Welcome to the
EBRD Sustainability
Report 2014

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Impact

Through our investments, we make a real difference to environmental and social sustainability in our region. This in turn improves the quality of life for people across the countries where we invest.

In 2014 we invested €8.9 billion across 377 operations in more than 30 countries, assessing each project for its ability to protect and benefit the environment, employees and communities.

While we continued to bolster economies in our traditional region, the Bank also stepped up financing in the southern and eastern Mediterranean (SEMED) region. Total investments in SEMED topped the €1.7 billion mark in December, just two years after we started investing in the region.

All of these projects are designed to meet the highest environmental and social standards.

Read more:

Environmental impact

7.4 + 10.5 + 390 million tonnes of CO₂ reductions + million tonnes of water saved + thousand tonnes of waste avoided

In 2014

170 + 12 + 15 sustainable energy projects + investments signed with a gender component + donor-funded commitments totalling €1.2 million for gender activities
  • Exceeded US$ 8 billion target pledged at Rio+20 Summit
  • Since 2006: supported over 850 SEI projects worth more than €80 billion
  • Investments in the MEI sector are expected to benefit 5 million people in the EBRD region
  • The EBRD Green Project Portfolio comprised 313 loans across 25 countries in 2014

Sustainable resources and climate change

Sustainable Resource Initiative

The EBRD’s Sustainable Resource Initiative (SRI) is an umbrella initiative that promotes efficiency and innovation in three areas vital to the countries where we invest: energy, water and materials. Resource efficiency has become a priority for all countries in our region due to the increasing demand for resources, volatile prices and growing environmental concerns, including the impacts of climate change. The SRI is our response to these challenges.

We continue to finance energy efficiency, renewable energy and adaptation projects through our Sustainable Energy Initiative, which was launched in 2006; but in addition, the SRI tackles water and materials efficiency, including through the promotion of recycling and the reuse of waste streams. This focus on water efficiency is particularly relevant as we develop activities in the southern and eastern Mediterranean region and continue to invest in Central Asia.

In 2014 we invested €3 billion in SRI projects supporting the sustainable use of energy and other resources, accounting for 34 per cent of our annual Bank investment.

SRI diagram

The SRI relies on our proven business model of combining finance with technical assistance and policy dialogue. The Initiative not only uses the full range of the Bank’s instruments to finance sustainable resource projects across our region, but also provides technical assistance, ranging from market analysis and resource audits to training and awareness-raising.

As part of its policy dialogue activities, the SRI also works with governments to support the development of strong institutional and regulatory frameworks that are prerequisites to sustainable resource investments.

Sustainable Energy Initiative

The effects of climate change pose a significant challenge in countries where we invest. Many of them lag behind economies at a similar level of development when it comes to the sustainable use of energy, water and other resources. To help mitigate the economic, environmental and social risks to people and businesses in the region, the EBRD launched the Sustainable Energy Initiative (SEI) in 2006.

The Initiative aims to reduce carbon emissions, make the region’s economies more energy efficient and independent, and help them adapt to climate change. In 2014 the SEI’s scope was broadened with the launch of the Sustainable Resource Initiative to promote the efficient use of materials and water.

We undertake climate projects across all of the sectors and countries in which we work. Transactions range from support for wind, solar and hydropower generation to investments in industrial and residential resource efficiency, green transport, municipal infrastructure, better energy transmission and cleaner power plants.

Between 2006 and the end of 2014, we invested over €15 billion in projects supporting the sustainable use of energy and other resources. In 2014 these accounted for 34 per cent of our annual Bank investment, with €3 billion of finance committed over 170 transactions. These should result in annual CO2 reductions of 7.4 million tonnes, annual water savings of 10.5 million tonnes and waste savings of nearly 390,000 tonnes.

The EBRD business model for climate finance combines commercial project financing and technical assistance through market analysis, energy audits, training, awareness-building and grant co-financing. The model also incorporates policy dialogue to support the development of a strong institutional and regulatory framework that incentivises sustainable resource projects.

Water efficiency

The EBRD region includes some of the most water-stressed countries in the world. To mitigate the risks associated with water scarcity, we invest in projects that promote water efficiency and support the introduction of innovative, water-efficient technologies.

The efficient use of water is important for economic development, food security, environmental quality and political stability. However, many countries in which we invest still lack sufficient access to water. Often, water governance and water markets are weak and provide only limited or no incentives to manage water efficiently, let alone undertake investments in new technologies that would increase water efficiency.

