to promote targeted investments in energy efficiency and renewable energy.
In addition to the funding, borrowers will benefit from the technical expertise that the EBRD framework also provides.
The financing will mainly go towards medium and small-scale sustainable energy projects undertaken by privately-owned industrial companies, including those involving the use of renewable energy.
A broad range of sectors will qualify for these loans including manufacturing, services and retail among others.
The level of energy intensity in Belarus, calculated by measuring the consumption of energy per unit of Gross Domestic Product (GDP), is twice the level of OECD (Organisation for Economic Cooperation and Development) countries and almost 2.5 times higher than the average in the European Union.
Despite improvements over the past 15 years, production in Belarus remains energy intensive with many inefficient and environmentally damaging technologies still being used. Industry accounts for 45 per cent of total electricity consumption, as well as being the main consumer of natural gas.
“It is an honour for MTBank to be the first partner bank in a pilot project of the EBRD “Belorussian Sustainable Energy Finance Facility (BelSEFF), says Andrey Zhishkevich, Chairman of the Board of MTBank. “This is a new stage of development of a long-term fruitful cooperation between the esteemed international financial institution and our bank”.
The new line, despite the global financial crisis, will preserve for Belorussian companies access to foreign funding. Moreover, this is an important step in supporting Belorussian private business, because it will help many clients of MTBank, representatives of small and medium-sized enterprises, to reduce power intensity and thus to become more competitive.”
Financing sustainable energy investments is one of the EBRD’s core priorities spelled out in the Bank’s Belarus country strategy.