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Study Visit and Expert Meeting: report from the Budapest meeting

Energy prices and energy poverty in Eastern Europe: Realities and Perspectives

Metropolitan Research Institute, Habitat for Humanity Hungary, FEANTSA and Habitat for Humanity International joined powers to organize a study visit and expert meeting in Budapest
to better understand the state of play of the possible adverse effects of energy efficiency measures and the energy poverty problems in Central and Eastern Europe in 2022,
and how likely it is to be impacted by current European legislation plans and energy prices increase.

 

Study Visit

The event started on July 6 with an extensive study visit mostly in the 8th district of Budapest city. The group first visited an EU-funded (Horizon 2020) RenoPont, a one-stop-shop service for residents planning energy renovation, further continued with a tour of a social housing building renovated by the 8th district of Budapest, and with a presentation and discussion at the Family and Child Welfare Service Debt Management and Housing Group of the 8th district of Budapest followed by the meeting with the housing manager from the 8th district. The program ended with another presentation and discussion led by Fanni Tóth and Gergely Schum on social housing and energy projects at the district level.

 

Expert meeting: Exchange of views on energy prices & energy poverty in Eastern Europe

On July 7, the program continued in the format of an expert meeting consisting of two presentation sessions and one panel discussion:

Session 1: European perspectives

In session 1, Ludmila Perunska and Veronika Kiss presented the context of the residential building stock in Central and Eastern Europe and presented the two project, implemented by Habitat for Humanity International - Europe and the Middle East, tackling energy poverty in this region - REELIH and ComAct.

Session 2: The social impact of energy prices increases

Panel discussion: What policies to mitigate the social impact?

The event was concluded by a closing session on key takeaways, with a promising message that

“Through establishing combination of building regulations and pricing mechanisms, and through providing the right type and scale of support, the EU can include low-income households in the energy transition, empowering them to deploy effective and structural solutions that will improve their quality of life and help them move away from dependence on imported fossil fuels while contributing to reducing GHG emissions from their homes”

 

Check out the full report with discussion summaries and event outcomes here.

What is ComAct?

ComAct - Community Tailored Actions for Energy Poverty Mitigation is an EU funded Horizon2020 project that aims to make comprehensive energy efficient improvements in multi-family apartment buildings in Central and Eastern Europe (CEE) and in the republics of the former Soviet Union (CIS).

The key is to make renovations affordable and manageable for energy poor communities, as well as to provide needed assistance for lifting said communities out of energy poverty.

The idea is to identify energy poor households and to create a new understanding of energy poverty. Next step is intervening across the three key dimensions, being it stakeholders and communities, the financial, and the technical one, and finally testing the approach in five pilot countries - Hungary, Bulgaria, Lithuania, North Macedonia and Ukraine.

Energy poverty is rather a complex concept. Hence a detailed and specific solutions are needed to tackle it, for which there is ComAct with its new report.

The overview report on energy poverty concept

The Overview report on the energy poverty concept is aimed at highlighting the need to tackle energy poverty as swiftly as possible, as it is an issue that acts as a gatekeeper against a higher standard of living. The report was put together by a consortium of organizations that contribute to ComAct - Building Performance Institute Europe, Metropolitan Research Institute, LVOA-ALCO, OHU, ENOVA, IWO, EnEffect, Burgas Municipality as well as Habitat for Humanity International and Habitat for Humanity Macedonia. All of these organizations brought together their best experts in the field of energy poverty and housing to deliver a report on the state of energy poverty within the five ComAct pilot countries, how energy-poor are identified there, and what financial and other supportive programs are in place to support them. Furthermore, the report has identified existing financial schemes from all over Europe, which have been proven to help alleviate energy poverty in multi-family apartment buildings (MFABs).

