NIF EAST 47: E5P Expansion to other Eastern Partnership Countries

E5P aims to reduce CO2 and other greenhouse gas (GHG) emissions by financing projects that boost energy efficiency and/or reduce losses (water/energy) and that thereby improve the environment. The E5P investments are financing measures to improve existing infrastructure with a view to reducing energy consumption and other operating costs. This is expected to create the conditions that allow for institutional reforms such as consumption-based billing and that help increase people’s motivation to save energy. The areas of focus include district heating rehabilitation, energy efficiency measures for the public, residential buildings and public transport, street lighting and upgrading wastewater treatment facilities and solid waste. The initiative is being implemented through a support fund managed by the EBRD. This will allow for harmonised and effective delivery of international financial support over several years by pooling grant contributions from a group of donors and beneficiaries.The activities are closely coordinated with the activities within the EU Covenant of Mayors’ carbon dioxide gas reduction initiative (as has already been done in Ukraine) and the EU’s regional energy cooperation programme INOGATE but also with the activities within the EIB-led Municipal Project Support Facility (MPSF) project. The NIF grant support allows municipalities and utilities to meet high service or environmental standards while respecting affordability constraints. Full cost recovery at desired environmental standards (e.g. EU standards) would require tariff to be set above accepted norms in relation to average incomes. Furthermore, irrespective of average fee ratios, without the grant the municipality may not be capable of protecting low income households whilst making utilities commercially viable. Finally, the grant facilitates the implementation of important environmental projects despite severe shortages of public money due to sovereign debt constraints