Due to a long period of neglect and under-investment, public infrastructure in Bosnia and Herzegovina (BiH) is now in a dire state and in urgent need of upgrade and modernization. In its Nationally Determined Contribution (NDC) under the Paris Agreement, BiH explicitly recognizes the potential of public sector buildings for greenhouse gas (GHG) emission reduction. Public buildings have been identified as the sector with the largest potential for cost-effective energy saving in BiH (20-60%).
Detailed energy audits conducted in public facilities by UNDP confirm that average energy use in a building can be reduced cost-efficiently by about 60%, assuming a given comfort level in the building (e.g. 20°C) before and after retrofitting.
In addition to energy efficiency, significant potential for GHG emissions reduction lies in fuel switch measures: over 80% of public sector buildings are currently using fossil fuels (coal, light fuel oil (LFO), natural gas) or district heating systems, which are also predominantly coal-based.
Deployment of BiH’s vast renewable energy resources – bioenergy (biomass/biogas), solar and other sources – combined with investments in energy efficiency, therefore have the potential to play an instrumental role in reducing GHG emissions and energy use in public buildings, currently amounting to approximately 10% of BiH’s annual governmental budget.
The current financing paradigm for investment in low-carbon retrofits of public buildings in BiH can be summarized as follows:
- The existence of seemingly numerous, but cumulatively insignificant, grant-based funding sources/projects from national and international organizations complemented by end-users’ own finance;
- The lack of a coordinated and integrated approach to public building retrofits that leads to ineffective and sub-optimal allocation of public funds;
- The lack of private sector involvement and interest in market-based finance, including lack of a developed market for the ESCO business model and energy performance contracts.