Some of the key findings related to the concept of energy poverty are:

Energy poverty in the pilot countries

As mentioned above, the report and the ComAct project itself focuses on five pilot countries of the CEE and CIS regions:

Countries in the CEE and CIS regions have the most energy-poor people in Europe, mainly due to high energy prices and poor energy efficiency of the buildings, heating systems and appliances. In these regions, the housing stock is predominantly privately-owned and characterized by a large percentage of MFABs. This is the result of mass privatization in the 1990s, along with the deconstruction of the social safety net: utility and energy costs of the flats massively rose, burdening the family budgets. At the same time, the socialist-era collective maintenance mechanisms were left behind, and the decay of homeowners’ associations has not been addressed effectively with a clear set solution.

To address the complex roots of energy poverty, there is a need to develop a new approach to make interventions affordable, substantially influence energy costs and consequently reduce the high energy poverty level in the CEE and CIS region.

Following is a short description of the state of energy poverty of each ComAct implementing country.

Hungary

Surprisingly, the country has a rather low level of energy poverty compared to other states within the ComAct project. Just around 5 to 10% of households are energy poor in Hungary. It is mostly the rural areas, specifically the family houses that are more affected. Nevertheless, MFABs have a myriad of other specific problems, such as a large number of apartment owners that make renovation more challenging from an organizational point of view. Hungary also uses the term 'vulnerable consumer' for law-making, which is a descriptor of social status. Problem is that there are no socially targeted renovation subsidies available, which might make it harder for Hungary to implement the coming EU Renovation Wave Strategy in the most effective way.

Bulgaria

Among the ComAct countries, Bulgaria has the highest share of energy-poor households, with a whopping 10 to 35% of households being energy poor, and with only 3.6% receiving a heating allowance. The current renovation program also lacks income components to help facilitate an alleviation of energy poverty in the country.

Lithuania

Following Bulgaria, Lithuania is the second energy poorest state, with an energy poverty level of 10-26%. MFABs in cities and towns are more affected than family houses in rural areas. There also is no official definition of energy poverty, but there are some measures like heating allowances and socially targeted renovation schemes, which aim at alleviating the energy poverty stricken owners.

North Macedonia

North Macedonia is very forward thinking, as it already addresses issue of energy poverty in several strategic documents, as well as through policies targeting vulnerable energy consumers. The number of energy-poor households is comparable to that of Lithuania and Bulgaria, which highlights how being within the EU does not automatically mean a higher standard of living, as it takes time and appropriate policy work. Although the condition of buildings in rural areas is worse, the problem of energy poverty is much more severe in urban areas due to the affordability of energy.

Ukraine

Ukraine has a large energy poverty problem since the cancellation of its high energy subsidies during the last five to six years. Not all subsidy schemes were abolished and some are still in place, but as there is a large energy-poor population and the building stock has a very low energy performance, it is difficult to target these schemes at the most vulnerable consumers.

The EU perspective on energy efficiency of buildings

Energy poverty has a long tradition inside the EU, hence according to the known regulations such as the National Energy and Climate Plans (NECPs), and also as a part of the Renovation Wave Strategy or the EU Green Deal, the EU has dedicated mechanisms to support building renovation, for which money is earmarked within the Recovery and Resilience Facility, as well as other instruments. Problem is though that the EU member state implementation is rather insufficient, and hence energy poverty is still a large issue.

All EU member states should ensure the necessary supply of energy for vulnerable customers and in doing so integrate an approach, which looks at various policy areas that could be used to measure and tackle energy efficiency improvements of housing. Effectively, these directives should acknowledge the existence of energy poverty and say that the protection of vulnerable consumers is a minimum requirement to eliminate it, keeping in mind that energy poverty is a broader concept than that of vulnerable customers.

