Energy Efficiency is often described as the  biggest energy resource, the “first fuel”, as it is competitive, cost effective and widely available. First, in Albania, the 2015 Energy Efficiency Law introduced the ESCO concept and energy performance contracting. Then, it was followed with Law on Energy Performance of Buildings, adopted by the Parliament in November 2016. Nevertheless, the by-laws and methodologies, etc. to be adopted by the Ministry of Energy and Industry (MEI) are still under development.

On 15 Mar 2017, ESC issues Reasoned Opinions against Albania and Bosnia and Herzegovina for non-compliance with rules on energy efficiency. The Energy Community Secretariat sent reasoned opinions as the next step in dispute settlement cases launched for non-compliance with rules related to energy efficiency. The reasoned opinion, request a reasonable level of implementation of the provisions of Directive 2006/32/EC and the adopation of the Energy Efficiency Action Plans.

Notwithstanding, the concrete legislative progress achieved in close cooperation with the international assistance, the drafting of other energy efficiency legislation, and the adoption of the 2nd and the 3rd EEAP as well as the set of by-laws to implement the new legislation are essential for Albania’s compliance with the energy efficiency acquis. Furthermore, the implementation of energy efficiency policy in Albania will require a strong institutional and financial framework.

The EC, the Energy Community, the WBIF, IFIs and bilateral donors are providing technical assistance to beneficiary countries to facilitate compliance. However, a proper legal transposition of the energy efficiency legal framework alone will not bring the significant changes needed to realize the energy saving potential of the Contracting Parties. Durable impact can only be achieved through investments both by public sector institutions and private actors with commercial and International Financial Institutions (IFIs) financing. The necessary efficiency investment must be financed for the potential to be harvested.

Among the main stockholders of the sector, EBRD has been active in financing sustainable energy in the Western Balkans since 2009, whereby a total of EUR 164 million has been channelled via local commercial banks for energy efficiency and renewable energy projects under the Bank’s Western Balkans Sustainable Energy Financing Facilities (WeBSEFF I and II and KoSEP).

While WeBSEFFs have been successful in helping scale up energy efficiency and renewable energy action and investments in the private (industrial enterprises and SMEs) and public sectors, an area which has so far not received sufficient attention and support is the residential sector. Residential buildings in the Western Balkans account for a significant share of the total energy consumption and are at the same time highly energy inefficient. Technical opportunities for improving energy efficiency in existing buildings are thus significant with potential energy savings estimated between 30-50%.

As part of the extension of the REEP programme (REEP Plus), the EBRD now intends to establish the Western Balkans Green Economy Financing Facility which will take the form of credit lines for a total of up to ca. EUR 85 million fund based in the last agreement in the amount of 50 million euros signed on 09 Feb 2017 and the €30 million grant to implement the next phase of the REEP, for on-lending to eligible Sub-borrowers to finance residential energy efficiency investments.

However, the money is not the only factor at play. There are still many barriers to the uptake of energy efficiency measures, primarily of a legal and regulatory nature. The regulatory framework must be improved to facilitate entrance of new actors to impact the markets. The region’s leaders have just embrace the ‘energy efficiency first’ principle to improve their countries’ and seems that this is only the beginning of the WB’s engagement in this sector.

Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author at the “lorenc_gordani@albaniaenergy.org”.

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