The FINANCIAL — Pay less, save money, heat and light your house for twice as less. This is possible and can even work for businesses.
The key is primarily in installing energy efficient technologies which are mutually beneficial for your wallet and the environment you live in. By installation of energy efficient technologies Georgian companies can reduce operational energy consumption costs and contribute to environmental protection. Read the following article to find out how.
The energy efficiency technologies include: the most widespread and easiest to apply energy efficient light bulbs with occupancy sensors as well as condensing boilers for heating, heating systems with thermostats which allow regulation of room temperature, double glazed windows etc.
“Through the application of energy efficiency measures, it is possible to reduce energy consumption without sacrificing comfort, which often happens when someone tries to reduce energy consumption simply by saving,” said Karina Melikidze, Director of the Sustainable Development and Policy (SDAP) Centre.
“For instance a family can reduce the amount of energy used for lighting purposes by sitting together in one room and switching off the electricity in all the others, but it can also install energy efficient (fluorescent) bulbs and keep electricity on in all the rooms spending no more (maybe even less) electricity than before without causing inconvenience. In the case of a company one can for instance also apply so-called “occupancy sensors”, which allow electricity to be switched on only if someone is present in the room,” said Melikidze.
“By constructing a new building with energy efficient building blocks the energy consumption of a heating system can be reduced by about 50% during one season of heating. In other words this means that indoor climatic conditions will remain comfortable but fuel (mostly natural gas) consumption needed for operation of the heating system during one season will be halved,” added Melikidze.
“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,” said Irakli Vardigoreli, EBRD Energy Efficiency Business Development Manager.
Melikidze believes that together with saving money and energy for the company, this also aids the reduction of CO2 emissions; depending on the type of the company’s operations this reduction may be direct and significant.
“Energy efficient technologies allow one to save energy and money in the medium to long run, however initial one-time investments may be hard to come by, thus such loans are playing a significantly positive role in the promotion of energy efficiency,” Melikidze said.
Energy efficiency loans are now accessible for corporations as well as for physical individuals in Georgia from TBC Bank, Bank of Georgia and Cartu Bank, the three leading profitable banks in Georgia according to the first quarter results of 2011.
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 of up to 2.5 million USD.
“The 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,” said Vardigoreli.
“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. Via its loans EBRD also helps companies to develop carbon credits arising from emission-reduction projects. This improves the bankability of emission-cutting projects,” Vardigoreli added.
EBRD has 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.
Companies will have the opportunity to use a credit line for different purposes such as boilers rehabilitation/change, energy management, saving distribution and installation/rehabilitation of accounting systems, rehabilitation of stream distribution systems, installation of solar technologies, and rehabilitation of small hydro-power stations.
For obtaining energy efficiency loans the lender should in the early stage present the provider’s invoice of the product. The provider should be authorized on the energy credit webpage www.energocredit.ge.
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 this loan. The major purpose of loan taking among TBC Bank clients is for central heating and windows. The main advantage of the project is that the lender gets 15% of total cost back during the purchase period.
Lending of an energy efficiency loan is available in all branches of TBC Bank. The distribution is as 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.
EBRD has provided Bank of Georgia with a 10 million USD credit line for financing energy efficiency. Despite the advantages of saving energy and increasing market competitiveness, and as well as profitable loan terms companies have the opportunity to conduct an energy-audit free of charge. The terms of the loans are 10% annual with total loan capacity of 2.5 million USD, with a term of 12-60 months.
The consumer loan will be given out with an interest rate from 14%. Moreover the borrower has the opportunity to return 15% of the total cost which presents a subsidiary financed by BP and its oil and gas partner companies (Socar, StatoilHydro, Chevron, INPEX, TPAO, ExxonMobil, ITOCHU, AzBTC Ltd., Total, Amerada Hess, Lukoil, NICO, ENI and ConocoPhillips).
The term of loans in GEL is under 36 months and in USD under 120 months. The amount of the loan is up to 50,000 GEL at Bank of Georgia.
Cartu Bank has already distributed a total amount of 1,780,000 USD worth of energy efficiency loans to six corporations. The major purposes of loan taking are thermal insulation, double glazing, gas boilers, heating and cooling systems, hydro power plants. The Bank does not provide loans for physical individuals.
“EBRD provides TA i.e. Energy auditors help the borrowers to work out an energy efficient project. They make financial calculations and write a 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,” explained Inga Gagnidze, IFI Relations Officer at Cartu Bank.