Existing energy policies

The Clean Energy for Europeans package takes it a step further, as it consists of eight legislative proposals targeting various sectors: energy efficiency, energy performance of buildings, renewable energy, energy security and more. The Governance of the Energy Union and Climate Action Regulation also stipulates that EU member states should assess the number of energy-poor households, but measures and solutions are still not exactly clear. Similarly, the Energy Efficiency Directive tackles energy poverty in a way, in which it calls for measures to address vulnerable households as a priority. Lastly, under the revised Energy Performance of Buildings Directive, EU member states are required to outline relevant national measures to help alleviate energy poverty as part of their Long-term Renovation Strategies, to support the renovation of both residential and non-residential building stock.

Said legislations are also important for the Energy Community members, such as North Macedonia and Ukraine, although they have still not implemented the Clean Energy package, as their legislation is lagging behind that of EU member states.

All in all, the EU is primed to address energy poverty within and even outside the EU. However, if it means to do that properly, heavy cooperation with both the EU member states and the civil society experts will be necessary, as they are the ones with the real field expertise. And just as the overview report of ComAct illustrates, solutions must be direct and comprehensive, targeted at the most vulnerable energy consumers.


Find more information about ComAct on the official website of the project here.

For more information on the overview report and its findings, please visit this site.

Since the environmental challenges are these days on top of the agenda of the European Union (EU), new strategies to incorporate green topics into various spheres, including the building sector, started to emerge more and more often. The EU's Renovation Wave Strategy, which is consolidated into the EU Green Deal, aims to support the improvement of buildings in order to make them more sustainable and energy-efficient.

To maximize the potential of the Renovation Wave Strategy for people who are likely to face energy poverty, a collaboration between Habitat for Humanity Hungary (HFHH) and the Center for the Study of Democracy, Romania (CSD) arose

to raise their concerns toward the EU to consider the need for more region-specific recommendations how to tackle energy poverty.

As stated in the report, more than 50 million people in the EU are unable to secure an adequate level of energy for their living. The most affected regions are located in Central and Eastern (CEE) and Southeastern Europe (SEE). Both of these areas are marked by the era of socialism and a high level of marginalized communities.

While there is no official and general definition of energy poverty, we talk about it when:

Not only is the current state of many dwellings in the CEE/SEE region energy inefficient, but it is also one of the biggest air pollutants in most of the region. Usage of outdated heating systems and solid fuels, such as wood and coal, as the main heating products, caused Hungary to ascribe over 80% of PM2.5 emissions to these combustibles.

Therefore, HFHH and CSD call for EU policies and funding schemes to support the renovation of buildings while taking specific needs and circumstances of the CEE/SEE region into account. As a result, they came up with 13 detailed recommendations within three major topic areas:

      • stronger focus on energy poverty - an obligation of EU member states to target energy-poor households while making sure the funds are designated to address energy poverty of those living in the rural areas, urban areas and the marginalized and segregated communities
      • appropriate funding instruments - mainly through tailor-made financial solutions, implementation of a buy-back program, low-rate loans, financial behaviour consultations and education in energy efficiency, and support of upgrade of the most inefficient and polluting devices
      • the need for EU policies to address energy poverty - complement the EU legislation by suitable funds and measures which would target the housing issue, improvement of data collection, make sure that national governments go beyond their National Energy and Climate Plans (NECP), and direct support of the implementation of renewable energy sources.

 


Read the whole report with 13 recommendations here.

Energy inefficiency and the overall low quality of the building stock in Central and Eastern Europe is one of the most alarming issues of the region. The European data on countries affected by energy poverty only confirm that the post-socialist countries are listed among the most affected ones by energy poverty. If you are aware of our REELIH project and what is the reasoning behind our interest in supporting renovation of co-owned multi-apartment buildings, you know that the primary cause of the housing issues in this region is the large number of the old building stock built during the communist era. The current high numbers of privately owned units in these residential buildings are resulting from the privatization wave after the fall of communism in 1990s. This became the main obstacle in finding consent among the owners to improve the quality of their dwellings and stepping out of the closed circle of energy poverty.

The whole problem of energy inefficient buildings stock in this region is manifold, considering all the factors that contribute to the overall high rates of energy poverty. Rising energy prices, low incomes, misfunctioning homeowner associations and lacking financial possibilities to renovate the residential buildings all together contribute to the gravity of the situation.

