This public-private partnership (PPP) with EBRD will establish an innovative structured financing facility to serve four GEF countries in the Southern Mediterranean. The program will catalyze the creation of an energy efficiency and Energy Services Company (ESCO) market in Morocco, Tunisia, Egypt and Jordan. In addition to saving energy and reducing greenhouse gas (GHG) emissions from the public sector, the program will contribute to the growth of a local supply chain in the industrial sector and leading to replication. The GEF/EBRD PPP program supports the emergence of a market for energy efficiency that would not materialize otherwise.
Energy efficiency investments are the priority, but some renewable energy technologies will also be included. Examples of investments include, but are not limited to, the following:
- On site co- or tri-generation of heat, electricity and cooling (all heat, electricity and cooling shall be used on-site).
- Rehabilitation of boilers (enhanced controls, economizers, improved insulation, regenerative burners, automatic blow-down, etc.)
- Replacement of old and low efficient lighting with an energy efficient option (fluorescent bulbs, LED light bulbs, etc.)
- Implementation of renewable energy systems in buildings (e.g. solar water heaters, roof top solar PV, biomass boilers, geothermal energy utilization for heating and/or cooling with or without heat pump, surface water energy utilization for heating and/or cooling with heat pump, solar heating and/or cooling).
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A Thermo-Solar Power Plan in Morocco
The focal area is CCM-2, Energy efficiency. However, the funding will draw $15,000,000 plus agency fee of $1,200,000 from the private sector set-aside.
The GEF funding will be invested as junior shares with the most exposure to loss. Other investors will be offered more senior positions, with less risk and more predictable returns. By offering the GEF funding as first-loss and at concessional terms, risk averse investors (e.g., pension funds) will be catalyzed to invest in energy efficiency projects. At the end of the structured facility, GEF will receive any remaining principal and a 1% dividend.
Co-financing is excellent, with a ratio of 1:9.4. The innovative use of structured financing is expected to maintain strong private sector investment so that the funding facility will continue after the GEF participation is completed, contributing to sustainability and scale for ESCO financing in Northern Africa.
The program is estimated to contribute emissions reductions of 13.5 million tons of CO2 eq over the lifetime of the investments.
For more information contact Asari Efiong, EBRD, at EFIONGA@ebrd.com
Source: /gef/project_detail?projID=5318