Business lunch of the OECD delegation and EUEA members on the development of ESCO

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Yesterday, July 4, 2018, a business lunch of the OECD (Organization for Economic Cooperation and Development) delegation of the Eurasia Project and members of the Association of the European-Ukrainian Energy Agency took place.

In general, the purpose of the OECD Delegation to Ukraine was to promote and introduce into Ukrainian legislation recommendations for improving the implementation of energy efficiency measures through the ESCO mechanism and monitoring implemented reforms in the field of energy.

 

The following elements are proposed in the framework of recommendations for improvement of the ESCO mechanism from the OECD side:

  • Improve the basis for innovative and long-term financing, as well as implement state support programs;
  • To introduce typical energy saving contracts;
  • Provide training and capacity building to assist local financial institutions in developing ESCO treaties;
  • Provide incentives to increase demand for ESCO services in the business sector (subsidies or voucher programs, SME support, tax incentives for businesses);
  • Others (more in the presentation by Mr. Florian Jager - OECD Policy Analyst "OECD Monitoring Survey").

Director of the National ESCO Association of Spain (ANESE) - Elena González Sánchez shared the experience of ESCO's companies:

  • The Association includes 94 members (66% of ESCO companies, 20% - Technology companies, and others: Investment funds, Insurance and legal companies).
  • The ESCO's average contract price in Spain is 522,976 Euros
  • The average term of the ESCO contract is 8 years
  • Approximate saving of energy consumption 25,7%
  • The most common measures for the ESCO mechanism are the replacement of street lighting by 44%, and the sector is the most widespread - industry.
  • Most ESCO companies are small and medium businesses
  • The problem of funding ESCO companies remains that financial institutions (banks and foundations) are not interested in issuing a loan of 500 thousand euros, and choose projects for financing from 5-10 million euros. That is why the ESCO Association united several Funds and concluded a memorandum on the following: ESCO Association takes responsibility for the selection and verification of several ESCO projects and the creation of a corresponding portfolio of EUR 2 million, while for their part, the Funds spend a minimum of resources for their verification and provide funding.

This and more in the presentation of the Director of the National Association of ESCO of Spain (ANESE) -Olena Gonzalez Sanchez.

Oleksandr Gilbert, Senior Energy Efficiency Manager for the London Energy Efficiency Fund, also spoke about the significant interest in ESCO's potential in Ukraine, and that their Foundation and other Financial Institutions are awaiting the implementation of all international recommendations in legislation and raising the qualification level themselves. ESCO companies in Ukraine for future cooperation.

At the end of the meeting, Gabriella Miranda, Project Manager for Ukraine's Eurasia Project, OESR, noted that in cities due to decentralization there was a significant investment potential, but the investment capacity needs to be further developed. She also noted that, among other things, the practice of co-operation between companies - equipment manufacturers and companies - ESCO should be established to achieve the most efficient  results. Oleksandra Gumenyuk - Deputy Director of EUEA outlined the next steps in cooperation with the OECD, which will include support for the implementation of the Eurasia Project in Ukraine and the promotion of political and business dialogue in the field of energy efficiency.

 

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