Regional Policy Dialogue Meeting “SMEs in a Green Economy”, 09 March 2018, Paris
Session 3, "Croatia’s experience in improving access to finance for green SMEs", Dubravko Ponoš, Director, ENERGY EFFICIENCY AND ENVIRONMENTAL PROTECTION FUND
Croatia
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Croatia’s experience in improving access to finance for green SMEs
1. Croatia’s experience in improving
access to finance for green SMEs
Dubravko Ponoš, director
ENERGY EFFICIENCY AND
ENVIRONMENTAL PROTECTION FUND
Croatia
2. The role of Environmental Protection and Energy
Efficiency Fund in Croatia
• Extra-budgetary public institution
• Collecting fees based on the 'polluter pays principle‘ (environmental charges,
revenues from ETS, EU funds)
• Financing the preparation, implementation and development of projects in the
field of preservation, sustainable use, protection and improvement of the
environment, as well as energy efficiency and the use of renewable energy sources
• Organising and supporting the systematic waste management system in Croatia
• 15 years of experience in financing more than 35,000 projects!
ENERGY EFFICIENCY AND
ENVIRONMENTAL PROTECTION FUND
Croatia
2
3. The Fund’s approach
ENERGY EFFICIENCY AND
ENVIRONMENTAL PROTECTION FUND
Croatia
Results
Visibility & communication
towards target groups
Simple & clear application
procedures
Continuous support &
monitoring of the
implementation of the
project
• Local and regional
government
• Central government
• SMEs
• Large enterprises
• Citizens
3
4. 1. Energy renovation
of commercial
buildings
2. Energy
efficiency in the
industry
3. Renewables 4. Energy and
environmental
management
5. E-mobility
PROGRAMMES FOR
SMEs
4
• Solar thermal and
photovoltaic systems
• Biomass fired boilers
• Production of solid
biomass
• Heat pumps
ISO 14001, ISO 50001,
energy audits…
5. 1. Energy renovation of non-residential buildings
ENERGY EFFICIENCY AND
ENVIRONMENTAL PROTECTION FUND
Croatia
Renovation includes:
Thermal insulation of building envelope
Energy efficient Windows and doors
Space heating and domestic hot water preparation
Ventilation and air-conditioning
Control and automatization of HVAC systems
Indoor lighting
In the past 4 years, the Fund approved 21.5 M€ for 280 projects
EU funding - OPCC specific objective 4b2
5
6. 2. Energy efficiency in industry
ENERGY EFFICIENCY AND
ENVIRONMENTAL PROTECTION FUND
Croatia
EE projects in industry (production plants) which reduce
energy consumption by at least 20 %
Improving the efficiency of using heat energy or/and cooling systems, electric
motors, renovation of infrastructure (lighting, process water, etc.), replacement
of the primary energy source, introducing/improving automatization, power
systems (reactive power compensation)
In the past 4 years, the Fund approved 2.5 M€ for 50 projects
EU funding - OPCC specific objective 4b1 – ONLY FOR THE
MANUFACTURING INDUSTRY
(Not included: food, beverage and tobacco industry)
Future activities
6
7. 3. Renewable energy systems
Financing of renewable energy systems:
Solar thermal and photovoltaic systems
Biomass fired boilers
Production of solid biomass; facilities for the production of wood
pellets and brickets
Heat pumps
In the past 3 years, the Fund approved financing for 135
projects – subsidies in the amount of 7.7 M€, including
the programme for RES in tourism
EU funding - OPCC specific objective 4b2
Future activities
7
8. 4. Energy and environmental management
ENERGY EFFICIENCY AND
ENVIRONMENTAL PROTECTION FUND
Croatia
The implementation of an effective environmental management system
(EMS) ISO 14001 (30,000€ -10 companies)
Energy audits and introduction of the energy management system ISO
50001 (200,000€ -65 companies)
Education, research and development projects
Supporting the implementation of the national climate/energy policy
Future activities
8
9. Eco-driving training (8 to 18 % savings)
Electric and hybrid vehicles:
2 M€ in 2 years for 370 vehicles: 160 electric + 15 PHEV + 195
hybrid
Other measures: conversion to CNG or electric, charging
stations, electric bicycles, optimising distribution routes…
1.4 M€ in 2 years
Continuing with the programmes in 2018, based on the
4th National Energy Efficiency Action Plan
5. E-mobility
ENERGY EFFICIENCY AND
ENVIRONMENTAL PROTECTION FUND
Croatia
9
10. Our programmes encourage not only SMEs to ‘’green’’ their
business, but also encourage the entire economy to follow it!
