Eastern EuropeEnergy Efficiency &

Environment Partnership

E5P

A fl agship multi-donor fundto support energy effi ciency

and environmental investmentsin the Eastern Partnership region

Germany

European Union

Ukraine

Armenia

Moldova

Czech Republic

Denmark

Lithuania

Norway

Romania

Slovak Republic

Sweden

USA

Estonia

Poland

Finland

Iceland

Latvia

Contributors

&

23 4

4

Belarus

Ukraine

1

1 Moldova 2 Georgia 3 Armenia 4 Azerbaijan

GeorgiaGeorgia

Participating Implementing Agencies

Eastern Europe Energy Effi ciency and Environment Partnership The E5P is a €168 million multi-donor fund initiated during the Swedish Presidency of the European Union in 2009 to encourage municipal investments in energy effi ciency and environmental projects in the Eastern Partnership region. Initially active in Ukraine, in 2014 the fund formally extended its activities to Armenia, Georgia and Moldova and will also endeavour to operate in Azerbaijan and Belarus.

The E5P merges fi nancial contributions from the European Union and a group of 18 nations, including countries which are benefi ting from the fund. The contributions are used as grants to support municipal sector projects. The projects approved for implementation in Ukraine have shown that the E5P grants can leverage on average investment volumes that are fi ve times the size of the committed grants. The grant allocations are fl exible and recognise priorities of each recipient country with the overall aim to reduce energy use, pollution and greenhouse gas emissions. The fund also supports policy dialogue and regulatory reform.

What is E5P?

The story so far

E5P initiated under Swedish

Presidency of the EU.

Mid-2009

Pledging conference attracts over €90 million

of contributions for Ukraine.

November 2009

Fund rules are approved and E5P is formally established.

November 2010

Financial resources of E5P

Total fund €168m

Total percountry windowContributions

Own contribution

€10m

€1m

€1m

€1m

€108m

€20m

€20m

€20m

€98m

€19m

€19m

€19m

Ukraine

Armenia

Georgia

Moldova

Pledging conference secures €60 million

of contributions for Armenia, Georgia

and Moldova.

October 2013

A total of 14 projects approved for Ukraine. Country windows set

up for Armenia, Georgia and Moldova.

July 2014

Project implementation in Ukraine and pipeline

development for Armenia, Georgia and Moldova.

2015

E5P

The Assembly of Contributors is the main governing body for E5P. Its members incorporate all the contributors to the E5P including the recipient countries. The Assembly approves grant allocations to projects and decides on the fund’s overall strategy and guidelines. There is usually one annual meeting of the Assembly hosted by the EBRD and chaired by the largest contributor to E5P, which is currently the European Union.

The Steering Group, consisting of the recipient countries and the Implementing Agencies, has the task to develop and make project proposals for approval by the Assembly. There are several Steering Group meetings a year – either joint or country specific.

The EBRD acts as the fund manager of E5P providing administrative support to manage the fund on behalf of all the stakeholders.

Governance structure

How E5P worksThe E5P participates in projects as a co-financier. The grants from E5P are used as an incentive for municipal clients to take loans provided by participating Implementing Agencies:

n Council of Europe Development Bank (CEB)

n European Bank for Reconstruction and Development (EBRD)

n European Investment Bank (EIB)

n International Finance Corporation (IFC)

n KfW

n Nordic Environment Finance Corporation (NEFCO)

n Nordic Investment Bank (NIB)

n World Bank (WB).

Pledges to E5P (Ukraine) in 2015

The initial focus of the fund has been energy efficiency in Ukraine. According to a recent report by the International Energy Agency, Ukraine uses around 3.2 times more energy per unit of GDP than the average in OECD countries. This is because of a high concentration of energy-intensive sectors, inefficient district heating systems, old industrial processes and the poor quality

of building stock. Owing to insufficient investment in the district heating systems, more than half of the input fuel is wasted.

Based on pledges of €108 million, the E5P contributors have approved over 15 projects so far including modernisation of district heating networks, upgrading of water and wastewater systems, and measures to improve energy savings in public buildings. Other projects to improve energy efficiency in the residential sector and use of renewable sources of energy are being prepared. For the district heating investments, the E5P grants focus on individual heating substations to enable the residents to control their heat supply. It is estimated that the currently approved E5P projects for Ukraine will collectively reduce CO2 by more than 536,103 tonnes per year and achieve gas savings of 120 million of m3 per year.

in Ukraine – progress so far

E5P

Denmark 5,238,428

Contributor Pledged (€)

Estonia 160,000EU 40,000,000Finland 2,000,000

Germany 11,000,000

Total €108,090,673*

Iceland 56,842Latvia 85,000Lithuania 28,962Norway 5,897,916Poland 915,106Sweden 27,383,419Ukraine 10,000,000USA 5,325,000

*Of which €95.3 million has been paid in cash.

