Setting up the NEEREA A Joint Initiative of the Central Bank of - - PowerPoint PPT Presentation

The Development of Environmental Projects in Lebanon

Setting up the NEEREA

A Joint Initiative of the Central Bank of Lebanon (BDL) J ( ) and the United Nations Development Programme (UNDP)

Beirut, Lebanon December 2009

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BDL and UNDP Teams

BDL team: M W l H d

• Mr. Wael Hamdan
• Mr. Mohamad Jabri

UNDP team:

• Mr. Edgard Chehab

Mr Charbel Rizk

• Mr. Charbel Rizk
• Ms. Jihan Seoud
• Mr. Pierre El Khoury

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1‐ Why Environmental Projects? y j

$4 000

Yearly National Energy Bill $M (1993-2009)

663.52

$3,500 $4,000

497.01

$2,500 $3,000 Asphalt F l Oil

948.42 899.36 1,651.82 286.15 406.52 354.16

$1,500 $2,000 Fuel Oil Kerosene Gasoil (Mazout) Gasoline Liquid Gas

661 22 759.00 909.17 1,179.98 185.00 246.71 274.76 350.88 337.52 360.93 485.15 634.36 819.11 948.42 94.21 136 26 217.00 239.45 165.86 194.23 270.17 266.45 267.28 264.64

$500 $1,000

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239.62 174.78 240.97 291.00 280.75 224.67 268.77 402.60 312.15 299.37 369.57 503.02 661.22 0.00 115.63 109.75 0.00 185.00 179.09 0.00 136.26 0.00 0.00

$0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

2‐ Why Environmental Projects? y j

According to David O’Reilly, CEO, Chevron: “It t k 125 t th fi t t illi b l f il “It took us 125 years to use the first trillion barrels of oil; We’ll use the next trillion in 30.” “Energy efficiency is the cheapest form of new energy we have.” gy ff y p f f gy According to International Energy Agency (IEA): “On average an additional 1$ spent on more efficient electrical equipment On average, an additional 1$ spent on more efficient electrical equipment, appliances, and buildings avoids more than 2$ in investment in electricity supply” In Lebanon, 1 kWh of energy supplied by Electricité du Liban (EDL) costs the consumer around 0.11 USD while it costs the Government of

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Lebanon (GoL) around 0.32 USD. Accordingly, every 1 USD saved by the consumer is effectively 2.9 USD saved by GoL.

3‐ Why Environmental Projects? y j

The energy audit at the Beirut International Airport (BIA): A i t t f d 4 65 Milli USD l d t l An investment of around 4.65 Million USD can lead to annual energy savings of around 2.13 Million USD (a reduction of around 42% of the total energy bill), thus a simple payback period of 2.18 years. gy p p y p f y The energy audit at Casino du Liban (CDL): An investment of around 650 000 USD can lead to annual energy savings of An investment of around 650,000 USD can lead to annual energy savings of around 488,000 USD, thus a simple payback period of 1.33 years. Th i t l j t k t i L b d i t t i The environmental projects market in Lebanon needs investments in the range of millions of US Dollars.

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4‐ Why Environmental Projects? y j

.. Because environmental projects help protect the environment! (every 1 kWh consumed in Lebanon emits 0.833 kg of CO2)

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In Summary: y

Developing environmental projects has a lot of benefits: 1 D i th t ’ bill d th h l i th 1‐ Decreasing the country’s energy bill, and thus helping the national economy; 2‐ Reducing the depletion of natural resources and investing in cheaper types of energy; 3‐ Leveraging considerable local investments and decreasing the burden on Lebanese institutions and industries; 4‐ Ensuring a healthier approach to development and protecting the environment (reduction of GHG emissions) p g

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Why NEEREA? y

Investments

Financial Support

• f the Ministry of

Finance Support of the GoL- Ministry of Energy

Investments

• f Millions
• f USD in

the

BDL Intermediary

Grant Funding Finance Energy UNDP Technical

the Lebanese market ( i

Circular No. 197

Funding by EU and

• thers

Technical Knowhow‐ Expertise

LCEC

(environm‐ ental projects) fi d b

LCEC Marketing the Program

LCEC Awareness: Banks & Beneficia‐ ries

financed by local commercial

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banks

NEEREA is simply a WIN‐WIN vehicle!

DEFINITION

The “National Energy Efficiency and Renewable Energy Account” (NEEREA) i ti l hi l / h i / l tf b ilt th Ci l (NEEREA) is a national vehicle/mechanism/platform built on the Circular

• No. 197 launched in June 26, 2009 by the Central Bank of Lebanon (BDL).