The energy poverty and the challenges of the socialist-era housing facilities are discussed in a new C4E Forum blog prepared by two representatives from Romanian Center for the Study of Democracy, Babes-Bolyai University, Anca Sinea and Andreea Vornicu-Chira. Learn more about the topic in this article.

"Housing governance to support housing affordability"

is a Regional Online Workshop that took place during the last week of February 2021. It was co-organized by the Ministry of Environment and Spatial planning of Slovenia and the United Nations Economic Commission for Europe (UNECE), together with the support of Housing Europe, the Union for the Mediterranean and UN-Habitat. The event opened up for a discussion about the undersupply of affordable housing, homelessness, rising urban rents, low quality of housing and urban infrastructure, limited access to land for housing construction and renovation, and mounting urban poverty in the UNECE region. These challenges has been long on rise, however, the Covid-19 pandemic situation made the need of sustainable and affordable housing one of the most important policy challenges of current days.

Affordable and adequate housing is far from being a standard within the UNECE region and is especially important for vulnerable groups which at the same time suffer also from limited access to healthcare, fuel poverty and price inflation. Moreover, mounting unemployment connected with Covid-19 pandemic widens the number of people in the need of housing and other basic services even more. The UNECE, representing a diverse region with ranging national and local contexts of housing sector and its legal frameworks, decided to organize this online workshop to share knowledge and good practice for inspiration and allowing others to formulate viable and sustainable solutions to long-standing housing issues in this region together with responding to the world pandemic crisis.

Workshop

The workshop was organized as a two days event. The first day of the workshop was dedicated to the theme of key international initiatives on affordable housing in Europe and on governance for affordable, adequate and healthy housing for all.

The morning of the second day was reserved for discussion of #Housing2030: Improving Housing Affordability in the UNECE Region. It is a new UNECE study under development with a goal of improving capacities of national and local governments to formulate policies that improve housing affordability and sustainability in the UNECE region. As one of the topics of this study addresses housing governance and regulation, the UNECE reserved this time for workshop session with a focus on the preparation of this chapter of the #Housing2030 study.

The final session of the two-day workshop called "Governance of the housing sector: Focus on South-East Europe" was oriented towards housing policies in countries of the South-Eastern Europe.

Andrew Popelka, a representative of the USAID which provides funding for REELIH project, contributed to the session with a comprehensive presentation of a new comparative study Gap Analysis of the Housing Sector In Western Balkan Countries: Bosnia and Herzegovina, Kosovo, North Macedonia, and Serbia VS. Slovak Republic. The study identifies and analyses the gaps in housing regulations in the Western Balkans.

REELIH project is mentioned in this study to manifest its impact on establishing mechanisms that help people in REELIH implementing countries to find consensus and get finances for renovation of the multi-owner apartment buildings.

Andrew Popelka admits that the multi-owned apartment buildings lack the attention of the donors since the multi-ownership of the building complicates the overall decision making prior and also during the renovation works. That is another reason why REELIH works on creating more financing possibilities for these buildings, providing technical assistance and serving as a mediator in the complex environment of many stakeholders included.

We would like to thank the UNECE for organizing this workshop and to Andrew Popelka from USAID for his contribution to this workshop, again showcasing REELIH as a good practice in the region of Central and Eastern Europe.


Find more information about the UNECE workshop here. 

Find a new comparative study by USAID here.

 

Repost from the original press release

ComAct - Community Tailored Actions for Energy Poverty Mitigation is a new project that started in October 2020. Financed by Horizon2020, ComAct is set to lift people in Central and Eastern Europe and in the former Soviet Union republics out of energy poverty.

