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ESCO Concept Finds Its Way in Eastern Europe
EBRD loan for Polish-Danish ESCO to promote energy efficiency in Central Europe
One of the current concepts used to finance energy efficiency is that of Energy Service Companies (ESCOs), which make energy-efficiency investments and are paid using part of the resulting savings. This concept is promoted by EBRD as way forward for Central and Eastern Europe. At the end of 1997, one of the first ESCO loans was given to ìESCO Internationalî, a company incorporated in Poland but owned 100% by Danish investors. The company will implement combined heat and power plants (CHP) and energy savings in Poland as well as in other Central European Countries. To do this, it is supported by a loan of $15.6 million from the European Bank for Reconstruction and Development (EBRD) and $2.6 mill. from the Danish Investment Fund for Central and Eastern Europe. The relation between ESCO international and its clients will be guided by Energy Performance Contracts (EPC), according to which ESCO International shall design, build, own, operate, and transfer CHP plants and shall optimise the efficiency of the energy supply to its clients. The individual EPCs will have a maturity of up to ten years, usually with a fixed monthly leasing fee to be paid to ESCO International. At the end of the period of the EPC, the plant shall be transferred to the client free of charge or for a small fee. At the start, the client is obliged to pay a deposit of 15% of the investment. ESCO International will concentrate its activities on energy-intensive, creditworthy industrial clients and on various public entities such as hospitals and district heating companies. Peter Rasmussen, Managing Director of ESCO International, commented, ìWe welcome the challenge of being among the pioneers in implementing the ESCO concept. This operation has exceptional opportunities.î But, in spite of the large opportunities, it is still too early to judge whether ESCO International and similar companies can realize a large part of the energy-efficiency potential of Central Europe, attracting the necessary private and multilateral finances. Sources: - CEE Bankwatch Network, Yury Urbansky, e-mail: urbik@gluk.apc.org, - Energi og Planlægning (Energy & Planning) Netnews, Denmark, June, ë97. - ESCO International, att. Collin Boyles, e-mail: cpb@esco.dk.
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ISSUE #20 (56KB - text only) 33 pages (1998-02-01)
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