Progress of Belarus Sustainable Energy Finance Facility of EBRD (BelSEFF)

Progress of BelSEFF

Dzhakhongir Shamsiev, a Principal Banker from Financial Institutions at EBRD London Headquarters, gave an interview to the news agency PRIME-TASS, where he commented on the progress of Belarus Sustainable Energy Finance Facility of EBRD (BelSEFF), which is implemented by a consortium of Czech companies KPMG Ceska republika, s.r.o. and Enviros, s.r.o. in cooperation with audit and advisory company KPMG Ltd. (Belarus).

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BelSEFF

The official web site of BelSEFF www.belseff.by presents case studies of projects successfully implemented within the framework of EBRD's Belarus Sustainable Energy Finance Facility.

Each of these projects is a success story of a Belarusian company making a decisive step forward to becoming energy efficient and enhancing its competitiveness on the market or to producing energy from renewable sources that help to decrease pollutant emissions.

Each project received a technical support from BelSEFF team to ensure that the best practice processes and best available equipment are employed to maximise the benefits for the project owner and the stakeholders.

MINSK, 16 March- PRIME-TASS. In 2014 the European Bank for Reconstruction and Development (EBRD) financed Belarus’ projects aimed at enhancing energy efficiency for a total amount of around 23 million USD. Mr. Dzhakhongir Shamsiev, Principal Banker at Financial Institutions Department, EBRD London headquarters, provided this information during an interview to PRIME-TASS. 

“Total amount of projects implemented in the framework of Belarus Sustainable Energy Finance Facility (BelSEFF) in 2014 was 12.2 million USD. Since the launch of this Facility (in late 2012 - Editor’s note), more than 40 projects were financed totaling about 17 million USD”, Mr. Shamsiev said. 

According to Mr. Shamsiev the BelSEFF was officially launched in late 2012. The total allocated financing under this Facility amount to 50 million USD. The EBRD provides funding to borrowers under the BelSEFF via partner banks, represented at this time by BPS-Sberbank OJSC, Bank BelVEB OJSC, Belgazprombank JSC, MTBank CJSC.  

Mr. Shamsiev also said that the EBRD does direct financing of some projects in Belarus (not via partner banks). For the period from 2006 to 2015 the Bank financed 16 such projects for a total amount of 83 million EUR. This amount included of 11 million EUR of direct financing of EBRD for energy efficiency projects in Belarus in 2014. 

Giving comments on special aspects of the BelSEFF implemented by the bank in Belarus, Mr. Shamsiev noticed that granting funds is just one of the Facility components. 

“Proving technical support and consulting services is a separate component. In addition close consultations with state bodies in the area of regulating renewable energy sources is an important component of BelSEFF” Mr. Shamsiev said. 

According to Mr. Shamsiev the EBRD selected a consultant that provides support to partner banks, as well as to sub-borrowers. In this case, it is a consortium comprised of two Czech companies, KPMG Ceska republika, s.r.o and engineering company Enviros, s.r.o., in cooperation with KPMG LLC (Belarus), which provides audit and advisory services. Project consultant’s works are financed by the Ministry of Finance of the Czech Republic. 

In his comments to PRIME-TASS Vassily Tarasevich (KPMG LLC), a manager of EBRD’s BelSEFF, explained that three targets of BelSEFF investments are: energy saving projects and measures at energy intense industries; energy saving projects in the field of commercial real estate; renewable energy sources (wind power, solar power, water power etc). 

“The main target of BelSEFF is small and medium-sized private companies operating in three sectors noted above. The interest of companies in this Facility is rather high due to market competition that stimulate companies to reach a certain level of efficiency through energy saving initiatives among other measures. Moreover the interest rate applied within this Facility may be more attractive compared to regular bank loans”, Mr. Tarasevich noticed. 

According to him, the rates vary specific projects and clients. The EBRD does not regulate pricing for the partner banks in granting energy loans to the sub-borrowers. However, for example, Belgazprombank OJSC announced the possibility of financing such projects at 8.5% per annum.

As Mr. Tarasevich noted, the company applying for a loan within BelSEFF shall be a private company and also meet the requirements of creditworthiness of the Belarusian partner bank of BelSEFF. 

“We analyze the project (technical solutions, expected results, financial indicators, risks). In addition, for the projects in industrial sector and commercial real estate the minimum level of energy savings per unit of production after implementation of the project should be at least 20% to the original level”, Mr. Tarasevich clarified. 

He also provided examples of projects implemented, such as installation of mini-CHP for Kalinkovichi Dairy Plant PUE (Gomel region) for a total amount of 2.93 million USD. The lending resources of the EBRD within this project amounted to 1.67 million USD. The project was implemented by a foreign private company Torsti LLC. 

Another example of implementation of projects within BelSEFF is installation of heat and cold recovery for cheese production at Belovezhskie Syry JOJSC (Brest region) for a total amount of 217 thousand USD which was fully covered by the BelSEFF loan. 

“The BelSEFF is a pilot project for Belarus. Our main objective within the Facility is not to reach a certain quantity of financed projects, but the quality of such projects. It is important for us to demonstrate that financing projects in sustainable energy can be commercially feasible. We hope that our positive experience will be adopted by both Belarusian banks, as financing institutions, and Belarusian enterprises, including state-owned ones. We expect that the approach to energy use at enterprises will change”, Mr. Shamsiev pointed out.

KPMG is a global network of professional firms providing audit, tax and advisory services. KPMG employs more than 162,000 people in 155 countries all over the world.  KPMG LLC represents KPMG in the Republic of Belarus. KPMG has been working in the Belarusian market since 2007 and it is one of the key national audit and consulting companies. 

Activity of the EBRD in Belarus is defined by the current country strategy adopted in March 2013 and primarily focused on private sector development. As at 1 January 2015, the bank provided more than 1.6 billion EUR within 70 projects, mostly in the private sector.

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