The Inter-American Development Bank today approved a $25 million guarantee program to support energy saving projects in privately owned buildings in Brazil.
The $25 million for <?xml:namespace prefix = st2 />Brazil's "Energy Efficiency Guarantee Mechanism (EEGM)" include $15 million from the Bank's capital and a $10 million grant from the Global Environment Facility (GEF). The EEGM will be deployed in parallel with technical assistance activities by the United Nations Development Program.
The guarantee program will provide various types of local currency credit guarantees to help commercial banks and other lenders or investors finance energy saving projects for buildings promoted by Brazilian energy service companies (ESCOs). These projects typically include replacing inefficient lighting systems, air conditioning, chillers, motors and pumps with more efficient models or technology, and installing or improving control systems that optimize energy consumption.
The EEGM is dimensioned to support over 200 projects developed by up to 40 Brazilian ESCOs over a period of five years, with a total project energy savings in excess of $100 million.
The mechanism is a fully independent facility designed to complement PROESCO, a specialized program of Brazil’s national development bank BNDES that finances energy efficiency investments.
EEGM end-users are expected to be mainly private-sector companies or institutions that own buildings in need of retrofitting to become more energy efficient.
The facility will be implemented with the involvement of a third party administrator, to be selected through a competitive bidding process and which is expected to be a bank, a firm, or individuals with expertise both in energy efficiency projects and financing.