Furthermore, many countries in the EBRD region are vulnerable to increasing water scarcity caused by climate change impacts, such as rising temperatures and unpredictable precipitation. Improving water efficiency is therefore an essential part of our work on climate change adaptation in such countries.

The water component of the Sustainable Resource Initiative builds on the Bank’s track record of financing municipal water infrastructure projects by focusing investments on demand-side water efficiency improvements across a wide range of sectors. In particular, we support corporate clients in optimising water management for operational efficiency, improving product design and developing sustainable manufacturing practices.

We also offer technical assistance through energy and water investment programmes and audits. These aim to identify specific water-efficient technologies relevant to enterprises and suggest improvements in corporate water management practices. Technical assistance also comprises stakeholder engagement programmes, which are mainly implemented in the municipal sector.

Materials efficiency

Resource inputs and production waste are costly for businesses, the economy and the environment. These costs can in many cases be avoided, or at least reduced. The EBRD’s materials efficiency work supports businesses in a range of sectors across the Bank’s region to optimise the use of resources and to minimise the generation of waste, or find alternative uses for it.

We take a systematic cradle-to-grave perspective of a company’s resource use, based on the waste minimisation hierarchy (reduce-reuse-recycle). The aim is to identify bankable projects that help companies to reduce resource inputs through efficiency improvements and/or to capture value from waste streams.

Opportunities for this include the recovery of fertilisers and primary chemicals from agricultural residues, or the development of return markets for fly ash in the cement industry. Once these opportunities have been exhausted, support will be extended to reuse or recycle unavoidable waste generation by optimising production processes.

We also offer dedicated resource efficiency audits to existing and prospective clients to help them identify potential projects and optimise their project design. These audits include a range of analyses of input/output streams in a site or company, reviews of the performance of existing technologies, and recommendations for investment in relevant resource-efficient technologies. Audits are followed up by detailed development work should clients be interested in pursuing projects further.

Opportunities for improving materials efficiency can be found in many enterprises in the EBRD region. The Sustainable Resource Initiative’s initial focus for its materials efficiency component is therefore on sectors with the highest potential. These include food production and processing as well as resource-intensive manufacturing industries such as steel and metals, pulp and paper, and chemicals.

Climate change adaptation

The impact of climate change – already seen in temperature shifts, extreme weather events and rising sea levels – will have wide-ranging effects for all kinds of businesses. Many of the countries in which the EBRD invests are particularly vulnerable to climate change, in part because of their geographical location and characteristics, but also because under-investment has resulted in ageing infrastructure and facilities. In 2013 we provided US$ 187 million (€136 million equivalent) in financing and technical cooperation funding for climate adaptation projects. A further US$ 31.3 million (€22.7 million equivalent) was provided for projects with both climate adaptation and mitigation benefits. Climate finance figures for 2014 will be reported later in 2015 as part of the Joint Report on MDB Climate Finance.

We are increasing our support to projects that focus on adaptation and resilience to climate change by building on our successful sustainable energy business model, which incorporates policy dialogue, technical cooperation and project investment. We help clients to identify the impacts of climate change that will affect their operations, develop and implement strategies to facilitate adaptation, and invest in measures and technologies that improve their resilience to climate change.

Adaptation and resilience are also about recognising new opportunities. Our initial investments in these areas demonstrate that early-moving clients can reduce costs, maximise profitability and increase competitiveness.

Watch our video on hydroelectric power in Tajikistan.

Promoting energy efficiency through partner banks

The EBRD’s Sustainable Energy Financing Facilities (SEFFs) unlock energy-saving potential and build expertise by extending credit lines to financial institutions. They provide these institutions and their clients with expert guidance on designing lending products and assessing opportunities to turn sustainable energy projects into sound investments. Through these facilities and our direct sustainable energy lending, companies of all sizes can pursue energy efficiency or small-scale renewable projects that boost profitability and increase competitiveness while also reducing their carbon footprint. Loans to the residential sector, meanwhile, contribute to reducing energy consumption and utility bills.

In 2014 we invested €3 billion in 170 energy efficiency projects across these financing facilities, including a US$ 282.5 million (€232.5 million equivalent) contribution to a US$ 350 million (€288 million equivalent) residential energy efficiency programme in Turkey. That country saw the launch of the Bank’s first resource efficiency credit line. We also launched our first SEFF in Morocco, providing up to €80 million for energy efficiency investments, with co-financing from the European Investment Bank, the AFD and KfW.

