Energocredit

 EnergoCredit is the name of a scheme that provides loans through several Georgian banks to help Georgian businesses make investments in energy efficiency and renewable energy projects. The funds come as a credit line for 35 million USD from the European Bank of Reconstruction and Development (EBRD) to the banks.

 EnergoCredit is a scheme that was set up by the European Bank of Reconstruction and Development (EBRD) to help Georgian businesses become more competitive by investing in energy efficiency and renewable energy so as to reduce their production costs.

 Energy is as necessary for production as labour, capital, and raw materials. Without it we can’t produce anything. We need to provide electricity for lights, power, motors, automation and conveyor belts to move things around the factory. We need to provide gas or oil for heating in boilers, furnaces and ovens. We need steam for heating and sterilising. We need compressed air to use pneumatic tools and controls. We need hot air for drying.
 
In all these activities, not all the energy which goes in can be used productively. Sometimes there are scientific reasons for this, and sometimes energy is being wasted needlessly: for example it might be delivered when and where it is not needed, or delivered through leaking pipes. The EU decided in 2006 to save 20% of energy by 2020.
 
Energy efficiency means using energy in such a way that as little as possible is wasted. For more information on what the EU is doing for energy efficiency please go to the link: http://ec.europa.eu/energy/efficiency/index_en.htm 

Renewable energy uses resources which are naturally replenished, such as sunlight, wind, and geothermal heat. Renewable energy technologies range from solar power, wind power, hydroelectricity (including small hydro plants), to biomass and biofuels for transportation.
 
In 2006, about 18 percent of global final energy consumption came from renewable sources, with 13% coming from traditional biomass, like wood-burning. Hydropower was the next largest renewable source, providing 3%. The technical potential for their use is very large, exceeding all other readily available sources.
Renewable energy technologies are sometimes criticised for being unreliable or unsightly, yet the market is growing for many forms of renewable energy. Governments and the EU are using renewables to reduce their CO2 emissions instead of burning coal and oil. This helps to reduce climate change.
EU countries have been set legally binding targets for the use of renewables for electricity generation and for biofuels in transport. By 2020 they are aiming to have 20% of energy used come from renewable sources.
To help achieve this target, many countries have offered financial incentives to encourage businesses and households change to renewable sources of energy.
For more information on what the EU is doing on renewables click here: (link to: http://ec.europa.eu/energy/res/index_en.htm)

Georgia has few energy resources of its own and is reliant on energy imports from its neighbours. Using renewable energy such as hydro electricity and solar water heating reduces the demand for imports and makes Georgia’s energy supply more secure. Although the investment costs for renewable energy are higher, once the investment costs are made, the energy is free. Using renewable energy also helps to reduce climate change.

The Georgian Energy Efficiency Programme is the programme that implements EnergoCredit. A team of international consultants have been provided by EBRD to assist the banks to understand the technical and financial aspects of the projects and to assist the clients to develop good projects.

All private sector organisations are eligible for EnergoCredits.
 
However, there are restrictions on some companies eg those producing tobacco products, strong drink and also on some companies or projects which might breach international conventions, particularly on the environment. A full list is available from GEEP.

 
At the moment there are three banks: TBC Bank, Bank of Georgia and Cartu Bank. In the future more banks may join.
 
For more information about the banks click here
 

In order to qualify for a credit, an applicant company must already have or be willing to open a bank account with a Participating Bank and the bank must accept that the company is creditworthy for the loan in question.
From a technical viewpoint the investment proposed under the project must result in sufficient energy savings to repay the loan over an acceptable period (between 1 and 5 years).
The Programme does not subsidise or influence the lending conditions required by Participating Banks. While the loans are expected to be competitive on the local market, the loan conditions are based on standard commercial practises that reflect a number of aspects of the bank-client relationship, including client creditworthiness and the risk of the investment. The GEEP consultants work with the local bank and their client to minimise the risk, and to develop a good project.
Minimising the risk allows the bank to offer a lower interest rate, reduce the amount of collateral, or offer a longer or larger loan than usual.

