GCF and GEF working together to ensure positive impact on climate change mitigation in Bosnia and Herzegovina

July 3, 2020

John O’Brien, Regional Technical Advisor, Climate Change Mitigation, UNDP Istanbul Regional Hub for Europe and Central Asia

Siniša Rodić, Climate Change Mitigation Programme Manager, UNDP Bosnia and Herzegovina

Seventy percent of the public buildings in Bosnia and Herzegovina (BiH) were designed and built more than 30 years ago with little consideration for energy efficiency, let alone carbon footprint. In addition, during the 1990s many public buildings in BiH were damaged as a result of war and conflict which took place from 1992 - 1995.

Since the energy production and consumption, particularly in buildings, is the largest source of greenhouse gas (GHG) emissions in the country, the Green Climate Fund (GCF) and Global Environment Facility (GEF) have joined forces to support Bosnia and Herzegovina governments at all levels to advance climate change mitigation efforts using innovative approaches and with the goal to accelerate investments in energy-efficiency achieve transformational change.

The cooperation between these two global climate funds (GCF and GEF) has been critical in accelerating the climate-resilient development of the country. The efforts have been geared towards further strengthening and scaling up of a nation wide energy management information system (EMIS) and through the creation of innovative financial mechanisms that should boost energy-efficiency in public buildings and public lighting sector, as well as increase of water-saving measures.

Primary School in Blatnica, energy retrofitted within the UNDPs GED project

There are over 7.600 public buildings in the country in need of energy retrofit; while over 80 percent of public sector buildings are currently using fossil fuels (coal, light fuel oil and natural gas), thus contributing to pollution and adverse climate change. Retrofitted buildings can contribute to the reduction of energy consumption in heating and cooling on average with about 60 percent of cost-efficiency.

To help achieve the low-carbon urban development (LCUD) paradigm shift in BiH, technical assistance funds from the projects have been used to support municipalities with the development of the Sustainable Energy and Climate Action Plans (SECAPs) and align them with the associated local climate targets. Municipalities have been encouraged and trained to collect and monitor data on energy use and GHG emissions through developing, scaling-up and institutionalizing the Energy Management Information System (EMIS). This system was first pioneered by UNDP in Croatia and the transfer of knowledge and technology from Croatia and later Serbia to Bosnia and Herzegovina providesa good example of South-South cooperation. The development of SECAPs is currently underway and in its closing steps – final documents will soon be ready for final approval and submission to the Covenant of Mayors in 2020.

Kick-off meeting with Mico Micic, Mayor of Bijeljina

There is significant potential to increase energy efficiency, but the country still faces several barriers. Lack of innovative financing mechanisms, absence of private sector investment including through Energy service companies (ESCOs), institutional and legislative barriers, inadequate implementation of “polluters pays principle” are just some of the impediments. While the GEF project focuses more on piloting the energy management information system and developing the ESCO mechanism, the GCF project is focused more on utilizing a blended approach of grant money and loans, for scaling up investment in the buildings in greatest need of investments in energy efficiency, and low interest loans for all other buildings as a main means of achieving paradigm shift. GCF and GEF projects have placed considerable importance on maintaining strong cooperation with persons who worked in the former UNDP offices in Croatia and with the UNDP office in Serbia to achieve their goals and targets for institutionalizing EMIS and developing the ESCO mechanism.

Workshops on SECAPs were organized in 37 municipalities

To promote market transformation, both projects have thoroughly worked on scaling-up support to low-carbon urban development by supporting the introduction the National Investment Framework (NIF) as a tool to support gradual shift from predominantly grant-based financing of energy efficiency and LCUD projects towards more innovative financing models approach to address specific structural, technical and financial barriers in BiH. The proposed low-carbon solutions in public buildings will support the transition towards a zero-carbon public sector with a corresponding substantial reduction of GHG emissions.

Following tremendous and wide ranging support and cooperation from all relevant stakeholders through means of workshops, meetings and constant consultations, the National Investment Framework hasbeen ultimately finalized in June 2020 and is currently in the process of being adopted at both state and entity level. The NIF will support significant policy and regulatory changes which are essential for the low-carbon public building sector and for the creation of a harmonized approach for the allocation of public finance. The NIF design focuses primarily on how to best supplement existing/committed financial programs in Bosnia and Herzegovina. But, it also includes guidance on how to potentially leverage additional private/commercial investment in low-carbon reconstruction of public buildings.

In addition introduction of renewable energy measures in buildings, in particular through the switch from light fuel oil to locally available biomass, will improve the security of energy supply for essential public infrastructure.  Multiple benefits will be achieved ranging from improved conditions for occupants and users of public buildings, most of whom are women and children, reduced pollution in cities, better public health and spurring local economic growth and employment.

These two projects in Bosnia and Herzegovina provide an excellent example of GCF and GEF working together to achieve positive impact and transformational change in the area of climate change mitigation.

Kids playing in Zenica kindergarten which was energy retrofitted within GED project