International action on climate change

The EBRD has responded to calls for multilateral development banks to engage in the financing of clean energy projects by participating in multi-donor funds, such as the Climate Investment Funds (CIF) and the Global Environment Facility. These funds seek to leverage global climate finance through risk-sharing, technology transfer, advisory support and concessional financing.

We merged our commercial financing with CIF grant co-financing and technical assistance to increase the affordability and accelerate the implementation of projects such as the modernisation of the Qairokkum hydropower plant in Tajikistan. Between 2006 and the end of 2014, donors provided a total of €153 million in grant contributions in support of EBRD climate projects.

Sustainable Energy Initiative results

The third phase of the EBRD’s Sustainable Energy Initiative (SEI 3) covers the 2012-14 period. The programme has achieved impressive results, as set out in the table below, and has enabled us to deliver on the pledge we made at the Rio+20 Summit in June 2012.

At that time, the EBRD had set a target of sustainable energy financing of US$ 8 billion (€7 billion equivalent) for the 2012-14 period, with a total project value of US$ 30 billion (€25 billion equivalent). This target was achieved in June 2014. Investments made during this period will save an estimated 283 PJ of energy per year once fully implemented and prevent the release of about 22 million tonnes of CO2.

The share of sustainable energy projects in our total annual investments has grown steadily over the years. Cumulative investments under the SEI topped €15 billion in 2014 and supported over 850 projects worth more than €80 billion in total. Projects include direct financing for industrial energy efficiency and wind farms, and credit lines for insulation in residential buildings. Reflecting our mandate and business model, close to two-thirds of our sustainable energy projects are in the private sector.

All of the projects we invest in are assessed for their SEI potential during the Bank’s development and approval stages. These assessments help to identify SEI project components and allocate SEI finance to these components. All project-related data are subject to the Bank’s monitoring, reporting and verification framework.

We also work with other multilateral development banks on a common methodology to track financial flows dedicated to climate change. The latest joint report was published in September 2014, and provides comparative and aggregate information on climate mitigation and climate adaptation finance for 2013.

SEI 3 Unit Target
(2012-14)
2012 2013 2014 Total
No. of projects No target 138 151 170 459
Investment volume € billion 4.5-6.5 2.3 2.5 3.0 7.8
Energy savings PJ p.a. No target 117 52 114 283
Renewable power generation TWh p.a. No target 1.8 0.8 2.3 4.9
CO2 emission reductions M tonnes CO2 p.a. 26-32 8.8 6.4 7.4 22.6

Greenhouse Gas Assessment for 2014

Our Greenhouse Gas Assessment provides an estimate of the net carbon footprint that will result from EBRD-financed projects signed during the year, once the projects are fully implemented. The calculation is based on estimated emission reductions from SEI projects and estimates of “new” greenhouse gas (GHG) emissions from projects that involve new building or expanding capacity.

All new projects are screened and those with potentially significant GHG impacts – either emission savings or increases beyond a threshold of 20 ktCO2e per year – are subject to a more detailed assessment. The assessment also estimates the projected GHG savings that will result from smaller energy efficiency and renewable energy projects that we finance through targeted credit lines managed by financial intermediaries. GHG data for the project assessments come from a variety of sources, including environmental impact assessments (EIAs), energy audits and, in some cases, calculations carried out by our engineers. The calculations are reviewed and verified by an external GHG consultant.

The results of the 2014 Greenhouse Gas Assessment show that GHG savings resulting from investments in energy efficiency and renewable energy dominate the overall assessment. 2014 is the ninth consecutive year in which our investments have been forecast to deliver aggregate GHG savings.

The GHG Assessment includes emission increases or reductions that are directly associated with a project (Scope 1 and 2) and excludes emissions that are associated with the end use of products, such as consumption of fossil fuels by consumers.

The table does include estimated “third-party and system” savings that are expected from the end use of climate-friendly products or from overall efficiency improvements in power generation and transmission systems. For example, such third-party savings include reductions in electricity use by customers following the installation of smart metering, and energy savings in buildings using energy-efficient glass manufactured by projects we fund. While such savings fall outside of the current scope of the EBRD Greenhouse Gas Assessment Methodology, their contribution to reducing GHG emissions is recognised within the SEI results.

