NEFCO, E5P and Denmark to co-finance energy-efficiency project in Georgia

View over Arkhaltsike village in Georgia. Photo: Shutterstock

NEFCO and the Ministry of Finance of Georgia have today signed loan and E5P grant agreements aimed at financing energy-efficiency measures as well as introducing renewables and alternative sources of energy supply in public buildings in Georgia. The total investment for the project is EUR 5.14 million co-financed by NEFCO, E5P and the Ministry of Foreign Affairs of Denmark. NEFCO is acting as the implementing agency.

This is the first public sector investment by NEFCO in Georgia. The purpose is to contribute to the implementation of Georgia’s National Determined Contribution submitted to the UNFCCC and developed with EU and German support, and to help Georgia to comply with some of its commitments within the EU Association Agreement, including implementation of energy reforms.

The project aims to demonstrate the applicability of new building codes, which are being developed in the country. In total, 25 public buildings with different functions such as schools, kindergartens and municipality administration offices located in three different climate zones in Georgia will be included in the project.

The planned energy efficiency measures will generate annual cost-savings of approximately EUR 200,000 for the Government of Georgia. The expected annual CO2 reductions are approx. 1,300 tonnes. Furthermore, up to 10,000 people, mainly children, teachers and public employees will benefit from the upgraded buildings and better conditions.

“By signing the Association Agreement with the EU and joining the Energy Union, Georgia has taken a commitment to implement standards in terms of energy-efficiency and draw closer to EU regulations regarding energy-efficiency. We are pleased that our partners support the European aspirations of Georgia and make the significant contribution to the development of energy-efficiency in Georgia. This is the first project financed by NEFCO in Georgia. We believe that the project advances an important incentive to develop energy-efficiency of public buildings across Georgia”, said Nikoloz Gagua, the Minister of Finance of Georgia.

NEFCO will provide EUR 2.83 million in loan financing for the project. In addition, the Eastern Europe Energy Efficiency and Environment Partnership (E5P), to which the European Union is the largest contributor, will support the project with EUR 1.87 million in grant funding and the Ministry of Foreign Affairs of Denmark will provide EUR 0.44 million in grant funding for project consultancy through a bilateral programme with Georgia.

“Our loan to the Ministry of Finance is our first investment project to be implemented in Georgia, but we intend to finance several other projects within energy efficiency and renewable energy over the coming years together with E5P,” said NEFCO’s Managing Director Magnus Rystedt at the signing event held in connection with the E5P Steering Group meeting in Tbilisi.

“We are happy to support this project through the E5P grant, where the EU is the biggest contributor. Our goal is to enable citizens to enjoy the benefits of energy-efficient buildings. This requires that policy makers fully understand why and how to implement such projects. Next year, we’ll roll out a big assistance package to help Georgia preparing for large-scale energy efficient renovation of public buildings”, stated Mr Janos Herman, Ambassador of the European Union to Georgia.

Energy-efficiency measures include improvements to roofs, walls and pipes, as well as installation of new ventilation systems, boilers, heat pipes, thermostatic valves and other automation control systems, LED lights and solar PV energy systems.

This project is part of a larger EUR 4 million neighbourhood support programme from the Ministry of Foreign Affairs of Denmark, ‘Support to Energy Efficiency and Sustainable Energy in Georgia’. All the project development costs have been financed by the Danish International Development Agency (DANIDA) through a trust fund administered by NEFCO since December 2015. NEFCO has implemented several similar projects within the public sector in Ukraine, and the company currently has a project portfolio consisting of approx. 70 active projects related to energy efficiency and renewable energy.

For further information, please contact:

Bo Nyhus, Senior Investment Manager, NEFCO
bo.nyhus [at], tel. +358 10 6180 665

About E5P

The Eastern Europe Energy Efficiency and Environment Partnership (E5P) is a €200 million multi-donor fund managed by the EBRD and designed to promote energy-efficiency investments in Ukraine and other Eastern Partnership countries. The fund was established under an initiative of the Swedish government during its presidency of the European Union (EU) in 2009. E5P has funds of 20 million for Georgia. The European Union, as the largest contributor, has pledged €10 million, which is boosted by additional contributions from the Czech Republic, Denmark, Estonia, Georgia, Germany, Lithuania, Norway, Poland, Sweden and the USA. The E5P grants are to help Georgia improve energy efficiency and the environment, contributing to economic competitiveness and policy dialogue. The E5P grants are used alongside IFI loans for municipal investments such as solid waste management, street lighting, local transport and the insulation of public buildings. Read more at

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