ENERGY EFFICIENCY AND
ENVIRONMENTAL PROTECTION FUND
Croatia
1 € grant 2.1 € of investments
For example:
In 2015, the Fund approved:
127 million €
These projects generated the
investments worth
264 million €
10
Hello to everyone present.
My name is Dubravko Ponoš, and I am the director of the Croatian Energy Efficiency and Environmental Protection Fund.
First of all, let me just start by saying that I am happy to be joining this dialogue today, and am proud to present the Fund, one of the key institutions for greening Croatia in every way possible.
The Croatian Fund was established at the end of 2003.
It is an extra-budgetary institution which collects revenues from the fees paid by “polluters” and from emission allowances trading.
We finance projects and activities in three basic areas: environmental protection, energy efficiency, and the use of renewable energy sources.
We are also in charge of organising and supporting the waste management system in Croatia.
I can proudly say that the Fund has financed more than 35 thousand projects so far, but I believe there are many more to come.
When I was invited to join this event today, I was told to give a comment about the barriers in implementing such projects, specially when it comes to small businesses.
I am pretty sure most of the companies would point out that one of the greatest barriers is the bureaucracy.
The Fund differs from other institutions in our approach.
I can say that we do try to keep the procedures simple and clear and give our best to be a reliable partner to the projects we are financing.
As you can see, we have a few target groups: Local and regional government, Central government, small and medium enterprises as well as the large ones, and of course - the citizens. All of these groups have
specific needs, which we try to identify and address through many activities the Fund does.
And such approach brought us the results I’m about to show you.
When it comes to SMEs, the Fund had various programmes through which we tried to encourage the companies to be “more green”.
It’s often said that small and medium enterprises are the backbone of every economy. In Croatia, more than 99% of companies fall into that category.
We tried to reinforce that backbone and through our programmes we financed energy renovation projects, energy efficiency measures in industry, renewables, energy and environmental management and e-mobility.
__________________________________________________________________________________
Staff headcount and financial ceilings determining enterprise categories
The category of micro, small and medium-sized enterprises (SMEs) is made up of enterprises which employ fewer than 250 people and whose annual turnover does not exceed 50 million euros, and/or an annual balance sheet total does not exceed 43 million euros.
a small enterprise is defined as an enterprise which employs fewer than 50 persons and whose annual turnover and/or annual balance sheet total does not exceed EUR 10 million
a microenterprise is defined as an enterprise which employs fewer than 10 persons and 44 Companion Note for the MSME Country Indicators whose annual turnover and/or annual balance sheet total does not exceed EUR 2 million.
Renovation of non-residential buildings is an important programme, one of many that deals with energy renovation in Croatia.
More that 75 % of buildings don’t meet the current technical requirements for thermal insulation, and thus they waste a lot of energy. 48 % of energy is used for heating.
So, the Government’s goal was to reduce energy use in all types of buildings, including non-residential ones. Those types of projects can ensure a reduction in energy use, as well as lower utility bills, which improves the company’s balance and competitiveness, as well as working conditions for the employees.
We’ve financed more than 280 such projects so far, with 21.5 million euros. After our programmes, Croatia is just about to use EU funding for such projects, through operational programmes.
________________________________________________________________________
OPCC - Operational Programme Competitiveness and Cohesion 2014
specific objective 4b2 - Increasing EE and use of RES in the private service sector (tourism and trade)
--- 25 M€ grants, 15M€ financial instruments
To compare:
PAST – national financing
in the past 4 years, the Fund approved 26 M€ for 430 projects of energy renovation of multi-apartment buildings and 5.6 M€ for about 70 projects of energy renovation of public buildings.
