Energy Efficiency in Public Sector Buildings in Bosnia and Herzegovina

1. Energy efficiency inpublic sectorbuildings in Bosnia and Herzegovina Sanjin Avdic UNDP CO BiH

2. Overview • The Context • The Green Growth Model • The Bosnian model used for public sector buildings(participation / involvement & stepping out) • Conclusion

3. The Context „We know how geothermal energy works. We know what it takes to build cars with better mileage. We know how to insulate homes or how to put solar panels on the roof. The question is whether we have the guts to redirect the flow of money...“ - Daniele Ganser

4. The Context „The simple act of retrofitting these buildings to make them more energyefficient –insulation, new windows and doors, roofing, sealing leaks, modernizing heating and cooling equipment - is one of the fastest, easiest and cheapest things we can do to put Americans back to work while saving families money and reducing harmful emissions.“ - Barack Obama

5. The Context • In CC and PCC countries it is all about two things • ... Decision to redirect the flow of money – due to low energy and water costs (average) • ... Opportunity to generate employment – due to relatively high unemployment

6. The Context • We know how to increase energy efficiency (EU directive / targets) • We know how to use renewable energy (EU directive / targets) • Fastest, easiest and cheapest option to generate employment • Saving money • Reducing emissions (EU directive targets) The question is whether we have the guts to redirect the flow of money?

7. The Context • Why increase the energy efficiency / utilize renewable energy? • Economic savings • Environment protection • Climate change mitigation • The primary objectives

8. The Context • Why increase the energy efficiency / utilize renewable energy in SEE? • Employment • Entrepreneurial development • Economic development • Parallel aims through the achievement of objectives • Very importnat factors for CC and PCC governments

9. The Context • Do we have the guts to redirect the flow of money? • Employment • Entrepreneurial development • Economic development • Parallel aims through the achievement of objectives • Very importnat factors for CC and PCC governments

10. The Context • Do we have the guts to redirect the flow of money? • Transformation from subsidized energy / energy carriers to subsidize measures for increasing energy efficiency and use of renewable energy • Creating an favorable environment for investment in EE and RES • Why? • Energy efficiency / RES = new entrepreneurial economy branches • Energy efficiency / RES = Employment • How...?

11. LEGISLATION(fulfillment of obligations, laws, bylaws, market meh.) The Context FINANCIAL MECHANISMS ENTREPRENEURSHIP(marketing, conferences, pilot projects, associations, protection of interest) • How? Enabled environ. fo EE / RES POPULATION / GENERAL PUBLIC(savings, costs reduction)

12. The Context • A country’s strategy / commitment

13. The Context • Why support EE / RES investments?

14. The Green Growth Model INCREASING EE • MODEL ON GENERATION OF NEW EMPLOYMENT IN CC & PCC ENERGY COST REDUCTION INCREASE INVESTMENTS / Market mechanisms DEVELOPMENT OF NEW PROFESSIONS INCREASING PURCHASING POWER DEVELOPMENT OF EXISTINGPROFESSIONS MARKET DEVELOPMENT ECONOMIC DEVELOPMENT

15. The Green Growth Model • Correlation of economic branches!! EMPLOYMENT

16. The Green Growth Model • High energy conservation potential due to high inefficiency (residential and non-residential sector, industry, services) • In most countries there is high EE and renewable energy utilization potential However, • Low energy prices (utilities) • Cross-subsidizing • Relative low motivation for EE (private sector/SMEs are exception) • EE/RES legislation is a process • The EE/RES investing environment is in early stage • (relative high) interest rates from commercial FI

17. Energy markets & energy related context 2nd however, • Energy prices will raise • Effects on financial indicators (NPV, IRR) of energy projects • Motivation to save energy, utilize renewables will raise • The investing environment (financial mechanisms) has to follow those processes e.g. Establishment of local supporting financial mechanism • Status of EE/RES on the political agenda very important (does the country want to deal with it in a strategic manner?)