Examples of E5P projects in Ukraine

E5P

Typical investments include:

• modernisation of drinking water and wastewater treatment plants

• rehabilitation of pumping stations, distribution and collection networks

• remote monitoring and control systems (SCADA)

Mykolaiev water and wastewater rehabilitation: total cost €40m n €15.54m EIB loan and €5.1m E5P grant

Water and wastewater treatment rehabilitation

Typical investments include:

• installation of individual heating substations

• thermal insulation of buildings (roofs, walls, pipes, replacement of windows), modernisation of lighting system

Energy effi ciency in public buildings in Dnipropetrovsk based on Energy Service Companies (ESCOs): total cost €22.5m n €20m EBRD loan and €2.5m E5P grant

Performance contracting of energy effi ciency measures in Kiev public buildings: total cost €9.3m n €5m NEFCO loan and €1.5m E5P grant

Zhytomyr energy effi ciency in public buildings: total cost €4.7m n €3m NEFCO loan and €1.35m E5P grant

Energy effi ciency in public and residential buildings

Typical investments include:

• installation of individual heating substations and metering

• investment in district heating processes

• combined heat and power plants

• introduction of bio-fuel boilers, modernisation of boiler houses, new pumps with variable speed controls

• replacement of network sections with pre-insulated modern pipes

• introduction of remote monitoring and control systems (SCADA)

Zhytomyr DH: total cost €16m n €10m EBRD loan and €5m E5P grant

Ternopil DH: total cost €16.1m n €10m EBRD loan and €5m E5P grant

Zaporizhzhya DH: total cost €8.6m n €6m EBRD loan and €2m E5P grant

Lviv DH: total cost €34.3m n €20m EBRD loan and €10m E5P grant

Lutsk DH: total cost €16.9m n €10m EBRD loan and €4m E5P grant

Severodonetsk DH: total cost €7m n €4m NEFCO loan and €2m E5P grant

Poltava DH: total cost €29.5m n €15m EBRD loan and €5m E5P grant

DemoUkraina DH Programme: total cost €20m n €8m NEFCO loan and €0.9m E5P TC grant

District heating rehabilitation

E5P Azerbaijan

At present, Azerbaijan fulfi ls 100% of its energy needs through domestic production. Nevertheless, the country’s economy is the

most energy intensive in the region. The residential sector is responsible for 43% of the total fi nal energy consumption. The key sectors for Azerbaijan are: energy effi ciency measures in buildings, water and wastewater treatment

and solid waste management.

BelarusCompared with the EU average, the energy

intensity of Belarus is about 1.8 times higher. The main consumers of heat are

industries (47%) and residential households (33%). Imports of fuel and energy are

around 85% of the total consumption of primary energy resources. Top priority

investments include district heating modernisation and renewables.

Along the pipeline: benefi ts for the Eastern Partnership countriesThe Eastern Partnership countries have enormous potential to benefi t from the E5P fund. Investments in energy effi ciency promoted by the E5P will reduce costs, improve security of energy supply, stimulate growth and protect the environment.

With €60 million mobilised for Armenia, Georgia and Moldova, the E5P Implementing Agencies are developing a project pipeline in consultation with national authorities and clients. The fund is also open for activities in Azerbaijan and Belarus.

Energy effi ciency potential in the Eastern Partnership countries

Azerbaijan

E5P

E5P

Moldova The level of energy intensity per capita in Moldova exceeds three times the EU average. With few natural energy resources, Moldova imports almost all of its energy supplies. The main energy consumer is the residential sector (44%) followed by transport (18%) and industry (13%). The main sectors for investment are district heating, public and residential buildings and renewable sources of energy.

GeorgiaThe average energy intensity in Georgia is about 2.5 times higher than in the EU countries. Imported oil and gas account altogether for about 70% of its primary

energy requirements. Georgia has vast resources of almost all types of renewable energy and untapped potential to save energy in its building stock. Waste management

and public transport also offer vast investment opportunities.

ArmeniaArmenia’s energy intensity is approximately 2.6 times the EU average. Natural gas accounts for 50% of the total energy consumption in Armenia and comes from imported sources. A recent World Bank study has found that Armenia could save close to 5% of its GDP by investing in energy effi ciency. Water, wastewater and solid waste management are top priority sectors.

Armenia’s energy intensity is approximately 2.6 times the EU average. Natural gas

The sectors most likely to benefi t from the E5P fund are:

n district heating modernisation

n energy effi ciency in public buildings (schools, kindergartens, hospitals)

n energy saving measures in residential housing

n renewable energy (including new markets such as biomass)

n street lighting

n water and wastewater treatment

n solid waste management

n urban transport.

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buildings and renewable sources of energy.

c/o European Bank for Reconstruction and Development (EBRD)One Exchange SquareLondon EC2A 2JN United KingdomTel: + 44 20 7338 6000Fax: + 44 20 7338 6848www.E5P.eu

Get in contact

E5P