A New Pillar Supports the Lebanese Sustainable Energy Sector
A New EUR 80 million Credit Line from EIB and AFD, subsidized by the Banque du Liban and incorporating technical assistance financed by the European Union, helps Lebanese companies to reduce their energy intensity and carbon footprint.
Today the official launch of LEEREFF, the Lebanon Energy Efficiency and Renewable Energy Finance Facility, took place during the International Beirut Energy Forum under the auspices of the Governor of Banque Du Liban (BDL) Mr. Riad Salameh and in the presence of international and local high ranking officials, key energy experts from Lebanon, the Arab world and the international community, as well as the Lebanese Financial Sector.
LEEREFF is a dedicated credit line for sustainable energy investments in: Renewable Energy, Green Buildings, and Energy Efficiency in business and industry. LEEREFF currently has a total volume of EUR 80 million, of which EUR 50 million are provided by the European Investment bank (EIB) and EUR 30 million by Agence Française de Développement (AFD). The credit line is intermediated through the Banque du Liban (BDL), who provides interest rate subsidies and will make the proceeds available via local Partner Banks, which will be announced by the end of October.
”Energy efficiency gains and renewable energies have plenty of untapped potential in Lebanon. We are glad to provide the opportunity for SMEs to gain their share of the economic opportunities they provide,” stated Olivier Ray, Director of AFD’s Lebanon and Syria office.
By Investing in energy efficient or renewable energy technologies, companies benefit directly from energy cost savings as well as modern technologies, whilst making a contribution to lowering the overall energy demand in Lebanon. In addition to the investment support LEEREFF offers free technical assistance provided by an international team of engineers. “LEEREFF will give Lebanese companies the opportunity to improve their competitiveness and at the same time reduce pollution levels. The Paris Agreement to reduce the greenhouse gas emissions needs to be broken down to concrete actions and investments at the local level. Our partnership with Banque du Liban, AFD and the Lebanese commercial banks will facilitate some of the investments needed in Lebanon. Furthermore, we provide technical assistance that will promote and deepen the know-how of energy efficiency and renewable energy in Lebanon. Today, we are pleased to see the launching of the facility and we are looking forward to continue providing more support to Lebanese enterprises because supporting investments in energy efficiency and renewable energy is a key priority of the EIB” said Reinhard Six, Senior Engineer – EIB.
The implementation of targeted energy efficiency measures allows companies to reduce their energy costs, whilst the implementation of renewable energy sources allows companies to increase their security of supply. The benefits tend to be well known to commercial and industrial companies. Selecting the optimal solution however, often proves challenging to decision makers. The free technical assistance package, financed by the European Union (EU), is designed to bridge this gap. Mr José-Luis Vinuesa-Santamaria – Head of Section / Economy & Local Development explained: “The European Union remains fully committed to supporting Lebanon meeting its energy and climate change goals. We can do so, by developing more effective and innovative partnerships and instruments that go beyond classic development assistance. Today, grants alone are not enough. It is therefore fundamental to mobilise all possible sources of capital, including private sector investment. We believe that the new Lebanon Energy Efficiency and Renewable Energy Finance Facility can help ensuring that more renewable energy projects and related technologies, good for the environment and that contribute to job creation, are financed. The EU contributes more than €4 million through a Technical Assistance Grant”.
On a wider scale, LEEREFF is not only a credit line, it is a vital project for the improvement of Lebanon’s sustainable energy sector, supporting on-going efforts that will provide Lebanon with a better tomorrow. As Wael Hamdan, Executive Director, Head of Financing Unit, Banque du Liban said: “Banque du Liban has played a major role in bridging the gap between the financial sector and the energy sector in Lebanon, by shifting resources from unconventional energy technologies to cleaner energy technologies. BDL has launched since 2010 a series of financial initiatives to promote and foster the development of Renewable Energy and Energy Efficiency sectors in Lebanon. Together with the Ministry of Energy and Water and International Institutions that showed commitment to these sectors, we hope that these innovative financing mechanisms will enhance the financial sustainability of these two sectors in Lebanon.”