The upper limit for loans is 2.5 mill USD. Under certain circumstances, bigger loans could be considered. There is no lower limit to the size of the loan, unless banks set a limit for their own administrative purposes.

The loan is paid back from either energy savings following the investment, or by income from increased production following the investment. GEEP consultants help clients to understand and calculate the savings or increased income. They provide calculations justifying the payback of the loan, so that the bank is willing to lend.

The equipment is chosen by the client according to their own technical requirements and availability of equipment. GEEP may make recommendations on value for money or the availability of more modern equipment or technologies, to ensure that the energy efficiency is maximised.
 
The loan can also cover the installation costs and any detailed engineering design before installation.

 
We are hoping that up to 5 banks will eventually join EnergoCredit. Till then, the current banks are lending to new customers provided they are creditworthy.
 

Getting a loan should not be difficult if you know what you want to do, have researched it well, and have all the information ready for the bank and GEEP to check.
 
The bank will need information on past income and expenditure and future plans (a full business plan is not needed). GEEP consultants will need information on exactly what is proposed (replacement of boiler, low energy lighting), plus details of the equipment proposed, together with detailed information on payments and meter readings for energy. In some cases more detailed information on production output will be needed.
 
The GEEP team can always be consulted free of charge before submitting a project to a bank, in order to discuss what is needed.

Energy audits can sometimes be provided when a large loan is under consideration with a bank. It is not possible to get an audit just on its own.
 
When a company wants to review its whole technological process and not just replace a component, it may be helpful to have an energy audit to establish exactly what problems exist and understand exactly what may be the best solution. For example, the client may think the problem is that the boiler is old and energy inefficient. However, an audit may reveal a number of other problems: that the boiler is too far from the load, and should be relocated to reduce pipework losses; the pipework itself is badly insulated; the condensate could be returned, saving water and treatment; the heat from the condensate could be used to warm other water supplies, saving boiler output etc.
 
Not all these measures will need big investments, some may just need better “housekeeping” or changes in behaviour. But overall the client may achieve better results and pay back a loan quicker than just replacing one piece of equipment.
 
An energy audit requires more detailed information from the client and more work by the consultant. Although it is still free, the number of audits that can be offered is therefore limited.

* On site co-generation of heat and electricity
* Rehabilitation of boilers (enhanced controls, economizers, improved insulation, regenerative burners, automatic blow-down, etc.)
* Replacement of old gas boilers with condensing boilers
* Switch from electricity heating for fuel based direct heating
* Process improvements including enhanced controls
* Rehabilitation of steam distribution systems: installation for steam traps, increased condensate recovery, etc.
* Installation of heat recovery from processes (e.g., installation of economizers for pre-heating purposes, heat recovery for space heating, heat recovery for drying, etc.)
* Installation of absorption chillers
* Installation of new chillers
* Installation of Variable Speed Drives on selected electric motors
* Rehabilitation of compressed air systems (e.g., decentralisation and/or resizing of air compressors, replacing of old air compressors with new efficient ones)
* Rehabilitation of power distribution systems (e.g., replacement of old or oversized transformers, installation of capacitors to reduce reactive power consumption, etc.)
* Implementation of Energy Management Systems (“EMS”) or Building Management Systems
* Implementation of energy saving and renewable energy measures in the built environment (e.g. insulation of walls, roofs and floors; installation of rolling doors; installation of new windows; installation of new heating and ventilation systems; installation of high energy efficiency lighting; etc)

* Wind farms
* Run-of-river hydro plants less than 10MW
* Solar water systems generating hot water for processes and/or heating
* Biomass systems generating heat only or heat and electricity
* Gas engines using biogas
* Diesel engines using biodiesel
* Geothermal heat pumps

Yes, but the conditions are different.  See the section of the website for residential loans.