UNUnited Nations Economic Commission for Europe

Press Release



Geneva, 3 February 2006 - Eastern European countries have taken a small but very significant step in reducing greenhouse gas emissions according to the final report of their United Nations project issued today.1 The energy efficiency investments participating countries have shown how energy savings in their cities, power stations and factories can help achieve the global aims of the Kyoto Protocol under the UN Framework Convention on Climate Change (UNFCCC).

The inefficient and polluting energy systems in Eastern Europe and the Commonwealth of Independent States (CIS) are glaring economic and environmental problems. But they can provide some of the most promising self-financing opportunities to reduce global greenhouse gas emissions. With only 6 per cent of the world’s population, these countries produce some 12 per cent of greenhouse gases. Opportunities to cut CO 2 emissions can come from the vast potential for cost-effective energy efficiency investments in economies in transition.

With the support of the United Nations Foundation and co-financing partners, the Energy Efficiency 21 (EE21) project ‘Energy Efficiency Investments for Climate Change Mitigation’, has demonstrated that it is possible to identify, develop and finance energy efficiency and renewable energy investment projects that will reduce greenhouse gas emissions in Eastern Europe and the CIS. This is an important step for energy efficiency market formation in economies in transition and essential for further progress.

The investment potential in Eastern Europe for energy efficiency projects with a payback period of less than five years is estimated to be between US$ 5 and US$ 10 billion. This investment volume is so large that the private sector needs to participate in financing such projects. The genuine participation of the private sector in turn will require the formation of a market that can provide opportunities for large investments to be made with low transaction costs that produce adequate returns at an acceptable risk within a reasonable period of time.

The final report describes the results of the five-year project including some US$ 60 million of energy efficiency investment project proposals. The World Bank and other investors have approved financing for eighteen investment projects in Belarus, Bulgaria, Russian Federation and Ukraine for a total of US$ 14.9 million. These investments would reduce CO 2 emissions by an estimated 136,000 tonnes per year. In comparison, this is equivalent to the annual environmental benefits of:

  • Eliminating the CO2 emissions of 68,000 cars; or
  • Offsetting the use of 610 railroad cars of coal;
  • or Planting 15,000 hectares of forest.

These are modest but demonstrably significant investments in four countries representing 18 projects in district heating systems, factories, street lighting and public buildings. They have been carefully documented in an electronic publication2 issued by the project. It shows a range of costs for carbon emissions reductions averaging about US$ 110 per tonne of CO 2 per year. The CD-Rom based publication includes the complete inventory of some 60 pre-feasibility study business plans, an investment project pipeline for further work.

The capacity to finance energy efficiency investments repeatedly coupled with the required energy policy reforms and financial engineering skills of local experts would open up a vast market in Eastern Europe and the CIS.

A new project under Energy Efficiency 21 for eastern and south-eastern Europe, Financing Energy Efficiency and Renewable Energy Investments for Climate Change Mitigation, will begin operations in 2006 with co-financing of the UN Foundation, Fonds Français pour l’Environnement Mondial (FFEM), and the United Nations Environment Programme / Global Environment Facility (UNEP-GEF). It will promote energy efficiency market formation by providing the capacity for many more projects to be financed with larger carbon emissions reductions through technical assistance in the recipient countries coupled with the development of an Investment Fund.

For further information please contact:

Gianluca Sambucini
Energy Efficiency 21 (EE21)
Industrial Restructuring, Energy and Enterprise Development Division (IREED)
United Nations Economic Commission for Europe (UNECE)
Palais des Nations, Bureau 348
CH - 1211 Geneva 10, Switzerland

Telephone: +41 (0)22 917 1175
Telefax: +41 (0)22 917 0178
E-mail: gianluca.sambucini@unece.org

Website: http://www.unece.org/ie/ and http://www.ee-21.net


1 The Final Report on Project Implementation of ‘Energy Efficiency Investment Project Development for Climate Change Mitigation’ (ECE-CIS-99-043) is available at http://www.unece.org/ie/ and http://www.ee-21.net.

2 Financing Energy Efficiency Investment Projects , ECE Energy Series No. 30, CD-Rom, United Nations Sales No. GV.E.04.0.13, ISBN 92-1-101-078-0 (ECE/ENERGY/63).

Ref: ECE/IREEDD/06/P01