Energy Efficiency Opportunities for Manufacturing Industries Central American Bank for Economic Integration (CABEI)

Central American Bank for Economic Integration (CABEI) Multilateral development bank focused on the Central American Region. Founded in 1960. Members: 13 Headquarters in Tegucigalpa, Honduras.

Strategic Focus Our Clients As part of its Institutional Strategy 2015-2019, CABEI defined 6 areas of focus to contribute to the development of the Central American region. Human Development and Social infrastructure Governments Financial sector Private sector Our Clients Productive Infrastructure Energy Rural Development and Environment Financial Intermediation and Development Finance Competiveness Services

Green MSMEs Initiative SME Program – Energy Efficiency SME Program – Renewable Energy The Green SMEs Initiative´s purpose is to contribute to the environmental and climate protection through the Micro, Small and Medium Enterprises in Central American region.

FI FI FI MSME/Small renewable energy projects developers General Scheme of the Green MSME Initiative 30 million Euros (reimbursable funds) 3 million Euros (reimbursable funds) 3 millions de Euros (non-reimbursable funds) CABEI –Implementation Agency FI FI FI MSME/Small renewable energy projects developers

Characteristics of the Green MSMEs Initiative FOCUS BENEFICIARIES CARACTERISTICS ACHIEVEMENTS Energy Efficiency Loans for MSMEs to adopt new technologies or energy efficiency projects MSMEs up to 100 employees. Loans up to 10 years. Energy savings has to be equal or greater than 15% of the energy cost. US$22 Millions financed in 49 energy efficiency projects Energy savings of 215,608 kWh TA: 72 energy audits for MSMEs Renewable Energy Loans for MSMEs or/and small renewable energy Project developers Loans up to US$ 5 millions per project. Loans up to 10 years Installed capacity of energy generation up to 5 MW. US$30 Millions financed in 20 renewable energy investments Energy generation of 25 MW TA: 27 renewable energy project studies

What kind of risks and barriers has the financing of EE in the industrial sector? The limited experience of financial institutions in energy efficiency projects. The lack of financial mechanisms that reduce the risk of energy efficiency projects in the industrial sector. Investments in energy efficiency projects are not a priority of the industries. The prices of efficient equipment are higher than the prices of conventional inefficient equipment.

What kind of public finance mechanisms are needed to support EE in the industrial sector? Promote tax incentives for importation of efficient equipment. Establishment of investment funds with non-reimbursable contributions. Establishment of guarantee schemes to reduce the risks in energy efficiency investments. Promotion and development of mechanisms intended to simplify the procedures related to importation of efficient equipment.

What are the main challenges to implement an Energy Performance Contract (EPC) and position ESCOs to provide EE services to the industry sector? Improve the reliability on ESCOs to provide energy efficiency services/projects. The financing structuring of investments to include industries and ESCOs. Establish financial products for ESCOs that reduce the risk of their energy efficiency projects.

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