Szilárd Árvay Ministry of Foreign Affairs of Hungary

Danube Region - Hungary has a central position Key features:  9 EU + 5 non-EU countries;  More than 100 million inhabitants;  One-fifth of EU’s total area;  Significant regional disparities; Source: World Bank Thousand USD 2

Hungary has a decisive role in energy cooperation  The EU Strategy for the Danube Region (EUSDR) is a macro-regional strategy of the European Union, endorsed by the European Council in June  Driving force  the one-size-fits-all approach is not working in an EU of 27 Member States and 271 regions.  The Strategy was jointly developed by the European Commission, the Danube Region countries and stakeholders in order to jointly address common challenges.  The Strategy seeks to create synergies and coordination between existing policies and initiatives taking place across the Danube Region.  The strategy tackles these various topics in a structured way through 4 pillars and 11 priority areas.  Priority Area 2 – Sustainable Energy (PA2) is jointly coordinated by Hungary and the Czech Republic. 3

Energy efficiency is low in a region with significant growth potential MWh/head Source: IEA ktoe/bn USD Energy intensity (energy consumed compared to GDP produced) is still considerably higher in the Eastern part of the Danube Region than in Western Europe  still much room for improvement. 4

PA2 to provide backing to achieve EU-targets  Europe 2020 Strategy  saving 20% (368 Mtoe) of the Union’s primary energy consumption by 2020 compared to projections made in  Recent EU data shows that the continent is not on track to reach its 2020 energy efficiency goals  Recent estimate of COM: primary energy consumption in 2020 will be reduced by only about 17%.  EU Energy Efficiency Directive  the European Commission shall assess progress achieved by 30 June 2014 AND Member States shall establish a long- term strategy for the renovation of buildings, first version to be published by 30 April  Priority Area 2 intends to provide a useful input to such analyses. 1528Mtoe  17% saving 5

Importance of public buildings  The cost-effective energy savings potential in the building sector (residential and non-residential) in the EU is estimated to be 65 Mtoe, with a gross investment need of approximately EUR 587 billion for the period  The total budget of the EU for the period is EUR 960 billion in commitments and EUR billion in payments.  Buildings represent 40% of the EU final energy consumption (and 36% of greenhouse gas emissions) 2, while publicly owned or occupied buildings represent about 12% 3 by area of the EU building stock and have a high visibility in public life.  Public spending accounts for 19% 4 of EU GDP, therefore it is an important driver to market transformation towards more efficient products, buildings and services as well as to trigger behavioural changes in energy consumption.  Public bodies fulfil an exemplary role regarding energy efficiency, furthermore, decreasing consumption could free up public resources for other purposes. City Hall, Hódmezővásárhely 6 1,2 - DG-Energy - Financial Support for Energy Efficiency in Buildings, Consultation Paper 3 – EPEC - Guidance on Energy Efficiency in Public Buildings 4 - EU Energy Efficiency Directive

DRS PA2 is bringing knowledge to Hungary  Energy Performance Contracting in the Danube Region (EPCDR) ◦ The State Office Baden-Württemberg, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and Steinbeis-Europa-Zentrum have initiated a concept on the ESCO-financing of energy efficiency projects and contacted DRS PA2 in December 2012 to cooperate in the region. ◦ PA2 involved Hungarian partner ÉMI and invited several other institutions from the Danube Region to participate. ◦ The consortium submitted its application to the Intelligent Energy Europe (IEE) programme in May 2013, final decisions on IEE proposals may be expected at the end of  ESCO – knowledge transfer from Germany to Hungary ◦ Hosted by the Government of Baden-Württemberg in Stuttgart, at July 4-5, ◦ Delegation of the Ministry of National Development, ÉMI Non-profit LLC, Hungarian National Asset Management INC., Hungarian Development Bank PLC., MFB Invest PLC., Budapest Danube Contact Point and PA2.  DRS PA2 own initiative on energy-efficiency ◦ Recent EU data shows that the continent is not on track to reach its 2020 energy efficiency goals. ◦ Main barriers to initiating energy efficiency projects in buildings are of market, financial or regulatory in nature. ◦ Latest consultation of the EU regarding energy efficiency in buildings (February 2012) resulted in a lack of feedback from the new member states. ◦ The concept intends to analyse and eliminate obstacles to bank financing in the region. ◦ Concept was unanimously accepted by the Steering Group of PA2 in June

Danube Transnational Progamme established  Legislative package for the next EU multiannual financial framework for 2014– 2020 established a new transnational program for the Danube region – the Danube Transnational Programme.  This will cover the same regions as the EU Strategy for the Danube Region (EUSDR), while the existing South East Europe Programme will be terminated.  The exact structure is currently under preparation - the consultation process to determine the objectives of the new program is underway.  The total budget for will be approximately EUR 180 million.  The Programme will provide Technical Assistance type of funding to transnational cooperation projects with budgets of about EUR 1 million. EU transnational programmes under the European Territorial Cooperation Objective in

BDCP - smart tool for facilitating DRS projects  Budapest Danube Contact Point – an innovative initiative of the European Investment Bank (EIB) and Hungary to support feasible and financeable projects for the Region.  Starting off: June  Support for the Danube Strategy on the project level: ◦ free advisory services; ◦ „reality check” for projects; ◦ aiming to improve quality and speed up preparation; ◦ team of international experts.  How to structure? - supporting selected transnational projects with high added value;  How to fund? - helping to assign optimal financing structure;  How to create macro-regional added value? - promoting and supporting macro-regional concepts such as strategic feasibility studies. Organization 9

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