FUTURE - EU funding
Also, last year was the first time those types of projects were successfully applied for EU funding.
There are currently 584 contracts for financing energy renovation of multi-apartment buildings and 231, more are to be approved, for energy renovation of public buildings.
For these project, EU funding amounts to about 1,3 million euros.
This only shows that the companies should be more proactive and aware of the benefits of such projects, which basically comes down to education and motivation.
The companies use energy in buildings, but they also use it, as well as other inputs, in various production processes.
That is why we financed energy efficiency projects in production plants, which reduced energy consumption by at least 20 %.
PAST – national funding
We financed about 50 such projects with 2.5 million euros.
THE FUTURE
EU funding
Same as with the renovation projects, these projects are also eligible for EU funding.
Specific objective 4b1 – Increasing EE and use of RES in manufacturing industries (allocated 60 M€ all together, the first call was about 20M€; the ministry plans to publish 1-2 more calls.)
Food, beverage and tobacco industry ARE NOT INCLUDED
The first call for proposals was actually recently closed, and we received about 130 project proposals, which are currently in the evaluation phase. Total investment for those projects is around 120 M€, and the grants around 68M€. It is possible we will have another call for proposals in 2018.
National funding
In the future, we also plan:
to finance EE and RES in production plants, manufactories and family farms, that are not eligible for 4b1 – 970.000 euros
to encourage the activities of Croatian MIEE (Industrial Energy Efficiency Network) with about 4.000 euros per year. It should help the companies to understand the benefits of energy efficiency but also help them in applying for various funding opportunities.
PAST – national financing
In the past 3 years, the Fund financed 135 projects that included renewable energy systems.
One of the programmes we financed dealt exclusively with RES in tourism, and it’s a programme which is also going to be financed from the European Regional Development Fund.
FUTURE
EU funding
4b2 - Increasing energy efficiency and use of RES in private service sector (tourism and trade) - planned allocation: 40 M€
First call for proposals about to be published, with planned allocation of 10 M€
FUTURE
National funding
Also, in the near future, we plan to offer additional financing schemes, for the projects that are not eligible for EU funding within 4b2, like the family farms and owners of a rental property– 470.000 €
The key to greening a business would be efficient planning and constantly improving your business environment.
Energy audits are mandatory for companies, but the Fund tried to encourage the companies to implement environmental or energy management systems as well, knowing it would result in continuous improvements.
Also, related to the national Smart specialisation strategy of the Republic of Croatia for the period from 2016 to 2020, we plan to finance research and development projects
ONLY national funding
PAST
For these programmes, we have approved 230.000 euros in total so far
FUTURE
We plan to allocate about 807.000 euros annually for those activities in the next year:
350.000 euros for eco labels, EMAS, ISO and energy audits
457.000 euros for R&D projects
PAST – national funding
We approved more that 3.5 million euros to encourage e-mobility.
The share of transport in the total energy consumption accounts for 30 % and in GHG emissions at EU level for around 25 %, of which 71.3 % is generated by road transport.
In order to reduce the emissions, it is necessary to develop e-mobility and alternative mobility solutions. Companies have a major role in that, considering that most of them use or need some form of transport.
FUTURE – national funding
We plan to continue with these programmes in 2018.:
the eco driving training - planning to allocate about 200,000 euros per year
eco vehicles - about 2.8 M€.
charging stations – 850.000€
integrated and intelligent traffic systems – 1,1M€
In conclusion, I would like to give you an example.
In 2015, the Fund approved 127 million euros for various projects. And it turned out that a 1 euro grant generated 2.1 euro of investments, which is double the amount!
So, it is fair to say that our programmes not only encourage SMEs to „green” their business, but also encourage the entire economy to do the same!
Of course, there is always room for improvement, about which we will talk a bit later.
But in general, Croatia did a lot in the past few years, and the Fund is proud to have such an important role in these achievements.
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changes
education
there are no spectacular results at first!
Thank you for your attention and please don’t hesitate to contact us.
We are happy to join positive initiatives or just share our rich experience in this field.
Thank you.