Category Number of investments
above significance threshold
GHG impact
(MtCO2e per year)
Renewable energy (RE) 14 - 1.26
Energy efficiency (EE) 5 - 0.19
EE with capacity expansion 5 - 2.99
Waste management 1 - 0.05
Greenfield (new build) 2 +0.08
RE and EE credit line 27 (threshold not applied) - 0.50
Total - 4.91
Third-party and system savings - 0.50

The EBRD has published GHG estimates for its signed projects every year since 2002. Since the introduction of the SEI in 2006, the net impact – comparing projects that increase emissions with those that reduce emissions – is estimated to result in an overall reduction in GHG emissions.

In any one year, the results are heavily influenced by a small number of large projects. The 2014 portfolio, for example, includes a power efficiency project in which generation output will be increased by recovering and converting waste heat into electricity. This additional output is expected to displace existing generation on the grid, leading to emission savings of 3 MtCO2 per year.

The recent track record shows that, by prioritising investments in renewable energy and energy efficiency, we have been able to grow our business volume and promote transition while also reducing GHG emissions.

Sustainable transport

The EBRD invests in transport projects that connect businesses to suppliers and markets, and give citizens access to economic opportunities and essential services. At the same time, transport consumes resources and can have an impact on climate change, highlighting the importance of supporting the development of low-carbon transport systems and raising environmental standards in the countries in which we invest.

In 2014 we signed 26 transactions in the transport sector for a total EBRD investment of €1.3 billion across the aviation, maritime, rail, road and intermodal sectors. The financed projects were geographically and sectorally diverse, ranging from a relatively small investment in Belarus to large infrastructure projects supporting regional integration in FYR Macedonia, Moldova and Ukraine.

Of this amount, a record €479 million was provided for energy efficiency and climate change mitigation investments under the Sustainable Energy Initiative (SEI) with predicted emission reductions estimated at 500,000 tCO2e per year. This represents a contribution of 40 per cent of our annual business volume, which reflects our enhanced focus on low-carbon transport as a core theme of the EBRD Transport Strategy (the SEI’s business volume for transport operations in the period 2007-12 was 13 per cent). Flagship transport projects signed under the SEI in 2014 included modernisation programmes for Egypt and Moldova’s national rail systems and short sea-shipping services between Turkey and Europe.

For further information visit ebrd.com/transport.html

Road safety

The EBRD's Transport Strategy also places a high priority on road safety. The number of traffic-related deaths is considerably higher in our region than in countries that are members of the Organisation for Economic Co-operation and Development (OECD) and emerging markets with similar income levels, and this also results in significant economic losses. Road safety is therefore one of the biggest issues in sustainable transport facing our region and we strongly promote road safety improvements across our investments through road safety audits, outreach activities, awareness campaigns and technical cooperation (TC) projects aimed at strengthening institutions and building capacity.

Last year the EBRD launched road safety campaigns in Azerbaijan, Moldova and Ukraine linked to major investments in regional roads. These campaigns aimed to improve conditions for the most vulnerable road users – including children travelling to school – and raise awareness among drivers and local officials in charge of road infrastructure. Donors strongly support the EBRD’s work on road safety, including our extensive policy dialogue. In 2014 we developed a TC programme specifically designed to provide our clients with assistance in this area.

Our new Environmental and Social Policy, approved in 2014, includes for the first time specific performance requirements on safety for the Bank’s road projects. This will help to consolidate our efforts in this area and will support our clients’ efforts to reduce the number of road accidents in the region.

Municipal and environmental infrastructure

The EBRD’s investments in the municipal and environmental infrastructure (MEI) sector provide millions of people with access to safe drinking water, sanitary waste disposal services, green public transport, well-maintained urban roads and energy-efficient district heating. We work with local governments, private operators and donors to bring tangible improvements to the daily lives of citizens in the countries where we invest.

In 2014 we financed 41 projects in the MEI sector, representing a total EBRD commitment of €717 million. Such investments are expected to benefit a total of 5 million people in the EBRD region by providing them with improved water services, district heating, solid waste facilities and other municipal infrastructure. Financing will also benefit the 36 million people who are expected to use public transport systems annually.

Some 47 per cent of MEI investments financed in 2014 contributed to energy efficiency and climate change mitigation, with predicted emission reductions estimated at 312,000 tCO2e per year. As in previous years, our MEI investments leveraged considerable volumes of loan and grant co-financing from the European Union and other sources.

Gender

Gender equality is essential to a modern, well-functioning economy and society. Countries that provide women and men with equal opportunities enjoy stronger growth and their companies compete better on the world stage. At the individual level, measures aimed at creating a fair, diverse and flexible workplace benefit men and women alike.

