Energy efficiency renovations of residential buildings take place in a complex interaction between different stakeholders: municipalities, financing organizations, utility companies and the representation of homeowners usually in the form of homeowner associations. We call this complexity the eco-system of stakeholder of residential energy efficiency.
In several countries homeowner associations have serious representation and credibility issues towards other stakeholders; at the same time homeowners lack the trust in working with municipality and banks. The municipalities do not prioritize giving subsidies to energy efficiency renovations of privately owned buildings and they are as well generally underfinanced in this region. Banks do not have any experience in lending to entities like homeowner associations and in some countries homeowner associations even lack the independent legal status to be eligible for such a loan.
The main challenge of the eco system is: who will enable the ecosystem to be functional? In more developed markets the homeowners themselves or the hired building managers can manage all these relationships, however in the underdeveloped markets of Eastern Europe and Central Asia there is a need for an actor who can bridge the gap between the different stakeholders, who can build trust between the different stakeholders and who can facilitate the development of complex financing models between the different stakeholders. Our experience shows that independent and professional facilitation is needed between the stakeholders.
Habitat for Humanity with USAID long identified the need of energy efficiency renovations of residential buildings in Eastern Europe and Central Asia but we also identified serious bottlenecks in the above eco-system. We also realized that based on our previous housing interventions and our status as an independent NGO we are able to enter this eco-system and start bringing together the different stakeholders. It is also in alignment with our organizational strategy about how we want to achieve sector impact by enabling market actors and changing policies and systems to provide affordable housing solutions for low income people and vulnerable groups.
Togehter with USAID we developed a complex approach how to enable the different stakeholder in the eco-system; we offer technical assistance to financial organizations to be able to develop new loan products to homeowner associations. We also help the communication between the bank and the homeowner association. We work with municipalities (in some cases national governments) to implement existing policies better, to modify existing policies and systems or to introduce completely new policies which could help homeowner associations to invest into energy efficiency renovations. We help contract the energy audit companies or experts to run energy audit of buildings where the homeowners plan to invest into energy efficiency in order to make the right decision on the investment and also to get a baseline compared to which the homeowners will be able to measure the benefits of investments.
Residential Energy Efficiency for Low-income Households project is one of the many assistance projects supported by the American people through the United States Agency for International Development (USAID). Since 1992, the American people through USAID have provided a broad range of development programs in Armenia and Bosnia and Herzegovina, shifting from an initial humanitarian emphasis to assistance for economic, political and social transition.