€1.5 million loan to Agency for Finance in Kosovo for building improvements supported by EU funding
The EBRD is providing a loan of up to €1.5 million to Agency for Finance in Kosovo (AFK), the fourth largest microfinance institution in the country, to increase the financing of the green economy.
The funds will be on-lent for investments in high-performance energy efficiency technologies, materials and solutions in residential dwellings or buildings. The goal is to reduce energy intensity and improve energy efficiency in accordance with the EBRD Green Economy Transition (GET) approach. With these investments households will not only become more energy efficient but will also decrease their greenhouse gas emissions, reducing their impact on the environment.
The loan is provided under the Green Economy Financing Facility (GEFF) for the Western Balkans, a regional facility that has been launched to support residential energy efficiency investments in the Western Balkans. The facility is supported by grant funding from the European Western Balkans Joint Fund under the Western Balkans Investment Framework, the European Union (EU) and Austria.
Nick Tesseyman, EBRD Managing Director, Financial Institutions said: “This is an important loan for us and for Kosovo as it will widen the basis for green investments in a crucial area. The country’s housing stock leaves considerable room for improvement in terms of energy and resource efficiency and it is therefore very important to invest in this area. With the active engagement of our local partner we are confident of achieving significant progress and tangible results already in a short period of time.”
AFK was established in 2000 and provides access to finance to micro and small entrepreneurs in Kosovo, especially in rural areas. It serves the entire territory of Kosovo through a network of currently 20 branches.
Vahdet Anadolli, CEO of AFK said: “In cooperation with the EBRD, AFK has already successfully implemented the KOSEP project. Now, through this additional loan from GEFF, AFK will be able to promote further its social and environmental objectives by financially supporting small-scale energy efficiency projects in Kosovo.”
During 2011-15 the EU joined forces with the EBRD in implementing the Kosovo Sustainable Energy Project (KOSEP) through a blending mechanism of a €3 million EU grant and EBRD financing of €12 million. The purpose was to implement energy efficiency and renewable energy investments in small and medium-sized enterprises and household sectors.
A substantial proportion of the EU’s assistance in Kosovo has been invested in revitalising the electricity sector, and more importantly over €20 million was spent on increasing energy efficiency and another €10 million is earmarked for supporting the upcoming Energy Efficiency Fund.
Furthermore, under the Regional Energy Efficiency Programme (REEP), funded by the EU and implemented in partnership with the Energy Community Secretariat, the EBRD has supported Kosovo to strengthen laws, policies and standards that create a demand-driven market for energy efficiency in buildings.
Luigi Brusa, Head of Cooperation Section at EU Office in Kosovo said: “The EU aims to support Kosovo on enhancing the legal and policy framework in order to attract investments in energy efficiency and renewable energy. Establishment of the energy efficiency fund is crucial for boosting investments in energy efficiency in order to reach the national target. There is a great potential for improving energy efficiency in the public and residential sectors therefore financing mechanisms are needed to support the central and local government to improve the situation.”
The Western Balkans Residential Green Economy Financing Facility was established in 2017 with an initial volume of €85 million for green economy investments in Albania, Bosnia and Herzegovina, FYR Macedonia, Kosovo, Montenegro and Serbia. Partner financial institutions will take credit lines from the EBRD and on-lend for eligible sub-borrowers to finance residential energy efficiency or small-scale renewable energy investments.
In Kosovo, the EBRD has invested more than €300 million in 55 projects to date. The Bank’s strategic priorities in the country are promoting inclusion, the green economy, economic resilience and regional integration.