The loan is the first under the new Kosovo Sustainable Energy Projects Framework (KoSEP), approved by the EBRD Board of Directors on 1 May 2013 and endowed with up to €12 million EBRD finance, €3 million grant support from the EU Office in Kosovo for incentives to the final beneficiaries as well as technical assistance provided by the Government of Norway.

The framework will offer loans for financing of rational energy utilisation and assist small and medium-sized enterprises and residential borrowers in mitigating increasing energy prices and reducing the high intensity of energy use in Kosovo. Companies and households will benefit from incentives dedicated to overcome existing barriers to invest in energy efficiency.

As the first energy efficiency financing facility in Kosovo, KoSEP will address the sector’s currently untapped needs and increase public awareness of potential energy efficiency gains through investment across a wide spectrum of the population.

Kosovo’s current energy market is characterised by relatively high consumption of energy and insufficient generation capacity, which in the winter can only cover 60 per cent of domestic demand. Despite significant potential due to insufficient investment and utilisation in the past, renewable sources of energy accounted for only around 3 per cent of total energy consumption.

As a consequence the Government has adopted a strategy which aims at more than doubling this share by 2015. The programme also includes measures to improve energy efficiency, especially by cashing in on the significant saving potential in households, manufacturing, industry and services. According to a 2007 World Bank study proper insulation could reduce individual household energy consumption for space heating by as much as 35 per cent.

TEB is the fourth largest bank in Kosovo in terms of total assets with a market share of approx. 12 per cent. The bank is 100 per cent owned by TEB Holding A.S. (TEB Holding), which is a 50-50% joint venture of BNP Paribas Group and Çolakoğlu Group, one of the largest privately owned groups in Turkey.

Henry E. Russell, EBRD Director, Western Balkans, Belarus, Moldova and Ukraine, said: “The launch of the KoSEP framework marks our strategic priority to support the sustainable development of Kosovo’s energy sector on a wider scale as outlined in our country strategy. It is not a coincidence that we start our support to the sector from the energy efficiency angle. The framework will demonstrate the benefits of energy conservation and rational energy utilisation for business and households in times of increasing electricity prices. Lower energy costs will strengthen the competitiveness of local enterprises and reduce the burden on households.

Anton Kobakov, Head of the EBRD Office in Kosovo, added: “We are proud to sign this agreement with TEB today and to win a strong partner in Kosovo. We would like to thank especially the EU Office in Kosovo and the Government of Norway for their support to this important initiative.”

TEB chairman Orkun Mungan said: “Our participation in the new framework will allow our bank to broaden our products and develop new skills. This is crucial to strengthen and increase our market position. Furthermore, it will enable us to enter into new customer relations in a market segment with the potential for long-term cooperation as improving Kosovo’s energy generation and consumption will remain a challenge for many years to come.”

Kosovo became a member of the Bank on 17 December 2012 and on 1 May 2013 the EBRD adopted its first full country strategy for Kosovo. However, private sector projects in Kosovo were eligible for EBRD support since 1999, via dedicated externally managed regional funds and projects and via the Bank’s regional facilities for the Western Balkans. Within this scope, since 1999 the Bank had signed a total of 29 projects in Kosovo with a cumulative EBRD investment value of €66 million.