NEEREA is dedicated to support the financing of energy efficiency and renewable energy (EE and RE) projects all over Lebanon. NEEREA aims at the effective implementation of EE and RE projects in p p j Lebanon by Lebanese commercial banks through offering both technical and financial support. NEEREA is managed by the Central Bank of Lebanon (BDL) and the United Nations Development Programme (UNDP) with the support of the Ministry of Finance the Ministry of Energy the European Union and

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the Ministry of Finance, the Ministry of Energy, the European Union and

• ther potential organizations.

Players Involved y

The Central Bank of Lebanon (BDL) Th U it d N ti D l t P (UNDP) The United Nations Development Programme (UNDP) The Ministry of Finance (MoF) The Ministry of Energy (MEW) y gy ( ) The Lebanese Center for Energy Conservation (UNDP‐LCEC) The European Union (EU) The Ministry of Environment (MoE) The Ministry of Environment (MoE) The Banks Association of Lebanon The Lebanese commercial banks Oth i t ti l i ti Other international organizations Other local NGO’s

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Basic Concepts of NEEREA p

Commercial Banks Reserves at BDL

P il bl

Investment by Banks in Environmental

Process available through the Circular

• No. 197 by BDL

At 0% “interest”

Investment by Banks in Environmental Projects

3% “spread”

Covered by NEEREA (EU and/or MoF

Equal Installments 3% spread Risk Guarantee

(EU and/or MoF funding) Covered by NEEREA (UNDP/LCEC

Loans by Banks to Beneficiaries to

Technical validation

(UNDP/LCEC technical team) Covered by NEEREA

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Loans by Banks to Beneficiaries to implement Environmental Projects

Covered by NEEREA (BDL/UNDP coordina./ marketing)

Accounts within BDL

Ministry

The

15 Million USD Grant Account to cover the “spread” 10 Million USD Account to cover the risk

Ministry

• f

Finance

The European Union (EU)

Bank Reserves to be used in

Annual Financial

EE and RE Projects (Target of 100 Million USD‐

• ver 5 years)

Commitment of 500K USD UNDP LCEC

Validation

Lebanese Commercial Banks

UNDP

Validation

UNDP LCEC

Promotion Marketing

Beneficiary (Loan at 0% interest, no risk)

Private 3rd Party Companies

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An “Environmental Project” j

‐ For NEEREA, an “environmental project” is a project in energy ffi i d bl efficiency and renewable energy ‐ For NEEREA, an “environmental project” is a actual implementation p j p project including engineering activities, supply and installation of products (studies do not qualify) ‐ For NEEREA, an “environmental project” is a construction project (excluding wind farms, landfills, street lighting in villages, etc.) ‐For NEEREA, an “environmental project” is either a new construction project or an existing one (covering incremental costs)

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p j g g

Selecting “Environmental Projects” g j

Existing Construction P oject New Construction P oject Project Project Building design Conduct an energy (consultancy work) “Green Building” gy audit Review and approval Review and approval g design component Review and approval by NEEREA team Review and approval by NEEREA team Q lif NEEREA Q lif NEEREA

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Qualify as a NEEREA project Qualify as a NEEREA project

“Existing Project” in Details g j

‐ An existing facility is operational and has an annual energy bill A lifi d ESCO (E S i C ) d t ‐ A qualified ESCO (Energy Service Company) conducts a comprehensive energy audit to the facility ‐The results of the audit shows that a certain investment in energy gy efficiency and renewable energy systems can lead to considerable annual savings ‐ The selected implementations are reviewed by LCEC The selected implementations are reviewed by LCEC ‐ The LCEC approves the implementations to be financed by NEEREA ‐ The beneficiary submits an application form to any commercial bank t t th l to get the loan

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“Existing Project” in Details (cont’d) g j

( )

LCEC Bank Account‐ National Energy Efficiency and Renewable Energy Lebanese Center for Energy (Starting 500,000 USD)

Bank to return 50% to LCEC‐ after loan release

gy y gy Account (NEEREA) Commercial Bank 1 Commercial Bank 2 Commercial Bank N Lebanese Center for Energy Conservation (LCEC) B fi i t

Beneficiary to pay 50% of audit cost to launch the study LCEC to pay 70% to ESCO‐ after study

LCEC to pay 30% to ESCO‐ after loan release

Beneficiary to submit: ‐ Approved LCEC Report including

Beneficiary

. . .