Na obrázku môže byť outdoorové oblečenie a text, v ktorom sa píše „ComAct Tailored Actions Community for Energy Poverty Mitigation“

Background of the ComAct project

Energy poverty represents a problem all over Europe and is particularly high in the East, South, South-Eastern and Baltic regions of Europe. In most of these countries,

the quality of housing is low, and the affordability of heating or cooling cost is high

despite the progress made in recent years through public investments in energy efficiency policies and measures and efforts to involve the stakeholders addressing the problem.

Implementing energy efficiency measures is more complicated in these countries than in Western Europe, particularly due to mass privatization of the housing sector combined with the deconstruction of the social safety net during the 1990s. Privately owned multi-family apartment blocks predominated and increased of energy costs became a burden to family budgets. In parallel, socialist era collective maintenance mechanisms were abandoned, whereby the decay of homeowners’ associations has not been adequately addressed.

Implementation of the ComAct project

The ComAct project is interested in solving problem of energy inefficient buildings in this region as the REELIH project does, however, its focus in more on overall issue of the energy poverty. To be piloted in Hungary, Bulgaria, Republic of North Macedonia, Lithuania and Ukraine, ComAct will provide a set of financial, technical and organizational instruments that can be replicated all over Europe to solve the "heat or eat" problem of low-income families and increase efficiency and multiple benefits coming from the renovation of multifamily buildings. The impact will already be visible in the three years timeframe of the project, with its aim to involve more than 3000 consumers and trigger almost 10 million euros of investments in sustainable energy. However, the biggest impact of ComAct lies in the lessons learned coming out of the pilots, to be replicated all over Europe.

Contribution delivered by ComAct will be key in providing EU countries a set of instruments to lift millions of its citizens out of energy poverty and to ensure that buildings provide a healthy and affordable living and working environment.

 

Na obrázku môže byť text, v ktorom sa píše „ComAct: Affordable low cost solutions for high energy efficiency driven by community action UNAFFORDABLEHIGH IMPACT SOLUTIONS Cities and loca auth Construction/energy compa NGOs/civilsoci ety Policy and rganizations cision makers Building ma nagement/ ma nance companies Professionals with technical skills HIGH ENERGY EFFICIENCY Financial institutions LOW NERGY EFFICIENCY Energy poor households organized Homeowners Associations AFFORDABLEW C“

This is a detailed working scheme of ComAct project

 

We are proud to say that the ComAct project originated from the working group of partner organizations that has been created under the REELIH project. Common interest in energy poverty in the CEE and CIS region of this group outgrew to the idea of making a case together and the willingness to contribute to the alleviation of energy poverty in a joint project. For more information about who stands behind this starting project, please, visit a brand new website of ComAct project.


Find more information about ComAct project here.

Read the full press release here.

It has been already more than ten months from the date when the EU Member States were supposed to submit their newest Long-Term Renovation Strategies (LTRS). This national strategy is an important document of planning since it serves to support the renovation of national building stock in a highly energy efficiency and decarbonization-oriented manner. The LTRSs should align with the requirements introduced by the Energy Performance of Buildings Directive, including detailed plans how Member States want to address energy poverty. At the same time, LTRSs should be part of integrated National Energy and Climate Plans of the EU Member States. Meeting these requirements and making these documents dependent on each other, it will be much easier to achieve effective and quick process of renovation of national building stock in the EU.

Caroline Milne, Senior Communications manager at BPIE, wrote a comprehensive article about the LTRSs for C4E Forum. She brings to the attention the fact that still, at the beginning of 2021, twelve national strategies are missing, including all the strategies from the countries of Central and Eastern Europe. The author of the article acknowledges the crucial role of building renovation and she outlines the main benefits of building renovation works, including higher quality of life for inhabitants, creation of new job and investment opportunities and the acceleration of green recovery. Considering it an investment priority, the article provides an information about all the possibilities of financing the renovation of buildings from the EU funding.

You can find the article in full here and learn more about the current EU initiatives supporting building stock renovations.

