Banks support CEE climate emissions cuts

First private sector investment fund launched for Eastern Europe greenhouse gas reduction projects

The European Bank for Reconstruction and Development (EBRD) and Dexia International today launched what they described as a "groundbreaking" private finance initiative designed to reduce greenhouse gas emissions in central and eastern European (CEE) countries. Up to euros 150m should be invested in projects over the next ten years, the two banks said.

Under the scheme, investors in projects should be able to earn carbon "credits," which the EBRD believes could be both "viable and profitable" if approved under UN Kyoto climate protocol rules to be decided this autumn.

"The energy intensities of CEE countries are two to five times that of Organisation for Economic Cooperation and Development countries, [so] relatively small investments can yield attractive returns," EBRD first vice-president Charles Frank told reporters. The target of euros 150m is considered by the banks as a "medium-sized" investment for CEE projects.

The two banks claim that theirs is the "first completely private sector approach" to energy efficiency in the CEE region, where most current investment in the energy sector is from governments. The fund has so far amassed euros 61m for projects in public transport and lighting, district heating and industry. The first deal is due to be struck within the next three to four months.

Follow Up:
EBRD, tel: +44 20 73 38 60 00; Dexia International, tel: +33 1 43 92 71 71.

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