Policy Dialog to Support Development of ESCO Projects in the Public Sector

The Western Balkans Regional Energy Efficiency Programme (REEP) supports energy efficiency (EE) projects in the Western Balkan countries with a focus on the public sector. The European Bank for Reconstruction and Development (EBRD) was granted funding for implementing REEP under the European Union (EU) Western Balkans Investment Framework (WBIF). EBRD was to use the funding to continue its activities to support sustainable energy initiatives in the Western Balkans. Based on a pragmatic operational and financing approach, the EBRD’s WBIF-funded undertaking consisted of the following three core components:

• Policy dialog to support the development of an enabling environment for sustainable energy through both ESCO operations and non-ESCO initiatives;
• Technical assistance and grants to support project design and implementation and related capacity development; and
• Financing instruments aimed at facilitating energy efficiency or renewable energy investments based on clear estimates of energy savings and carbon emission reductions.

  As one of the three core components, the policy dialog was to be carried out to help develop an enabling legal framework governing ESCO-based energy efficiency projects.  

Econoler, in a consortium with GFA from Germany, was mandated by EBRD to implement a technical assistance program to help Serbia and Montenegro conduct a policy dialog intended to create an enabling environment for developing an active and sustainable ESCO market. This assignment involved performing the following tasks:

• Task 1: Identify and review relevant primary and secondary legislation and recommend amendments/options to enable Energy Performance Contracting (EPC) structures to meet the regulatory criteria.
• Task 2: Provide support to national inter-agency working groups in the Western Balkan (WB) countries, examining legal and administrative issues to help them evaluate the recommended options.
• Task 3: Provide national working groups in the WB with support for evaluating and approving the drafted legal documents and contract templates.
• Task 4: Support capacity-building and awareness-raising efforts associated with the feasible ESCO/EPC projects identified and related procedures.
• Task 5: Cooperate with the ESCO technical assistance consultancy assignment and other stakeholders.

  The end results of this assignment was the development of an adapted policy and an accepted EPC approach in Serbia, based on the public-private partnership regulation framework, ready to be deployed. It led to the start of a successful project pipeline development mainly in the municipal sector targeting, as a first step, street-lighting systems. In Montenegro, the development of the needed policies were put on hold due to the political situation in the country when the assignment was being carried out.