Organized by UN-Habitat, the conference World Urban Forum 2020 took place in Abu Dhabi from 8 - 13 February, 2020. It was already for the 10th time that this international event brought together the experts from the field and enthusiasts of sustainable urbanization to gather and exchange the views on urban issues. The theme of this tenth session of WUF was

Cities of Opportunities:
Connecting Culture and Innovation

The conference was divided into six dialogues session:

These six dialogues covered the emerging innovative approaches and practices in harnessing culture and innovation as drivers for sustainable urbanization. At the same time, the sessions provided great insight into the linkages between urbanization, culture and innovation as a basis for achieving inclusive, safe, resilient and sustainable cities and human settlements. The emphasis was put on a synergy between tradition and modernity, and deeper understanding of multi-generational communities. Through this approach, the conference sessions tried to unfold and introduce the role of culture and innovation in implementation of the New Urban Agenda and achieving urban dimensions of the 2030 Agenda for Sustainable Development.

WUF10 Training Event

Susana Rojas Williams, HFHI - EMEA Director of Housing and Human Settlements Department, was at WUF10 to speak about the success of REELIH project. UNECE was kind enough to invite HFHI to speak at their training event called

Innovative management of multi-apartment high rise housing: Localizing Sustainable Development Goals 7 & 11 and New Urban Agenda through housing strategies.

It aimed to develop practical knowledge and skills in maintenance and management of multi-apartment residential buildings and to unfold its problematic sides.

At the same time, presented were different approaches that establish a sustainable maintenance and management systems with adequate finance, direct citizen engagement, laws and regulations. The adoption of policies targeting existing housing stock is a strategy that helps realization of SDG 11 and the New Urban Agenda.

The topic of this event acknowledged the specificity of Central and Eastern European region where a significant part of the housing stock consists of old and energy inefficient multi-apartment buildings. The main issue there is that home-owners do not assume the responsibility to maintain the buildings they live in. It is a result of different factors influencing the last decade of 20th century:

This situation left residents of multi-apartment buildings unprepared for a new way of living in these yet ageing, not properly maintained buildings. Simply said, no one was there to tell the homeowners that they have the financial and social obligations to organize and pay for the maintenance and management of their common goods and properties and to ensure their building is fully functioning. Therefore, there is a critical need in this region to build homeowner associations and within them a financial reserve for cyclical maintenance and capital refurbishments for future.

REELIH project as best practice

The story of multi-apartment buildings in Central and Eastern Europe is related also to REELIH implementation countries. There, facilitating the "eco-system of residential energy efficiency stakeholders" helped fighting the described challenges.  Creating a common environment for people (home-owners), private (banks, construction) and public (local/national government) sector improved the overall efficiency of communication level between these sectors. Moreover, it eased the way in which the homeowners get into a constructive dialogue, get to an agreement for common action and access a financial and other support from private and public sectors. REELIH project's two key messages say that

without homeowners, energy efficient improvements, building maintenance and management cannot happen. Moreover, without the right institutional structure, energy efficiency retrofits, housing management and maintenance cannot scale.

Inter-sector communication is the crucial activity to be present when finding the right solutions to housing issues not only in the Central and Eastern Europe. Check out the solutions to Bosnia and Herzegovina, Armenia and Macedonia and their REELIH success stories on our websites.


Find more information about World Urban Forum here.

Find the WUF10 Declaration here.

Find the REELIH presentation for WUF10 here.

How USAID and HFHI united neighbors to heat their homes, reduce their energy bills, and strengthen their communities

 

“I’m always finding some excuse to be the last one at work because it’s warmer there. I’m fed up with high bills and chilly rooms.” — Lile Kike, Skopje, North Macedonia

“I could not afford to heat our house last year. I just turned on the stove for 20 minutes in the kitchen to make it possible for everyone in the family to sit around the table for breakfast.” — Nona Nalbandyan,Yerevan, Armenia

“When I first moved in here, the windows were old, and we covered them with blankets to stop the wind.” — Ivana Georgievska, Skopje, North Macedonia

 

Low income housing in Yerevan, Armenia. / Habitat for Humanity

These stories are all too common in Europe and Eurasia, where housing for low income residents and retirees is dominated by 1960s era apartment blocks. When the Communist bloc collapsed, a wave of privatization swept across the region. Sadly, the governance structures and financial mechanisms required to maintain these buildings did not immediately follow. The massive state institutions charged with repairs during the Soviet period no longer existed.

