IMPROVING ENERGY EFFICIENCY FOR THE LOW INCOME HOUSING SECTOR

IN MACEDONIA

Habitat for Humanity MacedoniaSkopje/Geneva

April 2013

SITUATION ANALYSIS

Increasing poverty • 31% lived below the national poverty line in 2010

Poor maintainance of the housing stock in collective apartment buildings

• 35% of the residential buildings have only recently registered homeowner association

• At least 100,000 housing units in need of EE intervention Raising energy prices

• Macedonian households pay three times less for electricity than EU average, up to 100% less than SEE countries

• Full price liberalization is expected by 2015 High levels of CO2 emissions

• 5.5 metric tones/capita, higher than any other SEE country Low level of awareness & poor regulatory framework

KEY CONSIDERATIONS

Energy consumption of the Macedonian residential sector is high, unaffordable, environmentally degrading and inefficient

Until recently the decay of homeowner association has not been addressed in any serious fashion

EE regulatory framework and supporting mechanisms still under development

National EE Strategy and the corresponding Actions plan provide no instruments/incentives for homeowners to take measures to improve the efficiency of their homes

Investing in improvement of collective housing and residential energy management has not been identified as business opportunity

LONG TERM GOALS

Decrease the households energy consumption in the structure of the final energy consumption by sectors

Decrease the consumption of electricity in the structure of households’ overall fuel consumption

Decrease the energy consumption on heating in the structure of households overall energy consumption

PILOT PROJECT

Residential Energy Efficiency as Social Safety Net Tool - USAID through IRG, along with SEVEn, TimelProject and Habitat for Humanity

Develop systematic information and experience: costs and benefits, household behavior, institutional issues (legal/regulatory, implementation, homeowners associations)

Research/demonstration effort, not a sustainable model

PROJECT OBJECTIVES

A. Develop and test market-based models for energy efficient upgrades in collective apartment buildings

B. Improve management of collective apartment buildings

C. Facilitate investment, entrepreneurship and job creation on energy efficiency

D. Foster a broad-based societal platform that affirms energy efficient consumption of clean energy and advocates for efficient and targeted state involvement in the housing sector

FINANCIAL MODELLING & EE UPGRADES

Objective A:Develop and test market-based models for energy efficient upgrades in collective housing units• Selection of 30 buildings in 7 major cities to carry EE

interventions• Development of financing models• Networking and capacity building of an EE investor

forum• Energy audits carried in 30 buildings (pre and after

intervention) • Establishment of a EE Revolving Fund, criteria and

process• EE renovation of selected buildings

EE REVOLVING FUND

Habitat for Humanity as interlocutor in securing capital and funding sources for the low-income housing sector in Macedonia

Initial funding:• USAID • MFI Moznosti• Habitat for Humanity

Other socially motivated investors invited to join the Revolving fund

HFH

MK

Allocation

(terms & conditions)

MFICo

oper

ative

Agr

eem

ent

Loan (terms & conditions)

ESTABLISHING THE REVOLVING FUNDU

SAID

OTHER INVESTORS/CREDITORS

Lending model 1

EE Interventions

Lending model 2

Lending model 3

Lending model 4

EE REVOLVING FUND

LG grant

MoU

REVOLVING FUND

Loan INTERMEDIARY (HOA, Company) or INDIVIDUAL HOMEOWNERS

Intervention completed (families served)

Building/family selection

Intervention Supervising

MUNICIPALITY

Supervising

Grant/loan

FINANCING MODEL 5

EE INTERVENTION COMPLETED

HOUSING MANAGEMENT

Objective B: Improve management of collective housing units

• Supporting HOAs in selected buildingso Developing capacity for selection of companies for

EE interventionso Criteria for HOA’s creditworthiness assessment

• Establishing and building capacities of the Tenants Association Resource Center (TARC) o Web based resources, including best practices,

databases and manuals for HOAo Exploring TARC’s long-term sustainability options

INVESTMENT & JOB CREATION

Objective C: Facilitate investment, entrepreneurship and job creation on Energy Efficiency (green jobs)• Promotion of business opportunities in EE sector o Researching EE and green jobs opportunities, regional

and national o Capacity building, modeling and supporting ESCO in

operations and service delivery • Education, training and business opportunities in EEo Vocational trainings for young construction workers,

high-school students, energy service companies and micro-entrepreneurs

o Promotional events aimed to generate interest

SOCIETAL PLATFORM ON EE

Objective D: Foster a broad-based societal platform that affirms energy efficient consumption of clean energy and advocates for efficient and targeted state involvement in the housing sector• Establishing and supporting platform of relevant

stakeholderso SAG objective: Convening mechanism for legislators,

public administration/local government, business, civil society, media, international organizations

• Public awareness, advocacy and lobbying campaigns o Workshops with municipalities and ministrieso Harmonization of the legislation (Housing Law and

Construction Law)

Financial modelling

Investment & job creation

Housing management

AdvocacyAwareness

Construction companies

Individual homeowners

Financial institutions

Homeowners’ associations

General public

High school students

Unemployed workers

Entrepreneurs/employers

Government: central/local

LoanConstruction

TrainingCapacity dev.

TrainingAdvocacy

Societal platform

PROJECT BENEFICIARIES

Testing vs. Implementation of financing models• Simultaneous: risky• Consecutive: limited time frame

Sustainability/replicability of models and practices Context change

• Favorable• Unfavorable

Lack of mechanisms in reaching consent of homeowners Awareness: Skopje vs. Macedonia average Dependence on municipal procedures and funding:

• Uncertainty with the political will/decisions• Uncertainty with the availability and procedure for matching

funds• Municipal prioritization in buildings selection• Construction permits/approvals issue

MID-TERM REVIEW: FY12 LESSONS LEARNED