The FINANCIAL — Paying less tax bills, getting money from thin air, getting electricity in your home for less money every month, heating the house in winter with twice less expenses and saving your budget from utility bills – does that sound exiting? Energy efficiency technologies help individuals save money in their household budgets.
“By constructing a new building with energy efficient building blocks, energy consumption of the heating system can be reduced by about 50% during one season of heating”, Karina Melikidze, Director of the Sustainable Development and Policy (SDAP) Centre, says.
“In other words this means that indoor climate conditions will remain comfortable but fuel (mostly natural gas) consumption needed for the operation of a heating system during one season, will be halved,” she says.
“Energy efficiency investments can help industrial companies to reduce energy consumption while improving the production process. Benefits can also be gained through environmental improvements and from the demonstration effect on the business community,” Irakli Vardigoreli, EBRD Energy Efficiency Business Development Manager says.
“It is known that energy efficiency means use of innovated technologies that reduce the amount of energy by providing the same amount of services. By installation of energy efficient technologies Georgian companies can reduce operational energy consumption costs and contribute to environmental protection,” declared Melikidze.
Energy efficient technologies can be divided into different groups based on investment costs.
“Almost all business companies as well as other customers, recognized the advantages of double glazed metal and plastic windows and innovative boilers as well as heating systems, thus these technologies are widely adopted, since they are rather simple, cheap and easy to install and maintain,” said Melikidze.
“Other technologies that relate to some risk factors associated with the absence of the energy efficiency law are used rarely. Still there are examples of advanced construction companies like: “Arci”, “Eurobuilding” and other private companies that have already constructed new buildings from the energy efficient construction materials in Tbilisi and Bakuriani,” Melikidze added.
“More than ever, companies are facing increased competitive pressures to produce high quality products at comparable or lower cost. In many of the Bank’s countries of operations, energy prices are now close to international levels. Hence, where energy is a significant cost component, companies will need to bring energy costs in line with the best practice standards,” declared Vardigoreli.
Moreover, according to Melikidze, the local hospital sector is becoming interested in modern energy efficiency applications, especially in energy auditing, in order to define the optimum parameters of building construction and maintenance bearing in mind minimization of energy expenses while maintaining the most appropriate indoor climatic conditions.
“Installation of solar panels is considered one of the ways to safeguard incessant independent energy supply for the sensitive medical appliances they use. For instance there may be named the Otar Gudushauri National Medical Centre, Cell Technology and Therapy Centre, Joe Ann Medical Centre,” Melikidze added.
Energy efficiency loans are now accessible for corporations as well as for physical individuals in Georgian banks.
EBRD has provided a 35 million USD credit line to the banks for loans to cover investment in replacing old equipment such as boilers, compressors, fans and pumps, with new equipment which uses less energy. Loans are available up to 2.5 million USD.
“Energy saving provides extra income for the firm to pay back the loan. After the loan is paid back, the firm has reduced its costs and will become more efficient, and profitable,” declared Vardigoreli.
As Vardigoreli declares, many of EBRD’s energy efficiency investments are in projects where energy efficiency is not the sole objective but forms a significant component of the project.
“The Bank’s strategy in the energy efficiency sector is to finance energy-saving projects and assist its clients in identifying and developing energy efficiency opportunities within their existing operations.
EBRD has recently established the Georgian Energy Efficiency Programme – a credit line facility through local participating banks. The local banks provide sub-loans to companies and households for investment in renewable energy production and improved energy efficiency.
EBRD has already signed credit lines in Georgia with TBC Bank – 10 million USD, Cartu Bank – 5 million USD, Bank Republic – 5 million USD, and Bank of Georgia – 10 million USD.
“In residential loans we have only one participating Bank – TBC Bank, who has already extended 100 sub-loans on this programme. The average size of the loan is 250,000 USD per borrower. The most popular energy efficiency components in the loans are: changing boilers and the individual heating system, double glazed well insulated PVC windows and solar water heaters, and then general insulation,” said Vardigoreli.
“99% of submitted applications have received 15% subsidy from BP and their co-ventures, in short the individual investment cost is reduced by 15%,” added Vardigoreli.
The total amount of physical individual loans for energy efficiency is more than 150,000 USD at TBC Bank. There are 150 physical individuals who have taken out this loan.
“Energy Credit represents a loan which will support clients in purchasing energy efficiency technologies such as double glazed windows, central heating systems, boilers and insulation,” declared Nino Buzhgulashvili, Sales Department Product Manager at TBC Bank.
“The main advantage of the project is that the lender during the purchase period gets 15% of the total cost back,” Buzhgulashvili added.
The most common purpose of loan taking among TBC Bank’s clients, is for central heating and windows.
For obtaining energy efficiency loans the lender in the early stage should present the provider company’s invoice of the product. The provider company should be authorized on the energy credit web page www.energocredit.ge.
“Lending of an energy efficiency loan is available in all branches of TBC Bank. Distribution is available as mortgage and consumer loans with the following interest rates: Consumer loan fixed 20% interest rate, and mortgage loan 1% less than a standard loan,” declared Buzhgulashvili.
Cartu Bank has already distributed a total amount of 1,780,000 USD energy efficiency loans to 6 corporations. The major purposes of loan taking are thermal insulation, double glazing, gas boilers, heating and cooling systems, and hydro power plants.
“EBRD provides TA i.e. Energy auditors help the borrowers to work out an energy efficient project. They make financial calculations and write the Project Assessment Report. Based on the latter EBRD approves the amount of the loan. The interest rate for EE loans is 1% lower than the current Average Market Rate,” said Inga Gagnidze, IFI Relations Officer at Cartu Bank.
“EBRD’s Energy Efficiency and Climate Change Team includes specialist engineers that deal exclusively with industrial energy efficiency. EBRD’s specialists work with project teams and with clients to identify energy saving opportunities. These opportunities are then developed for inclusion in the client’s investment programme. All Bank clients are eligible for this service. The only requirements are that there are potential energy savings and that the client is committed to realising this potential,” said Vardigoreli.
“To help Georgian households reduce their energy bills and consumption, the Bank promotes residential energy efficiency investments through the acquisition and installation of more efficient equipment, appliances and materials than might otherwise be used,” said Vardigoreli.
“As more than 90% of housing in Georgia is privately owned and the majority of this, especially in urban areas, consists of multi-apartment buildings that provide poor levels of energy efficiency. Utilization of higher performing equipment and materials with enhanced standards tend to require a higher up-front investment (have longer payback periods) but deliver superior economical and environmental benefits over the lifetime of the measure,” Vardigoreli, EBRD told The FINANCIAL.
“By supporting households with technical advice and making funding for energy saving investments more available, the Bank can encourage home owners to make the transition from investing in underperforming, low quality equipment and materials, towards better performing, more efficient products, in line with current EU-standards, that will deliver greater benefits throughout their lifetime. Loans are provided to all eligible applicants wishing to improve the energy efficiency of their premises, including micro and small businesses,” declared Vardigoreli.
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