The OECD has recently prepared a case study of the European Bank for Reconstruction and Development’s REEP. It is available on the OECD website.
The European Bank for Reconstruction and Development’s Regional Energy Efficiency Programme
Energy efficiency is key to both climate change mitigation and adaptation, and is relevant to all end-users (households, corporates, public utilities, municipalities and governments). The Regional Energy Efficiency Programme (REEP), established in 2013, promotes a sustainable market for energy efficiency in the Western Balkans. It provides an integrated package which includes policy dialogue, technical assistance and financing facilities.
Context and challenge
Energy efficiency is key to both climate change mitigation and adaptation, and is relevant to all end-users (households, corporates, public utilities, municipalities and governments). The Western Balkan region (composed of Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia) faces numerous barriers to energy efficiency – including a lack of efficient regulatory frameworks, high costs of green solutions, and lack of awareness of the benefits of such investments by local stakeholders. At the same time, the region is under pressure to align with the European Union (EU) Green Agenda for the Western Balkans, as its countries are candidates or potential candidates to join the EU. The Regional Energy Efficiency Programme (REEP), which was established in 2013 by the European Bank for Reconstruction and Development (EBRD) with the support of the EU and bilateral donors under the Western Balkans Investment Framework, and in partnership with the Energy Community Secretariat promotes a sustainable market for energy efficiency in the Western Balkans. KfW joined the programme in 2017. Their operations were extended in 2019 mainly to energy efficiency in public budlings area, which is the KfW priority today
Approach
The REEP blends international financial institution financing (from the EBRD and KfW) with EU and bilateral donor grants to provide an integrated package which includes policy dialogue, technical assistance and financing facilities (both directly and through local partner banks). In doing so, it promotes a strong enabling environment while also providing targeted financing which stimulates sustainable growth.
The REEP is built on co-ordination between different actors – including the Energy Community, the EBRD, the European Commission and KfW Banking Group. It includes more than EUR 1 billion of investments from the EBRD and KfW Banking Group, as well as grants from the EU and bilateral donors through the Western Balkans Investment Framework. The REEP includes different dimensions:
- Technical assistance to public authorities: Technical assistance is provided through the EBRD to help municipalities and governments to prepare, tender for and implement energy performance contracts for energy efficient projects.
- Financial assistance for investments in energy efficiency: Individuals, businesses and municipalities wanting to invest in residential sector energy efficiency have access to credit lines. These are intermediated by the EBRD’s Western Balkans Green Economy Financing Facility* and KfW’s Eco Loans projects. At the same time, direct financing is available for renewable energy and energy efficiency improvements in industrial enterprises. Eligible borrows can benefit from direct loans, free technical consultancies and cashback incentive payments (dependant on a reduction in CO2 emissions).
- Finance to public buildings: Direct lending is also available to state entities and municipalities to improve energy efficiency in public buildings (eg. schools, hospitals, student dormitories, government buildings, homes for elderly) and to support the transition from fossil fuels to renewable energy in district heating companies. This is also complemented by technical assistance.
- Policy dialogue support: Support is provided to the broader enabling environment to improve regulatory frameworks and remove barriers to investments in energy efficiency.
Outcome and implications
The Regional Energy Efficiency Programme (REEP) has significantly accelerated the Western Balkans’ transition toward a more sustainable and energy-efficient future. With over EUR 1.1 billion mobilised in investment, the programme has demonstrated the power of co-ordinated public-private financing. These efforts have yielded substantial environmental benefits, including the avoidance of 730 000 tonnes of CO₂ emissions annually, equivalent to removing tens of thousands of cars from the region’s roads. Additionally, 1 220 gigawatt hours of energy is saved per year, contributing directly to increased energy security and reduced dependence on fossil fuels.
On the policy front, the programme has led to the development and implementation of 90 targeted policy deliverables, reinforcing long-term regulatory frameworks for energy efficiency. In terms of direct impact, REEP has supported the refurbishment of more than 90 public buildings, improved energy performance in over 20 000 residential households, and provided support to more than 1 500 SMEs.
The significance of REEP extends beyond its immediate impact on energy efficiency. It catalyses the domestic market for energy efficiency investments by familiarising local partner institutions with higher-quality performance and standards. The REEP illustrates how blended finance approaches have the potential to strengthen and contribute to local financial sector development. It is also a strong example of how different donors and stakeholders can come together, based on their respective comparative advantages and areas of expertise.
* The EBRD’s Western Balkans Green Economy Financing Facility is co-funded by the European Union through the Western Balkans Investment Framework, Austria, Denmark, Japan, and Austria and Switzerland through the High-Impact Partnership on Climate Action (HIPCA)*.
*The EBRD’s HIPCA is supported by Austria, Canada, Finland, Germany, the Netherlands, South Korea, Spain, Switzerland, the Taiwan ICDF, the United Kingdom and the United States.
External link
Energy in Demand - Sustainable Energy - Rod Janssen 
It is always welcome to see how a major financial institution ,with great overt ambition like the EBRD, administers its specific programmes. Where banks are concerned, it is always instructive to “follow the money”.
In this particular instance, it is noteworthy that such a dearth of actual figures has been included. We are told that, since its launch in 2013, this programme has “over EUR 1.1 billion mobilised in investment”.Over such a lengthy period, and covering such a wide geographical area, that sum could be regarded as distinctly modest
But more alarming is the exclusion of any future potential investment forecasts , either in numerical or in timesvale terms. The absence of any such information inevitably undermines confidence in its’ likely future effectiveness. Why such taciturnity?
Thanks for your comments. As for what is excluded, I would have to ask the OECD since they wrote this up as a case study. I will try to contact EBRD to get its reaction.