The ‘Energy Efficiency and Renewable Sources Fund’ (EERSF), formerly known as the ‘Bulgarian Energy Efficiency Fund’ (BEEF), is a revolving energy efficiency fund under the form of an independent legal entity (it operates as a public private partnership) established in 2005. It got initial funding from the Global Environment Fund (GEF) through the World Bank’s International Bank of Reconstruction and Development (IBRD), from the Government of Bulgaria, the Government of Austria and from the Bulgarian private sector. It aims at providing revolving project finance and technical assistance for public (municipalities, universities, hospitals) and private sector (businesses and residential) energy efficiency projects in Bulgaria. Since 2011 the Fund also provides funding to demand-side off-grid RES production projects.
The EERSF was part of a broader strategy by the government of Bulgaria to align its policies with EU directives, to enable the necessary institutional development and to reduce the energy intensity of the country which at that time was twice the average value of the European Union and was ranking among the highest in Europe.
Though Bulgaria’s low energy efficiency situation, both in terms of consumption and of production, offered huge potential for energy savings in a cost-effective way, estimated to be about 40% for the existing building stock, 30% for the district heating sector and 30% for the industry, there was an almost non-existing or very deficient energy efficiency finance market obstructing the access to commercial financing of energy efficiency investments.
This situation prompted the Bulgarian government to include in its new Energy Efficiency Act (EEA) -adopted by the Bulgarian Parliament in February 2004- the creation of the Bulgaria Energy Efficiency Fund. This dedicated energy efficiency fund had the mission to build a sustainable market-based capacity for developing and financing EE projects on commercial terms, demonstrate financial profitability of investments in the energy efficiency sector and promote the development of a well-functioning energy efficiency market.
With this Fund the Bulgarian Government had also the ambition of reducing greenhouse gas (GHG) emissions and of contributing to its intention of halving the primary energy intensity of the country by 2020 compared to 2005 levels without reliance on continuing public funding. By the end of 2013 its projects expected to have total energy savings of over 95,000 MWH/year and reduced GHG emissions by 75 KT/year.
Though the Fund does not distribute profits and is fully endorsed by the Bulgarian Government it is operated as a commercially oriented public-private finance facility and it serves three major roles: it is a lending institution, a credit guarantee facility and at the same time a technical assistance provider. It provides technical assistance to Bulgarian enterprises, municipalities and residents in developing energy efficiency and RES projects and then provides their financing or co-financing or acts as guarantor towards other financing institutions or commercial lenders.
From 2005 through 2008 EERSF received funding from its grantors and donors of almost 21,9M BGN (Bulgarian Lev) which corresponds to an approximate amount of 11,2M €. Over 70% of that amount has been granted by the Global Environment Fund (GEF). Funds were used to provide first investment capital for EERSF, to cover start-up and operating costs and energy efficiency capacity building until the Fund reached financial self-sufficiency.
The funding has been used to create a revolving fund which by the end of 2014 has contributed 45,8 BGN (23,4 M €) to 170 projects with a total value of over 67,6M BGN (34,6M €). It has gained international recognition for its innovative approach to EE financing and consulting.