The EBRD believes that supporting gender equality is an important means of achieving economic growth in the countries in which it invests. Through projects, policy dialogue and other activities, we seek to increase the economic opportunities available to women, especially in countries with the greatest levels of gender inequality.

In 2014 we signed 12 investments with either a gender focus or component. These included: the launch of Women in Business programmes in Egypt, Turkey and the Western Balkans, which address women’s access to finance from both a demand and a supply perspective; projects that aimed to increase access to skills and employment in Egypt and Turkey; and projects that ensured improvements in access to services such as public transport or water in Egypt and Morocco.

The business case for individual companies to support gender equality is also very strong. Firms with gender-diverse management teams tend to be more successful and employers that offer family-friendly work environments enjoy higher levels of staff satisfaction, loyalty and productivity.

When it comes to working with customers, businesses that respond equally to the needs of women and men have a wider client base, enjoy increased profits and emerge as market leaders.

The EBRD’s work in gender equality benefits significantly from the support of donors. In 2014 there were 15 donor-funded commitments totalling €1.2 million for gender activities linked to investments focused on improving access to finance, skills, employment and services. Donor funds are also used to further policy dialogue. In 2014 this included supporting reforms to improve the investment climate in Tajikistan, particularly those reforms that assist both men and women entrepreneurs, by advising the country’s investment council on gender-related issues.

Economic inclusion

At the EBRD, we also believe that economic inclusion – the opening-up of economic opportunities to previously under-served social groups – is integral to development. Based on the concept of equal opportunity, the Bank measures the extent to which economic institutions, markets and education systems extend opportunities to people regardless of their gender, place of birth or social background.

Promoting economic inclusion has become essential for the EBRD in light of growing youth unemployment, low participation of women in the workforce – especially in the southern and eastern Mediterranean region – and the stark differences in regional economic performance within countries, particularly in south-eastern Europe. Encouraging economic inclusion also addresses the business needs of many EBRD clients, who increasingly seek to reach under-served groups such as women entrepreneurs, recruit highly skilled young staff or tap under-used human resources.

Special environmental programmes

Eastern Europe Energy Efficiency and Environment Partnership

The Eastern Europe Energy Efficiency and Environment Partnership (E5P) is a multi-donor fund set up in 2010 and managed by the EBRD’s Environment and Sustainability Department. The purpose of the fund is to facilitate investment in energy efficiency and environmental projects, to reduce greenhouse gas emissions and to promote policy dialogue and regulatory reforms in E5P countries.

The E5P mainly provides investment grants to co-finance municipal sector loans provided by the EBRD and other participating international financial institutions, including the European Investment Bank, the International Finance Corporation, the Nordic Environment Finance Corporation, the Nordic Investment Bank, the World Bank and the Council of Europe Development Bank.

The E5P’s initial focus has been Ukraine, with total pledges nearing €92 million, including funds from the European Union (€40 million) as the largest contributor. Other contributors include Sweden, Ukraine, the United States and eight other European countries. In 2014 the E5P Assembly approved €9 million in grant funds for two EBRD projects to renovate district heating networks in Lutsk and Poltava.

Based on the successful start of the initiative in Ukraine, both Georgia and Moldova have signed agreements to join the Fund, and Armenia is likely to follow soon. The E5P has secured pledges close to €60 million for these countries. Half of the funds were pledged by the European Union and we have already started to identify new potential projects.

Northern Dimension Environmental Partnership

The Northern Dimension Environmental Partnership (NDEP) is a multi-donor fund that was established in 2002 and is managed by the EBRD. Total contributions to the fund are €347 million.

The fund is split into two windows. In the first, the EBRD’s Nuclear Safety Department is using grant funds provided by NDEP contributors (€167 million) to tackle risks caused by radioactive waste deposited in the north-west of Russia. The nuclear safety projects within NDEP are fully grant financed.

Our Environment and Sustainability Department manages the environmental window of the fund to promote municipal sector projects for water and wastewater treatment, energy efficiency, and municipal and agricultural waste management in north-western Russia and northern Belarus. The NDEP funds for environmental projects total €180 million and are used as co-financing to support loans from the EBRD and other NDEP-approved implementing agencies (the European Investment Bank, the Nordic Investment Bank, the Nordic Environment Finance Corporation and KfW).

