Aleksandar Durkovic Project Director SERBIA ENERGY EFFICIENCY PROJECT SEEP EXPERIENCES OF ENERGY EFFICIENCY PROJECT IN SERBIA November, 2011

Schools, Hospitals & Social Care Institutions

Spread Across Serbia 1 st Phase – Original Financing IDA Credit 3870 YF – 21 mil. USD Contributions of Serbia – 4 mil. USD Total facility: 25 mil. USD In total 28 buildings for 10 mil. USD + CC Belgrade energy system rehabilitation for 15 mil. USD 2 nd Phase - Additional Financing IDA Credit YF – 10 mil. USD IBRD Loan 7466 YF – 18 mil. USD Contribution of Serbia – 2 mil. USD Total facility: 30 mil. USD In total 86 buildings for 23 mil. USD+ CC Nis new energy system erection for 7 mil. USD

Implementation Body: Serbian Energy Efficiency Agency Stakeholders’ Structure Funding: WORLD BANK Beneficiary: Government of Serbia Credits & Loans Coordination: Ministry for Infrastructure and Energy Investors and Nominees: Ministry of Health Ministry of Education and Science Ministry of Labor and Social Policy

Savings Objectives Audits Inputs - Financing Implementation Nominations Defining the Project Objectives and Implementation SEEP Outputs & Outcomes Objectives: Making heating more affordable by energy savings = cost reduction Improvement of the functional health environment for the users Reduce the local and global environmental impact of the use of dirty fuels for heating buildings in Serbia 2 nd Phase Implementation Component A: Clinical Center of Nis in Nis – 7 mil. USD  Energy supply (30 MW) and distribution (2 km + 20 substations) system erection  19 Buildings inside CCN complex - Energy Efficiency rehabilitation Component B: 17 hospitals+40 schools+10 social care institutions throughout Serbia – 23 mil. USD  Energy Efficiency retrofit 1 st Phase Implementation Component A: Clinical Center of Serbia in Belgrade – 15 mil. USD  Gas fired boiler house – 50 MW  New heat substations – 55 units  New distribution network – 3.5 km  CHP plant construction – 4 MW Component B: 12 Hospitals + 16 Schools throughout Serbia – 10 mil. USD Energy Efficiency retrofit

Objectives Achieved Technical Environment Social Impact Energy savings in average of 40% Indoor comfort improved % Satisfaction raised significantly Awareness raised CO2 reduction in average of 42% Elimination of ash, soot and SO2 Nitrogen oxides reduced

Benefits Line Ministries proved as reliable decision maker Department focused and touch points to other immediate impact areas Technical & Financial Healthcare, learning and working conditions improved Environmental concern Corporate and Institutional Responsibility Technical & Financial Healthcare, learning and working conditions improved

Process of Implementation

Structure of EE measures

Simple Payback Period - SPP

SPP - Whole Project

Towards Serbian National Energy Benchmarks

Hospital in the Town of Knjazevac

Hospital in Knjazevac – Overview

Benefit Sharing Scheme

The Role of Benefit Sharing Scheme Stimulates the rational behavior Grants the retain of portion of savings by end users Incentive for even more savings Show Case – Best practice Example Impact to other stakeholders within local self government

ROLL FORWARD MODEL (RE-INVESTMENT) Outcome: The SAVING in energy costs (OPEX – savings in operational expenditures) is used to PAY BACK the CAPITAL INVESTMENT EXPENDITURES (Input = C – capex) of the PROJECT over a five to ten year period, or Reinvested into the new building to allow for further energy SAVINGS

Good Practice Example Local Self Government of Town of Vrsac 1.Elementary School “Branko Radicevic” – village Uljma 2.Secondary Agricultural and Technology School in Vrsac

Re - Investment The portion of savings, acquired by LSG is used in two possible ways: 1.Implementing, i.e. financing own EE projects, or 2.Contracting the EE Services.

Influence on other Investors and Institutions Acceptation of standards re thermal properties of windows from 2.3 to 1.7 and now to 1.3 W/m²K Acceptation of standards re thickness of wall thermal insulation from 5 to 10 cm, and for roofs from 10 to 20cm Inclusion of the most of the EE measures in the green field building practice as well as renovations in Serbia Measurement of energy consumption and monitoring of savings in time re benchmarks Methodology for defining the most effective EE packages Simple software for assessment of the measures and monitoring of results re benchmarks Driving other Bank’s EE investment in existing building stock renovation (KfW loan for about EUR 10 million for schools energy retrofit and JICA for about EUR 8 million for schools and hospitals) Awaiting for P4R: new WB’s lending instrument – disbursement against results (possible help to establish revolving EE fund) Driving PPP and ESCO schemes in EE services in Serbia

Republic of Serbia Ministry of Infrastructure and Energy & Energy Efficiency Agency Aleksandar Durkovic Project Director & Building Expert