USAID Project in Macedonia

The project of USAID and Habitat for Humanity Macedonia targeted the energy efficiency in the low-income housing sector through a set of activities that help Macedonian households living in multi-apartment buildings reduce their vulnerability to energy prices escalation.

Another important aspect of the project is a reduction of the greenhouse gasses and air pollution in the atmosphere, bearing in mind the environmental protection and climate change issues.

According to the findings of this project, the energy consumption in Macedonia is high, unaffordable, inefficient and thus environmentally degrading.  Based on the assessment of the greatest challenges in the Macedonian housing sector, such as the ownership, management and maintenance of collective housing and the patterns of energy use and costs we have come up with the project’s baseline. It takes into consideration the fact that the household energy consumption per unit of GDP in Macedonia is four times higher than the average in the European countries. The projects main objectives have been developed in order to address the specifics of the housing situation in Macedonia.

Main objectives of the USAID and Habitat for Humanity’s project in Macedonia:
  • To develop and test market-based solutions for energy-efficient reconstruction in collective housing units, including financing models that combine capital and subsidies successfully tested and leveraged by project revolving loan fund
  • To decrease in this way energy consumption and cost by 20%,
  • To improve management of collective housing units in Macedonia through effective self-management and maintenance by homeowners’ associations
  • To facilitate investment, entrepreneurship and green job creation, including, quality energy services
  • To 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

Over the four years, the project helped families living in collective apartment buildings create more comfortable living spaces while reducing their household energy consumption and its related costs. Energy efficient upgrades were applied to 35 collective apartment buildings in seven municipalities, directly supporting more than 700 homeowners.

The project also developed and tested a variety of financial models including lending to individual homeowners, specialized companies and microfinance institutions for particularly segmented groups. In working with each building it was also necessary to strengthen the capacities of the homeowner associations to manage and maintain their properties.

When this project was started, the average household energy consumption per unit of GDP in Macedonia was 4 times higher than the average in developed European countries. The energy audits, performed by the project, confirmed that the renovated building’s annual energy consumption for heating may be reduced by as much as 40 percent. Those savings basically pay back investors within just a few years.

While USAID and Habitat for Humanity Macedonia are proud of this achievement, we know that there are many more families who could benefit. For this purpose, we have explored a variety of alternative ways to fund energy efficient renovations in collective housing beyond the life of this project. In parallel to the project created Residential Energy Efficiency Revolving Fund that will continue with operation, the partners concluded that the sustainable models will require a consistent policy framework and financing mechanisms, carefully coordinated by the government, international and local development agencies and socially motivated investors.

Case study: Centar Municipality Macedonia

Habitat Macedonia and the municipality of Centar in Skopje continued the successful cooperation even after first phase of the project when the new Mayor Andrej Zernovski confirmed that the municipality will maintain its financial support for new thermal insulation façade instalment to the existing collective apartment buildings, for the purpose of reducing the consumption of heating energy. According to the already established model, the homeowners of the selected buildings will be offered non-profit loan by Habitat Macedonia aimed at replacement of external doors and windows, along with legal and logistical support necessary for reaching the agreement which is set e precondition for any intervention on the façade, by the Housing Law considered common space of the apartment building. For the purpose of verification of the cooperation Zoran Kostov, the Executive Director of Habitat Macedonia and Andrej Zernovski, the Mayor of the Municipality Centar signed new MoU.

In this occasion the Mayor Zernovski stressed out that this project does not foresee any change in the appearance of the apartment buildings and announced that the buildings that didn’t qualify during the previous rounds will be taken into consideration during the future phases of the project. Eleven facades of apartment buildings were already renovated in cooperation with Habitat Macedonia during the first year of the project

The homeowner associations of 32 apartment buildings responded to the call for financial support by the local government, agreeing to the criteria at least 70% of the apartments to replace the energy inefficient external doors and windows. In the second year, there were 15 apartment buildings renovated during the next phase, for which the municipality allocated 11 million MKD. It is estimated that the energy consumption and the respective energy bills for heating will decrease for about 30%.