Serbia, Bosnia and Herzegovina and FYR Macedonia have developed vibrant economies in recent years, but the communist-era legacy has left its mark. Due to dilapidated infrastructures, inefficient energy use and high losses in energy transmission and distribution, countries in the Western Balkans are still up to 2.5 times more energy intense than the EU average.
Through its Western Balkans Sustainable Energy Financing Facility (WeBSEFF), the EBRD is actively working on narrowing this gap. WeBSEFF provides credit lines totalling €60 million to local partner banks, which they lend on to local businesses.
Plum stones as energy source
Ivan Stojakovic’s company Wood Master is one of 59 Balkan businesses that have already discovered the benefits of energy savings, thanks to WeBSEFF.
With the help of a €150,000 loan from one of the EBRD’s partner banks, Mr Stojakovic has restored a run-down building surrounded by orchards and forests, insulated the walls, roof and cooling chambers and turned it into a plum jam factory.
The fruit delicacy he produces is known as “pekmez” in many parts of south-eastern Europe and its popularity has spread to other parts of the continent. Once the plums are processed and the product packed, Wood Master’s plum jam is exported to Germany where companies add sugar to turn it into “Pflaumenmus”, a breakfast favourite for both the young and old.
Plum stones are a by-product of the jam-making process and usually get discarded, but not by Mr Stojakovic. Instead, he has invested part of his loan in a new boiler system which uses them as fuel.
“Our boilers use plum stones and wood pellets to produce steam to cook our plum pekmez and to heat our offices,” he says. “This way, we save energy and money and it’s good for the environment.”
Despite substantial energy cost savings totalling approximately €140,000 each year, Mr Stojakovic’s motivation for the investment was not merely financial. He also wanted to build a green and sustainable factory that would not harm the unique natural beauty surrounding his premises. By doing so, he wanted to prepare Wood Master for the future and leave a legacy to his children, he adds.
Modernising companies, reducing CO2 emissions
The EBRD’s WeBSEFF initiative has so far mainly supported small and medium-sized enterprises, but also extends to larger firms across a range of sectors, from food-processing and metal production to electricity supply.
“Companies used their loans to cut energy costs, save money and modernise their facilities,” says WeBSEFF consultant Gordana Vujanovic. “Furthermore, the investments reduce the industry’s impact on the environment. On average, the firms reduce their CO2 emissions by 20 per cent.”
Ms Vujanovic and her colleagues help businesses identify energy savings and related investment opportunities. Her services come at no cost to the companies or the EBRD’s local partner banks, as they are entirely funded by the multi-donor Western Balkans Fund. The EU further supports WeBSEFF by providing funds for incentive payments to the borrowing companies.
Opportunities to cut energy costs are many in the Western Balkans, but entrepreneurs and bankers are often still unaware of them.
“Through our WeBSEFF projects, the EBRD helps raise awareness among companies and commercial banks to tap into the vast potential and benefits of energy efficiency investments,” says Daniela Diedrich-Ristic, an analyst in the Bank’s Energy Efficiency team.
“This way, the EBRD supports long-lasting economic and environmental change in the Western Balkans.”
This represents not only a very positive development for Mr Stojakovic’s small business, but also for the farmers surrounding Wood Master, who can sell more plums and share the benefits of the company’s success.
WeBSEFF is one of 16 Sustainable Financing Facilities (SEFF) that the EBRD has successfully launched in Armenia, Bulgaria, Georgia, Hungary, Kazakhstan, Moldova, Romania, Russia, the Slovak Republic, Turkey, Ukraine and the Western Balkans.