Stimulating green investments: The EBRD’s Sustainable Resource Initiative

21 May 2014Astana

Contents

• The EBRD and it countries of operations

• The Green Economy initiative in Kazakhstan

• The Rolling Stones - are they on the money?

• The EBRD response to supporting green investments

• Sustainable Resource Initiative

• Lessons from the Sustainable Energy Initiative

What is the EBRD?

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In 34 countries from central Europe to central

Asia we:

- Promote transition to market economies

- mobilise foreign direct investment

- To improve people’s lives through better municipal services

- To encourage sustainable development

Owned by 64 countries and two

inter-governmental institutions

Capital base of €30 billion

The EBRD has a triple-A ratingfrom all three main rating agencies (S&P, Moody’s and Fitch)

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Cumulative business volume of €86 billion

Note: Unaudited as at 31 December 2013

Where we invest

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Environmental challenges for Kazakhstan

Kazakhstan’s Green Economy Agenda

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• Kazakhstan has taken leadership on developing a Green Economy:

• A strategic objective of the GoK

• The Concept Paper on the Transition of the Republic of Kazakhstan to Green

Economy (30 May 2013 #577)

• Green Economy Law covering 7 domains

1. Sustainable use of water resources;

2. Development of sustainable and efficient agriculture;

3. Energy saving and improvement of energy efficiency;

4. Development of power sector;

5. Waste management;

6. Reduction of air pollution;

7. Conservation and efficient management of ecosystems.

• Green Bridge

• Achieving the Green Economy objectives essential for enabling green Investments

The EBRD – supporting the government’s Green Economy Agenda

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• Policy dialogue

• Green Economy legislation

• Renewable energy legislation

• Waste management reform

• Energy efficiency in industry

• Finance and Investments

• Sustainable Energy Initiative

• Sustainable Resource Initiative

EBRD’sSustainable Resource Initiative (SRI)

Sustainable Energy Initiative

Water

EfficiencyMaterials Efficiency

SRI: operational approach

Projects across SEI areas

Working with governments to support development of strong institutional and regulatory framework that incentivises sustainable energy

Technical assistance to overcome barriers: market analysis, energy audits, training awareness raising, grant co-financing to provide appropriate incentives and address affordability constraints

POLICY

DIALOGUE

PROJECTS

AND

INVESTMENTS

TECHNICAL

ASSISTANCE

SRI: operating principals

Reflecting the EBRD mandate, experience and business model, the SRI is based on the

following seven key operating principles:

1. Deploy proven EBRD business model

2. Be scalable, with replicable activities

3. Be result oriented

4. Full compliance with EBRD policies (Environmental, Social and Public Information

Policy)

5. Link project and policy work

6. Mainstream within the Bank

7. Build on and leverage existing partnerships

Sustainable Energy Initiative in KazakhstanKazakhstan SEI Business

volume, 2006-13

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Industrial EE

SEFFs

Cleaner Energy

Renewable energy

Municpal

Kazakhstan SEI Business volume

by sector, 2006-13

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CLIENT

National Company Kazakhstan Temir Zholy (KTZ)

manages railway infrastructure and operates freight

and passenger train services.

SEI PROJECTS

Finance for KTZ’s energy efficiency programme,

including installation of energy efficient lighting;

introduction of heating solutions such as solar

collectors, heat pumps; and upgrade of hot water

generators.

FINANCIAL STRUCTURE

EBRD loan €28.6 million

of which SEI €28.6

million

CTF concessional loan €0.5

million

TECHNICAL ASSISTANCE

€ 99,000 ( Shareholder Special Fund and

Netherlands):

• Project design, management and monitoring;

• Capacity building in energy management and

facilitation of ISO 50001 adoption;

• Review of ESCO mechanisms for financing

energy efficiency investments.

ESTIMATED IMPACT

Electricity savings: over 60,000 MWh/year

Thermal energy savings: around 3,800 MW/year

Emission reductions: 83,000 tCO2/year

Cost savings: over €3.5 million/year

Project IRR: > 15%

Energy efficiency in the transport sectorrail transport in Kazakhstan

EXPECTED IMPACT

Heat savings: 270,000 Gcal /year

(the rehabilitation of the pipe networks will

reduce heat losses by more than 20%)

Emission reductions: 128,000 tCO2/year

IRRs of the investments: between 13-17%

© CAEPCo

CLIENT

Two subsidiaries of CAEPCO, an existing client of

EBRD and a leading private energy company in

Kazakhstan, operate in the cities of Pavlovdar,

Ekibastuz and Petropavlovsk.

SEI PROJECT

Finance for rehabilitation of district heating

networks: installation of an automated system of

control and monitoring of heating energy,

replacement of obsolete transmission and

distribution networks, and improvements of

insulation for the district heating networks.

FINANCIAL STRUCTURE

EBRD loan €23 million

of which SEI €23 million

CTF concessional loan€8 million

Total project value €39 million

Municipal infrastructure energy efficiencyDistrict heating in Kazakhstan

• The EBRD and it countries of operations

• The Green Economy initiative in Kazakhstan

• The EBRD response to supporting green

investments

• Sustainable Energy Initiative

• Sustainable Resource Initiative

• The Rolling Stones - are they on the money?

Contacts

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For all further enquiries, please

contact:

Nigel Jollands

Senior Manager

Energy Efficiency and Climate

Change

Tel: + 44 20 7338 7994

Email: jollandn@ebrd.com

EBRD, One Exchange Square

London, EC2A 2JN

United Kingdom

www.ebrd.com