Description: 

TurREEFF will finance energy efficiency (EE) upgrade and improvements in private residential properties. Appropriate measures will be applied to complex EE upgrade, thermal protection of residential buildings and mechanical and electrical services efficiency.

Background:

EE in buildings is relatively new in Turkey, and is crucial because the demand to reduce households’ energy costs has doubled over the last decade. Around one third of the energy consumed in Turkey is used for heating and cooling. More than 80 percent of the buildings in Turkey lack sufficient heat insulation, still have single glazing windows and use solid fuels for primary heating, while more than 80 percent of the housing stock is connected to the natural gas network. Turkey is well endowed with renewable energy resources, particularly solar. Environmental and geothermal heat could be used to cover heat/cooling of buildings. However, only a small fraction of the RES heating potential is used.

The market potential for residential housing EE is high. One third of Turkey households is in colder regions, and 20 percent of these households are privately owned by creditworthy clients of TuREFF PFIs. If 30 percent of them take up TuREFF funding, this would result in 360,000 households as potential sub-borrowers/sub-projects.

Objectives and Outputs:

The Program will achieve substantial CO2 emission reductions at a relatively low investment cost of about 1.45kWh annual energy savings per invested USD over the more than 20-year lifetime of technologies. Annual energy savings at current interest rates account for 0.056 USD per kWh saved, which is half the current electricity tariffs and higher than average households tariffs for gas and heat. This means saving energy is already economically attractive for people using mostly electricity for heating, air-conditioning and domestic hot water. The Program brings high financial sustainability with co-benefits, such as higher comfort through better hygiene, and a healthier residential environment. The energy savings and emissions reduction potentials of the pilot phase are substantial: annual energy savings potential of 0.5TWh representing 0.2 percent of the primary energy consumption of the residential sector of 249TWh, and annual CO2 emission reduction up to 200k tons, representing 0.1 percent of Turkey’s CO2 emission volume.

Taking the example of a $10,000 EE investment package, energy savings of 60 percent can be realistically reached, leading to a payback time of 8-10 years. The project will demonstrate effective financing mechanisms for residential EE projects through dedicated credit lines. TurREEFF will combine financing, technical assistance and regulatory support to effectively address the complex market barriers.

Regulatory framework on EE in buildings and housing legislation will be strengthened. Additionally, TurREEFF will support new market players, such as bankable housing associations and private housing management companies, through technical and legal assistance on housing regulations, management structure and apartment building refurbishment. Moreover, these banks will have institutional capacity to successfully mainstream residential EE financing and coordinate the program with the National Urban Transformation Initiative, launched by the Government of Turkey. Employment and private sector involvement through local production and installation services will increase.

This project summary is drawn from draft project proposals [such as the PAD, PID, SAR, and country investment plan] and may not contain the most up-to-date information.

EBRD Project Portal


Video:
Turkey: EBRD donors support energy efficiency (EBRD, June 3, 2013)

Project Details
Cover NoteProject DocumentExternal Review | Release of Second Tranche | Proposed Decision
Approved on May 20, 2013 (Approved Decision)
Approved amount(s):
USD 36.79 million (concessional loan)
USD 2.0 million (grant funding)
USD 205,242 (MPIS)

Comments and Responses:
Germany (May 17, 2013)