Energy Efficiency Project In Georgia

Maka Ghaniashvili

Experts of the United Nations forecast that global starvation is anticipated in whole world by 2050.

One of main reasons of this is the world’s increasing population and global warming that causes reduction of foodstuffs. Due to global recession, governments were paying less attention to these issues. However, importance of increasing alternate energy sources and reducing consumption of energy carriers is a fact. Together with ecological safety, search of alternate energy sources and energy saving projects have become issues of geopolitical importance in XXI century.
Energy security issues have become especially topical for the West after Russian-Georgian war. Russia’s imperialistic expectancies and aspirations of taking energy dominant role became more obvious after August war events. Thus, Europe was induced to think of alternate energy sources. One of the main problems in Europe is increased electricity consumption and thus energy deficit dangers.
On Dec-13-2009, the EU published the document that must ensure energy security of the continent. In case of implementing the new project, the EU will be able to transfer gas to Europe bypassing Russia. This plan should be accomplished within the framework of the Europe’s energy security strengthening program that is aimed to decrease dependence of the EU countries on Russian gas. New project of the EU is dealing with the pipeline networks and implies unification of all the networks around Europe. Besides this, European Union has already adopted the decree that implies reduction of gas consumption in the EU countries by 20% in 2020. This might be alternate solution for Europe. Maybe they should think of reducing consumption of gas and search for alternate sources of energy, as the dependence on natural gas means dependence on Russia.
United States of America is facing similar problems. Social survey conducted after the elections showed that current president of the USA Barack Obama excelled this opponent with the economic program. The experts are of the same opinion. One of the key issues of Obama’s economic program was reduction of dependence on foreign oil that creates additional problems for the country’s economy. In his election campaign Obama was declaring that he is not rejecting utilization of atomic fuel and at the same time, he was pinning hopes on alternate energy sources either.
What are the alternate energy sources and how they might become solution of dilemma for the West? As it is well-known, there are two types of energy sources – non-renewable (coal, oil, natural gas and atomic energy) and renewable (sun, wind, water, geothermic and vegetable).
Non-renewable energy resources have become the main matter of dispute around the world. Therefore, big importance is given to saving of non-renewable energy and wide utilization of its alternative – renewable energy sources. 18% of the energy consumed in whole world was derived from renewable energy sources in 2006. Governments and experts of developed countries are aspiring to increase this showing even more. The EU leaders signed the agreement in Mar-2007 that implies achieving the increase of consumption of renewable energy resources’ in the EU countries up to 20% in 2020.
Energy efficiency project has been designed in Georgia in Dec-2007. Project is aimed to reduce energy intensiveness and develop the consumption of renewable energy sources. Project will help households to reduce energy losses by using existing technologies. This encourages to make profitable investment and replace low quality equipment with high quality effective devices. The head of Energy Efficiency Program of Georgia (GEEP), Helen Raiding declared: “Use of effective technologies is a profitable investment, as under the conditions of stable growth of prices on energy consumption, this is the best way to reduce expenditures that enables to receive high quality and warmth at home with less expenses”.
Price increase of energy resources is directly influencing production cost of business in Georgia and makes it uncompetitive in the global economy. The share of consumed energy in Gross Domestic Product of Georgia three times exceeds the same showing of average country in Europe. In case of using modern and energy efficient technologies, Georgian enterprises might decrease energy consumption by 20% or even more and thus aggregate saving of business in Georgia would amount €12 million. Energy loss is topical for domestic economies and make up 42% of total energy consumption in the country.
In order to solve the above-mentioned problem, European Bank for Reconstruction and Development (EBRD) has launched energy efficiency program in the country that implies financing of energy efficiency and renewable energy projects. Within the framework of the program, EBRD assigned line of credit for Georgian population in amount of $35 million that is aimed to help Georgian population to invest in energy efficient devices and gain maximum profit, save funds and energy. TBC Bank, Kartu Bank and Bank Republic already started to issue such loans. Work scheme of the project is simple – local banks are taking credit from EBRD and then issuing loans to the clients. After receiving some project from the client, bank decides whether to issue a loan or not.
“Investing in energy efficiency is the main factor determining business economic competitiveness. However, benefits derived from energy saving in families are often left without attention. From this point of view, initiative of BP and its partner companies in oil and gas sector is of special importance. The initiative will encourage accomplishment of the mentioned program in Georgia. We started similar program in Bulgaria four years ago. 28 thousand small-scaled energy efficiency projects have been already implemented in the country. 200 thousand MWh has been saved in a year that equals to the energy necessary for a passenger car driver to pass 300 million kilometers. This approximately is the distance from Sofia to the sun and back” – Declared Jan Smith, representative of EBRD Group in London.
BP and its partner business companies will assign additional grant in amount of $1 million. The scheme of backing improves loan availability and enables population to regain 15% of the purchased cost of energy efficient products and devices. Energy efficiency program initiated by BP and is partners became operative in April. The program consists of two main components. These are, backing scheme and energy bus that provides population of Georgia with the information about energy efficiency. Aim of the program is to improve awareness of the population in energy efficiency sector and encourage it to purchase energy efficient products and devices.
General manager of BP in Georgia, Mr. Nil Dan declared: “This innovative project is a good example of cooperation between private sector, international organizations, local energy experts and banks. This project is the part of the work done both in Georgia and abroad in energy efficiency sector”.
Within the framework of the energy efficiency program, loans will be issued both to physical bodies and SMEs (small and medium sized enterprises). While only physical bodies will be able to enjoy advantage of 15% subsidy. They will be able to purchase energy efficient appliances by means of energy credit.
TBC Bank was the first bank in Georgia that started to issue energy efficiency loans to physical bodies. From October of this year, TBC Bank offers a new product to the consumers – energy credits. Energy credit is a loan that helps Georgian consumers to purchase devices of renewable energy such as: double-glazing windows, thermo-insulation, boilers, systems of central heating. Thus the population manages to maintain warmth at home with less expenses. Main advantage of the product is that 15% of the value of the purchased device is returned to the debtor immediately.
TBC Bank is issuing loans within the framework of Energy Efficiency Program since 2007Y. However, such loans were available only for corporate clients. We are glad that TBC Bank is implementing such innovation at Georgian banking sector and now physical bodies will be financed with energy credits. These loans will help the population to get desirable comfort and at the same time save expenditures” – declared Director of SME department of the bank, Nino Maisurashvili.
Energy credits can be either mortgage of consumer type. Products that might be purchased with such credit are – double-glazing windows, thermo-insulation of walls, roofs and floors, boilers and central heating systems, thermal systems of the sun for hot water and central heating, high-efficiency biomass ovens for family households.
It might be said that energy security and climate changes are the biggest challenges that world might face in XXI century. Constant discussions are held around these issues over the last few years. However, the time of actions has come and this is proved by the short list of programs discussed above.