Regional Analysis of Policy Reforms to Promote Energy Efficiency and Renewable Energy Investments
by: Economic Commission for Europe (UNECE)
South-Eastern European, Eastern European and Central Asian countries are confronted with a wide range of economic and environmental problems caused by their inefficient and polluting energy systems. At the same time, their energy economies provide some of the most promising opportunities for reducing global greenhouse gas emissions. This will require the use of costeffective energy efficiency improvements and renewable energy technologies – the main selffinancing methods to implement climate change mitigation.
The investment potential for energy efficiency in these countries is so large that only the private sector can provide the capital needed to achieve meaningful results. This in turn will require a market for energy efficiency in which large investments can be made with low transaction costs at an acceptable risk-to-returns ratio and within a reasonable period of time. At present, private investors do not often finance energy efficiency projects in these countries because dedicated
sources of financing are lacking and local banks are generally unfamiliar with such investments. Another obstacle in financing energy efficiency projects is the absence of policy and institutional support for their implementation. The lack of knowledge and experience on how to select and formulate energy efficiency investment projects is often a challenge for local experts.