18. EU Directives and its effects • EED • EPBD • RES related directives • LCP directive • ETS... • Beside revenue generation, emission reduction, reinvesting possibilities - employment generation very important to local gover.

19. The Green Economic Development project

20. The Green Economic Development project • Project duration: 2014 – 2020 (1st and 2nd phase) • Project budget: 22m € • Government of Sweden support: more than 10m € • Environmental Funds in BiH, Cantons, end-users, UNDP: more than 12m € • Key goals: • Develop and adopt self-sustainable financial mechanism for green economic growth(through EE and RE project financing) • Achieve budget cost savings & Generate employment of domestic workforce • Increase public awareness and understanding of human development as a result of RE and EE project benefits

21. The Green Economic Development project

22. The Bosnian model used forpublic sector buildings • Description

23. The Bosnian model used forpublic sector buildings • Generate interest 84 schools 17 kindergarten 8 social-care institutions 14 health-care institutions 14 admin buildings

24. The Bosnian model used forpublic sector buildings • Generate interest • Number of EE infrastructure projects implemented with grant co-financing modality – 137 • Number of beneficiaries– more than 109,000, of which more than 45,000 children • Total energy consumption savings within implemented public sector buildings – more than 25 GWh • Total energy cost savings within implemented public sector buildings –2 million EURannually • Amount of direct CO2 emission reduction – 11.300 t • Number of generated “green jobs” – 1.700 • Amount of co-financing infrastructure projects during involvement(by end- users/institutions/Environmental Funds) – more than 5 mil € • Number of people reached through marketing campaign – 1,500,000

25. The Bosnian model used forpublic sector buildings • Generate interest • Green jobs - do the empirical study! 1m € of investments into EE measures inpublic sector buildings in BiH 98 full-time equivalent (annual) jobs(excluding indirect generated employment)

26. The Bosnian model used forpublic sector buildings • Create ownership

27. The Bosnian model used forpublic sector buildings • Develop self-sustainable financial mechanism for investments phase 1 phase 2 phase 3 phase 4 Grant financing Soft loans & performance based grants Revolving fund Soft loans (low interest rates) loans (lower interest rates than comme.) Revolving fund with commercial FI ESCO guarantees Forfeiting

28. The Bosnian model used forpublic sector buildings • Decrease grant financing, advocate the „EE/RES is revenue generating“ fact, create appetite for FIs, provide soft TA (if necessary) • Decrease grant support • Leads to increased co-financing by end-users (if the „generate interest“ phase has been done properly) • 2015 – 2017, up to 50% grants from the project • 2018 – 2020, up to 33% grants from the project • maybe in 2021 – 2023, up to 10% grants from the project(or move towards residential buildings) • IFIs, EFs Revolving Fund, ...

29. The Bosnian model used forpublic sector buildings • Decrease grant financing, advocate the „EE/RES is revenue generating“ fact, create appetite for FIs, provide soft TA (if necessary) • BiH‘s GCF project goal - market transformation for EE investments into public building sector

30. The Bosnian model used forpublic sector buildings • Decrease grant financing, advocate the „EE/RES is revenue generating“ fact, create appetite for FIs, provide soft TA (if necessary) • BiH‘s GCF project goal - market transformation for EE investments into public building sector

31. The Bosnian model used forpublic sector buildings • Description • Generate interest (i.e. show savings, employment, reallocation of savings) • Create ownership • Develop and adopt self-sustainable financial mechanism for investments • Decrease grant financing, advocate the „EE/RES is revenue generating“ fact, create appetite for FIs, provide soft TA (if necessary)

32. The Bosnian model used forpublic sector buildings • Linkages with SDGs

33. Conclusion • We know how to increase energy efficiency (EU directive / targets) • Fastest, easiest and cheapest option to generate employment • Ensure seed investments! • The question is whether we have the guts to redirect the flow of money

34. Thank you for your attention! Sanjin Avdic, Sector Leader, UNDP CO BiH