ESCO 2 ESCO 1 ESCO 7

‐ ESCO to conduct Energy Audit at the Beneficiary’s facility

g Investment needed

Sustaining the

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facility ‐ ESCO to prepare Energy Audit Report

Sustaining the Audit Market!

“Existing Project” in Details (cont’d) g j

( )

‐ LCEC: more than 120 energy audits all over Lebanon; numerous ff h i d tt ti i t t

• ffer huge energy savings and attractive investments

‐The list includes: City Mall, Hotel Dieu, Ain WeZein Hospital, y p Haykal Hospital, Phoenicia Hotel, Nabatieh Hospital, Studio Vision, Sour Rest House, Lefico, PPB Structures, Pepsi Cola, Coca Cola, Pampa Pampa

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For 58 Facilities:

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“New Project” in Details j

‐ A developer plans to build a new construction facility A lt d l th j t ‐ A consultancy company develops the project ‐ A qualified company (could be the consultant) adds the “green building” components to the basic project g p p j ‐ The design can be done according to selected international standards (LEED, BREEAM, ISO, etc.) ‐ The UNDP/BDL/LCEC team reviews the project and approves the The UNDP/BDL/LCEC team reviews the project and approves the design ‐ The LCEC approves the implementations to be financed by NEEREA ( i th i t l t) (covering the incremental cost) ‐ The beneficiary submits an application form to any commercial bank to get the loan

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g

“New Project” in Details (cont’d) j

( )

National Energy Efficiency and Renewable Energy Lebanese Center for Energy gy y gy Account (NEEREA) Commercial Bank 1 Commercial Bank 2 Commercial Bank N Lebanese Center for Energy Conservation (LCEC) B fi i t

Beneficiary to pay the cost of the study to the

Beneficiary to submit: ‐Approved LCEC Report including

Beneficiary

. . .

NGO 2 NGO 1 NGO N

‐ Certified NGO/Company to conduct Green Building Study based on the

y NGO/Company

g investment needed 20

based on the designer/consultant drawings and specs

LEED Assessment

• 1. Site Planning

2 W t M t

• 2. Water Management
• 3. Energy Management
• 4. Material Use
• 5. Indoor Air Quality
• 6. Innovation and Design

Process Process “G B ildi ” “Green Buildings” are certified on a voluntary, consensus‐based

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rating system.

“New Project” Incremental Cost j

PLATINUM

6 8%

Conv

PLATINUM

(2 buildings)

GOLD

(9 buildings)

6.8% 2.2%

ventional Bu

SILVER

(21 buildings)

1.9%

uilding Cost (

Average for offices and schools, based on 40 buildings in the US (ref. EEG)

.66%

CERTIFIED

(8 buildings)

(100%)

g , g ( )

‐ In Lebanon, the incremental cost would be higher.

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‐ NEEREA will cover the loan for the additional incremental cost.

Launching NEEREA g

‐ NEEREA will be announced in a major PR event in presence of: Mi i t f Fi ‐ Minister of Finance ‐ Minister of Energy ‐ BDL governor and vice‐governors g g ‐ UNDP Resident Representative ‐ NEEREA will be covered in all TV stations radios newspapers and NEEREA will be covered in all TV stations, radios, newspapers, and magazines

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Marketing and Communication g

‐ National marketing campaign to launch and t th NEEREA SAMPLE AD promote the NEEREA ‐ Adds (sample) in newspapers, radio spots, ( p ) p p p TVC ‐Articles in newspapers TV’s radio stations Articles in newspapers, TV s, radio stations ‐ Direct marketing efforts with banks and b fi i i (ALI A i ti f h t l beneficiaries (ALI, Association of hotels, hospitals, etc.)

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Technical Training

‐ In close cooperation with the Training and Development Department f BDL ifi t i i ti iti t t h i l l f L b

• f BDL, specific training activities to technical personnel of Lebanese

commercial banks ‐ A series of seminars and workshops in Lebanon for transfer know how to the various target groups will be conducted under the supervision of the Training and Development Department supervision of the Training and Development Department

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NEEREA Proposed Structure p

NEEREA Management: NEEREA Advisory Committee: MoF NEEREA Management: BDL and UNDP MoF MEW EU Banks Association Banks Association Kafalat NEEREA E e uti e NEEREA Executive Arm: UNDP‐ LCEC

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Thank you! Thank you!

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