Pupils at school number 1 in Novodvinsk. The school has benefited from an energy saving project funded by NEFCO.

NEFCO’s Board of Directors has approved an allocation of EUR 6.7 million for financing energy saving projects in Russia and Ukraine. The allocation has boosted the Facility for Energy Saving Credits (ESC) capital base to EUR 12.5 million.

According to a preliminary prognosis carried out by NEFCO’s environmental unit, the allocation will reduce carbon dioxide emissions by some 86,000 tonnes per year.

NEFCO’s Facility for Energy Saving Credits was established way back in 1997 to grant finance for municipal energy saving projects. However, starting in 2006, NEFCO began to grant soft loans for energy saving measures in municipally owned buildings in Russia. In September, the Ukrainian government signed a new framework agreement with NEFCO, which paves the way for similar projects in Ukraine.

“The demand for these credits has been strong in Ukraine where the high gas prices have compelled municipalities to shop around for cheaper and cleaner alternatives, and we are looking forward to financing the first municipal energy saving projects over there next spring,” says NEFCO’s Senior Manager, Elisabet Paulig-Tönnes.

At present, some EUR 6 million has so far been committed to the energy saving credit facility. Under the terms of the facility, NEFCO may finance up to 90 per cent, or a maximum sum of EUR 260,000 of the investment costs in projects, which receive funds from this credit program. The repayment of the loan is directly tied to the savings of the investment.

In practice, the projects are intended to finance energy saving measures such as upgrading boilers, improving the insulation of windows and doors, as well as installing balanced heating systems with thermostat equipped radiators.

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