Well-developed banking sector, Has worked well in some Needs a relatively Is the banking USAID DCA in FYR 7. Risk-sharing program are liquid and willing to accept some Central and Eastern mature banking sector mature Macedonia, (such as partial credit risks but have a perception of high risk European countries sector and eligible enough? Bulgaria and other guarantee) with respect to EE projects borrowers countries May scale up commercial How many Sufficient market activity to develop financing Poor experience of municipalities are Bulgaria, CEEF project pipeline WB and in creditworthy? (Central/Eastern some countries Europe), China, with respect to Croatia, Hungary, public agencies Poland Requires well-developed public sector Mobilizes commercial Only makes sense Are financiers Bulgaria 8. Commercial financing, credit and rating systems financing can deliver for very large willing and able to Denmark bonds scale and be sustainable bundles of projects lend to public Financiers willing and able to lend to India sector? public sector for EE projects Elements of competition Only highly U.S. can help lower financing creditworthy How many public municipalities with strong costs agencies can use agencies are technical capacity willing to bundle these schemes creditworthy and many EE projects together Can help address have borrowing overcollateralization/short Relatively high capacity? tenor issues transactions costs Large, credible local and/or Mobilizes commercial Relies on local How many public China 9. Vendor credit, leasing international vendors able and willing financing which can banks and leasing agencies are EU to finance public EE projects deliver scale and be companies creditworthy and U.S. sustainable have borrowing Local bank financing available for Serves only very capacity? vendor leasing Can help address creditworthy public agencies, Creditworthy public agencies able to tenor issues sign long-term vendor contracts Vendors must Financing and assume substantial Public agencies able to retain energy procurement in one debt and offer cost savings, pay based on contract term financing consumption Lease may not count Only some building against public debt equipment suited for leasing (lighting, SWH, boilers)
7. Risk-sharing program (such as partial credit guarantee) Well-developed banking sector, are liquid and willing to accept some risks but have a perception of high risk with respect to EE projects Sufficient market activity to develop project pipeline Has worked well in some Central and Eastern European countries May scale up commercial financing Needs a relatively mature banking sector and eligible borrowers Poor experience of WB and in some countries with respect to public agencies Is the banking sector mature enough? How many municipalities are creditworthy? USAID DCA in FYR Macedonia, Bulgaria and other countries Bulgaria, CEEF (Central/Eastern Europe), China, Croatia, Hungary, Poland 8. Commercial financing, bonds Requires well-developed public sector credit and rating systems Financiers willing and able to lend to public sector for EE projects municipalities with strong technical capacity willing to bundle many EE projects together Mobilizes commercial financing can deliver scale and be sustainable Elements of competition can help lower financing costs Can help address overcollateralization/short tenor issues Only makes sense for very large bundles of projects Only highly creditworthy agencies can use these schemes Relatively high transactions costs Are financiers willing and able to lend to public sector? How many public agencies are creditworthy and have borrowing capacity? Bulgaria Denmark India U.S. 9. Vendor credit, leasing Large, credible local and/or international vendors able and willing to finance public EE projects Local bank financing available for vendor leasing Creditworthy public agencies able to sign long-term vendor contracts Public agencies able to retain energy cost savings, pay based on consumption Mobilizes commercial financing which can deliver scale and be sustainable Can help address tenor issues Financing and procurement in one contract Lease may not count against public debt Relies on local banks and leasing companies Serves only very creditworthy public agencies, Vendors must assume substantial debt and offer financing Only some building equipment suited for leasing (lighting, SWH, boilers) How many public agencies are creditworthy and have borrowing capacity? China EU U.S. term
108848-ESM-P157135-PUBLIC-EE-Options-Paper-Kosovo-ENGLISH.docx