At the international workshop on ESCO model held today, Assistant Minister for Projects Coordination and Development with the Ministry of Physical Planning, Civil Engineering and Ecology of Republic of Srpska, Miloš Jokić, pointed out that Republic of Srpska has good legal grounds for enhancing energy efficiency in public sector facilities, that is, for implementation of ESCO model. He reminded that Srpska adopted Physical Planning and Construction Act and Energy Efficiency Act and that the Public-Private Partnership Act has already been applied, and these will be fundamental for ESCO model application.
Mr Jokić explained that ESCO model means cooperation between public and private sectors in the area of energy efficiency enhancement, where private partners would invest their own, that is, borrowed funds, into retrofitting of public facilities where appropriate savings of money and energy would be generated.
“Repayment of investments will be funded from these savings. ESCO model has multiple benefits for both, the public and private sectors, because we gain retrofitting of facilities, reduce energy consumption and initiate investments through use of the funds that we are currently needlessly spending for energy.”, Mr Jokić explained and added that the savings can be achieved even up to 50%.
He pointed out that no increase of the public debt is this model’s key benefit, because public partners only guarantee that they will forward a share of achieved savings, after the investment has been made, to a private partner until completion of the investment repayment.
Energy Efficiency expert with the Energy Community Secretariat, Borko Raičević, confirmed that the legislation in this area in Srpska was new and that it has been aligned with the EU directives and that there could possibly be some minor amendments of certain legal documentation.
He added that Srpska could benefit significantly from implementation of this model, primarily when dealing with legislation reform, then institutional strengthening and subsequently through specific investments. Mr Raičević stated that the project was of a regional nature, that the Secretariat followed and coordinated the Project on regional level and it has been applying successful results from one country into another.
Representative of European Bank for Reconstruction and Development in BiH, Josip Polić, said that EBRD supported this model for two reasons, and the first one being general increase of efficiency in public sector in the state owned facilities as well as within some utility services such as public lighting.
“The second reason is that efforts should be made for its funding without indebting the public sector, through credit financing of private companies who will be making the investments and the credits are to be repaid based on achieved savings”, Mr Polić stated.
The consultant, Faruk Serdarević, said that it would be useful to establish a guarantee fund in order to enable the ESCO model market to grow faster, that is, there should be a fund from which private partners would be able to claim payment of their receivables in an event of inability to collect receivables.
As an example, he mentioned Bulgaria where development banks have entered around EUR 15 million into the fund, and no one has withdrawn any funds from it as yet because operation of such market was not brought into question.
The Workshop on “Implementation of ESCO model in public sector” was organised by the Ministry of Physical Planning, Civil Engineering and Ecology of Republic of Srpska in cooperation with EBRD and the participants to the Workshop were representatives of the Energy Community, the World Bank, UNDP in BiH, banks, entrepreneurs and representatives of public services.