What is the Sustainable Energy Initiative?
The Sustainable Energy Initiative (SEI) is the EBRD’s specific contribution to address the climate change challenge, with a particular focus on energy efficiency. Phase 1 of the SEI has been successfully completed with results significantly exceeding its original targets.
Background to the Initiative
The SEI was launched in 2006 to meet the needs of energy transition in the EBRD countries of operations and to respond to the calls of the G8 at the 2005 Gleneagles Summit for IFIs to scale up climate change mitigation investment.
SEI Phase 1 results (2006-2008)
SEI Phase 1 activities are estimated to lead to 21 million tonnes of annual CO2 emission reductions (equivalent to the total annual emissions of Croatia) and over 8 million tonnes of oil equivalent in annual energy savings (equivalent to over three times the total annual energy consumption of Albania).
Investments reached €2.7 billion through 166 projects in 24 countries of operations, exceeding its three-year target of €1.5 billion by 77 per cent. Reflecting the strategic integration and mainstreaming of energy efficiency and climate change into Bank operations, the share of SEI activity increased from 15 per cent of total EBRD investment in 2006 to close to 20 per cent in 2008.
SEI Phase 2 (2009-11)
The EBRD is further accelerating its action in climate change mitigation and adaptation by launching the next phase of the SEI. Objectives include:
- financing target range of €3 to 5 billion for total project value of €9 to 15 billion
- carbon emissions reduction range of 25 to 30 million tonnes per annum
- technical assistance grant funding target of €100 million and investment grant funding target of €250 million
These objectives reflect the strong performance of SEI Phase 1, the effective mainstreaming of energy efficiency and climate change activity across EBRD operations and its integration as a core strategic component and competence of the EBRD. However, considering the current global financial environment, the new targets also take account of the rising level of uncertainty in the operating context.
SEI donor support
Donor funding is essential in helping to overcome the barriers to sustainable energy investments. These range from lack of awareness and technical knowledge amongst management of private companies to weakness in regulatory frameworks aiming to create a level playing field for sustainable energy projects.
Donor funding has also been crucial in developing new financing instruments and addressing market distortions affecting sustainable energy development. A key component of the SEI has been to establish a focused and productive dialogue with donors, which has resulted in the definition of an effective approach built on a broad range of donor experience and on significant funding support.
The SEI’s original donor fund mobilisation target over three years was €100 million. Three years after its launch, this target was significantly exceeded with the mobilisation of €97 million for technical cooperation (TC) and €121 million for investment grants.
Five multi-donor funds and 22 bilateral donors have contributed to Phase 1 of the SEI providing €218 million in technical assistance and grant co-financing. The United Kingdom, Spain, France, Germany and Japan have provided SEI-dedicated funds which have supported a more efficient deployment of TC support to specific SEI activities
SEI areas of activity
The SEI focuses on scaling up sustainable energy investments in the following areas:
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Industrial energy efficiency
Energy efficiency investments in highly energy-intensive industrial processes such as steel manufacturing, aluminium smelting, cement and glass production.
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Sustainable energy financing facilities
Financing facilities through local banks in the countries of operations to support energy efficiency in industrial small and medium-sized enterprises, small scale renewable energy and building energy efficiency projects. Learn more in the Financing facilities fact sheet
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Power sector energy efficiency
Supplying energy efficiency investment for thermal power stations which generate the majority of energy in the region. The ageing energy infrastructure includes a large number of plants with low generation efficiency, high running costs, excessive pollution and GHG emissions. Ageing transmission networks also result in significant energy loss.
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Renewable energy
Renewable energy technology has developed slowly in the transition region and there is significant potential for both new renewable energy sources, such as wind, and for hydropower. The institutional and regulatory framework for renewable energy remains weak.
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Municipal infrastructure energy efficiency
Upgrading neglected municipal infrastructure to provide efficient district heating, public transport networks and water supply systems is central to the EBRD’s mission. Greater energy efficiency can be achieved when the issues of ageing infrastructure and high energy consumption are addressed.
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Carbon market development
While the development of the carbon market could support the financing of low carbon projects, carbon market activity in the region has remained limited. The development of this market requires the creation of new institutions, clear regulatory frameworks and a critical mass of investments.
In depth: Multilateral Carbon Credit Fund.
Full SEI Phase 1 results and case studies are available in the Sustainable Energy Initiative Brochure.
