Financing Energy Efficiency Investments for Climate Change Mitigation (FEEI)
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 cost-effective energy efficiency improvements and renewable energy technologies - the main self-financing methods to implement climate change mitigation.
The investment potential for energy efficiency is so large in these countries 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 ratio of risk to returns 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 of how to select and formulate energy efficiency investment projects is often a challenge for local experts.
In order to address these obstacles, in January 2008 the United Nations Economic Commission for Europe (UNECE) began implementing the Financing Energy Efficiency Investments for Climate Change Mitigation Project in the framework of the Energy Efficiency 21 Project (EE 21). The Project is to assist participating countries to enhance their energy efficiency and reduce air pollution and greenhouse gas emissions in order to meet international obligations under the United Nations Framework Convention on Climate Change (UNFCCC) and UNECE environmental conventions.