Many residents of these aging apartment blocks are already struggling with daily expenses. In North Macedonia, for example, 25.7 percent of the population was considered unable to keep their homes adequately warm according to Eurostat data from 2016. This way of life is perilous in a part of the world where winters are long and dark, with temperatures routinely dipping to 20–30 degrees Fahrenheit (-6 to -1 degree Celsius).

 

Building with shattered windows prior to retrofit, Yerevan, Armenia. / Habitat for Humanity

As heat escapes through the cracks in the walls and ceilings, the cost of heating a building — and keeping the lights on — rises by as much as 20 to 30 percent. The situation becomes particularly dire during the winter months, when the price for heat is too high for many people to bear.

As housing prices and energy bills continued to rise through the 1990s and into the 2000s, residents of these crumbling structures had few places to turn. Fearing the impact of skyrocketing housing costs on already fragile communities, USAID and Habitat for Humanity stepped in.

Starting in 2011 in North Macedonia and expanding into Armenia, and Bosnia and Herzegovina, USAID works with Habitat for Humanity in Europe and Eurasia to help create the financial mechanisms, public awareness, organizations, and local government buy-in needed to empower residents to organize for better, healthier, more affordable neighborhoods.

USAID’s partnership with Habitat for Humanity is far from traditional development. Directly retrofitting every apartment block would have been prohibitively expensive. It would also have taken decision-making out of the hands of the residents.

USAID and Habitat for Humanity chose a different course. Habitat reached out to homeowners to inform them about how much money they were losing per month in unnecessary energy bills. Those who expressed interest in retrofitting their homes found a partner in Habitat.

 

 

Homeowner’s Association meeting in Banovici, Tuzla Canton, Bosnia and Herzegovina. / Habitat for Humanity

 

The key to success turned out to be a combination of community organizing and burden sharing. Residents had to pool their own resources, request a loan from a bank, and consistently pay down that loan as a community. Habitat helped neighbors organize and agree on a refurbishment plan. Now they only needed a financing partner.

In North Macedonia, Habitat set up its own loan fund to demonstrate that homeowner’s associations are reliable clients. In Bosnia and Herzegovina, residents started out financing the repairs through personal savings and local government subsidies facilitated by Habitat. In Armenia, Habitat worked directly with banks to craft loans tailored for homeowner’s associations.

To understand the success of the partnership between Habitat for Humanity and USAID, one only needs to visit these neighborhoods.

 

Above: Views before and after a building with shattered windows in Yerevan, Armenia, received a retrofit. Below: A building with shattered windows prior to and after a retrofit, in Tuzla Canton, Bosnia and Herzegovina. / Habitat for Humanity
In North Macedonia, where I served as acting country representative, at least 62 buildings in eight municipalities have received retrofitting, impacting more than 1,900 homeowners. In Armenia, 18 buildings (519 housing units, 1,500 residents) have been repaired. More importantly, this work so impressed the Yerevan Municipality that its leaders are considering co-financing retrofits on 900 additional units.

And in Bosnia and Herzegovina, four buildings (49 housing units, 133 residents) have been retrofitted. Now local governments in the Tuzla Canton have developed an action plan to retrofit 973 more homes. The plan will provide subsidies to match loans and other funds raised by homeowners associations.

 

A happy resident of a Habitat for Humanity-repaired home. / Habitat for Humanity

 

Beyond the numbers, Habitat for Humanity has forged a market ecosystem where homeowners, banks, and government officials work together to create healthier, more affordable housing for some of the most vulnerable populations in the region. In the process, they have also created a model which can be replicated across Europe and Eurasia because it benefits everyone in that system.

