The truth is that energy efficiency of residential sector has finally gained more attention among the key EU stakeholders. It became clear that the building sector is critical for achieving EU’s environmental goals. However, as we pay more and more attention to this issue, investment gaps in residential sector financing of energy efficiency are becoming increasingly evident. One among many financial support mechanisms aiming at the residential sector are grants. Speaking about the existing gaps, these are not an exemption. On November 18, 2021, the Energy Community therefore organized a Workshop on financing energy efficiency in residential sector. Participating experts aimed to explore the state of energy efficiency measures in the residential sector with respect to financing.
Energy Community: Who are they?
With the aim of establishing a stable Pan-European energy market, in October 2005, the European Commission has signed the Energy Community Treaty establishing a new international organization, the Energy Community.
The main objective of this organization is to extend the EU energy acquis to countries in South East Europe, the Black Sea region and beyond. In doing so, the Energy Community seeks to improve the environmental situation, enhance economic development, and strengthen social stability across the region.
Recently, on November 30, 2021, the Energy Community held its Ministerial Council, where it adopted five key legislative acts towards the implementation of the Clean Energy for all Europeans package. At the next Ministerial Council planned for 2022, the Energy Community will adopt renewables, energy efficiency and greenhouse gas reduction targets for 2030.
Energy Community in Action: Workshop on Financing Energy Efficiency in the Residential Sector
To foster the dialogue, Energy Community actively engages the stakeholders from the field on numerous occasions. On November 18, 2021, the Energy Community organized a Workshop on financing energy efficiency in the residential sector. Above all, the energy crisis has proved that integration of small isolated markets at pan-European level is crucial. Stable environment for financing and investment decisions is key to boost energy performance of buildings that is institutionally anchored in the EU´s Energy Performance of Buildings Directive and the Energy Efficiency Directive.
Therefore, the workshop brought together speakers from various organizations and institutions who shared their insightful expertise. The main topic of their discussion was allocation and share of grants as financing tools to reach energy efficiency targets. Moreover, they also talked about different possibilities of other scaling up elements of renovations.
Voices of Experience and Expertise
Among others, Tamara Babayan from the World Bank and Set Landau from the consultant firm Eco ltd. presented the findings of their extensive “Residential Energy Efficiency Market Analysis in the Western Balkans”.
Nora Cimili, Energy Efficiency Specialist from the Millennium Foundation Kosovo (MFK) presented about Pilot Subsidies on Energy Efficiency in Kosovo, that are part of Reliable Energy Landscape Project implemented via Kosovo Threshold Program that is funded by Millennium Challenge Corporation (MCC) – an agency of the US government.
How to make lending to homeowner associations attractive?
Habitat for Humanity International was honored to participate at this workshop as well. Gyorgy Sumeghy, Associate Director, Policy and Advocacy, presented about financing gaps that exist in the housing sector of Western Balkan countries.
In these countries, homeowners associations (HOAs) of multi-apartment buildings are perceived as extremely high-risk targets of lending by banks. As Gyorgy explained, the reasons for such a restrained perspective of banking sector are various. They include limited availability of financing products, restricted institutional capacities, or viability of lending. As a result, in Western Balkan countries, lending to HOAs is insignificant, if not non-existent. Gyorgy talked about all the key gaps in banking and introduced specific recommendations for:
- Policy reforms
- Technical assistance, institutional support and capacity building
- Raising awareness and promoting the concept of commercial financing for HOAs
- Introduction of mechanisms for commercial financing support
If interested to find out more about these, you can read the full analysis prepared by our experts here: “Gap Analysis of the Housing Sector in Western Balkans: Bosnia and Hercegovina, Kosovo, North Macedonia and Serbia vs. Slovak Republic”.
To find out more about the presentations of other speakers, visit the website of Energy Community and feel free to download their presentations here.