Banks now have a tested way to work with potential new customers via their homeowners associations. By pitching in now, local governments reduce the likelihood of having to invest a greater sum down the road to retrofit buildings, build new housing, or increase subsidies for electricity bills. Homeowners are empowered to take control of their own future and feel a renewed sense of pride in their homes and communities.

Most importantly, residents are welcoming the extra they find in their pocketbooks. According to Habitat, retrofitting has cut energy bills for low income homeowners by up to 50 percent.

 

 

“The difference is obvious after the windows installation in the lobby. Most of the day the boiler is switched off. This year it is very warm in the winter.” — Alaverdi Toumasyan, Yerevan, Armenia

 

 

“It feels like I’m in a dream with the roof done. It’s about time and the feeling is incredible.” — Milenko Lukich, Tuzla Canton, Bosnia and Herzegovina

 

“I never believed that our building was going to end up looking like this…it is a thousand times better, a thousand times….” — Meho Mehinovich, Tuzla Canton, Bosnia and Herzegovina

 


USAID’s partnership with Habitat for Humanity has important policy implications. Educating the public about how energy efficiency personally impacts them is a small but important step towards insulating the region from internal and external energy shocks, especially those perpetrated by foreign malign actors seeking to leverage energy access in exchange for political deference. And for those countries looking to join the European Union, which has exacting standards for energy efficiency, this new approach establishes important protocols now that may help down the road.

 

Image result for Gretchen Birkle

About the Author

Gretchen Birkle is the Deputy Assistant Administrator for the Bureau for Europe and Eurasia and was the Acting Country Representative in North Macedonia.

We are happy to see interest growing in the issue of energy poverty and especially in relation to energy efficiency. The Council of Europe Development Bank (CEB) recognizes the graveness of this issue, conducted a quantitative empirical analysis of energy poverty in Europe, its causes and how energy efficiency can help to fight it and published a report called Energy Poverty In Europe: How Energy Efficiency and Renewables Can Help. CEB found out that energy poverty rates are highest in Southern and Central-Eastern European countries but the problem still stays European-wide. Overall, CEB study claims that there is an estimation of 30 million people living in energy poverty in Europe.

CEB works with an unofficial definition of energy poverty as unreasonably high proportion of income spent on energy bills per household; or households that are unable to afford basic energy needs at all.

The study claims that main causes of energy poverty stem from low income, poor quality homes and energy inefficient appliances. The high rates of energy poverty correlate with higher at-risk-of-poverty rates, food poverty (inability to afford basic food staples) and higher rates of self-reported health issues.

Study's findings and conclusions

CEB was looking at how energy prices and income levels influence household energy consumption. They conclude that in a short run, changes in prices of energy and household income levels have small impact on household energy consumption. On the other hand, in a long-term, demand for energy depends on prices and incomes following this logic:

Households may forgo using gas as an energy source if prices become too high. At the same time, rise in income is associated with an increase in the consumption of either electricity or gas and should help reducing energy poverty rates.

Energy efficiency of buildings is, however, not the final stage of the process. Once the buildings have sufficient household energy efficiency improvements, renewable energy becomes another driver combating energy poverty. It is predicted that as renewable energy technology develops and capacity increases, the marginal cost of renewables will continue to fall, making them affordable alternatives to conventional energy sources.

Econometrics

After a 10% increase in the household energy efficiency score:

Moreover, after governments undertake and implement high impact energy efficiency policy, household energy consumption may drop by 4.4%. Other econometrics show that there is a direct effect of energy efficiency in helping reduce energy-related economic vulnerability.

Overall, CEB's study shows that energy efficiency improvements and related regulatory policies contribute to decreasing in household energy consumption and energy poverty rates.


Find the full report here.

Find the press release about this report here.

 

 

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