In 2014 a significant number of projects were initiated and a record amount of grant funds were disbursed for several ongoing projects, predominantly for the Neva Programme in St Petersburg. Thanks to cooperation with NDEP, St Petersburg has raised the level of wastewater treatment in the city to over 94 per cent. The Neva Programme, supported by a €24 million grant from NDEP and a €6 million grant from the EBRD Shareholder Special Fund, is a huge undertaking worth close to €563 million.

Using donor funds to improve sustainability

The EBRD is committed to promoting environmentally sound and sustainable development in all of its activities. Technical cooperation (TC) is a key tool in fulfilling this commitment, working in conjunction with the Bank’s investment capital, due diligence procedures and policy influence to bring about environmental and social changes.

In 2014 our Environment and Sustainability Department published a profile booklet highlighting how specific TC projects have delivered environmental and social benefits in the countries in which we invest. The booklet, Promoting Sustainability through Environmental and Social Technical Cooperation, explains our work in three strategic areas: capacity-building, project preparation, and health and safety.

Through the Environment and Sustainability Department, we deliver a wide range of TC projects to address environmental and social issues, and the broad goals of assurance, impact and engagement that define our approach to sustainable development.

In addition to the direct benefits that such TC operations bring to Bank-financed projects, this important strategic capability helps us to address systemic barriers to successful investment in the sustainable development of market economies, respond to changing environmental and social priorities and opportunities in our region, and act as a well-informed and effective partner in international cooperation and policy dialogue initiatives.

Over the last 10 years, we have delivered more than 150 technical cooperation projects and framework programmes through our Environment and Sustainability Department, with total funding of approximately €20 million from donors and the Shareholder Special Fund.

TC operations aimed at achieving environmental and social benefits include both transactional TCs in direct support of specific Bank operations and non-transactional (or stand-alone) TCs that support Bank operations and strategy at the broader level.

Environmental Sustainability Bonds

The EBRD established the Environmental Sustainability Bond Programme (ESBP) in response to investor demand for this type of bond product. The projects that are financed by the ESBP achieve specific environmental benefits and, collectively, comprise our Green Project Portfolio (GPP). The ESBP enables us to broaden our sources of funding. Since 2010 we have issued 19 bonds under the Programme for a total of €530 million.

In 2014 we issued seven unlisted Environmental Sustainability Bonds, denominated in Australian dollars, Brazilian real, New Zealand dollars and Turkish lira. Not only do green bond issues attract a new investor base, but they also allow us to highlight to a wider audience our emphasis on environmentally sound and sustainable development within our core mandate.

Investors also have the opportunity to invest in our other bonds. Total issuances in 2014 amounted to €5.3 billion.

The EBRD's Green Project Portfolio

At 31 December 2014, our Green Project Portfolio (GPP) comprised 313 loans across 25 countries where we invest, totalling €4.9 billion of which €3 billion was drawn down. The average tenor of the projects was 11.67 years and the average remaining life was 8.81 years.

The Bank limits the total amount of Environmental Sustainability Bonds to no more than 70 per cent of the value of the GPP. This limit ensures that all of the proceeds of these bonds are directed towards supporting our GPP.

Considerations for inclusion

The Green Project Portfolio comprises investments in the following areas: energy efficiency, clean energy, water management, waste management, sustainable living, environmental services and sustainable public transport. Our Environment and Sustainability Department is responsible for reviewing and monitoring our committed projects on a quarterly basis, and selecting those that are eligible for inclusion in the GPP. This is done using objective and transparent criteria developed by our Environment and Sustainability, Banking, Treasury and Legal departments, based on strict exclusion and inclusion principles (see below).

The only projects included are those where at least 90 per cent of the financing is directed at environmental goals. The framework allows us to refinance existing projects, as well as to finance new commitments.

Examples of projects

  • Renewable energy projects such as solar photovoltaics, wind turbines, mini-hydro, geothermal and biomass.
  • The rehabilitation of power and heating plants and transmission/distribution facilities to reduce greenhouse gas (GHG) emissions.
  • The modernisation of industrial installations to reduce GHG emissions.
  • New technologies that result in significant reductions in total GHG emissions, such as smart distribution networks.
  • Fuel switching from carbon-intensive (coal, heating oil, oil shale) to less carbon-intensive fuels, such as natural gas.
  • Greater efficiency in mass transportation, such as investment in fuel efficiency (fleet replacement) or more energy-efficient infrastructure.
  • Methane capture from waste landfills and wastewater treatment plants.
  • Rehabilitation of municipal water/wastewater infrastructure to reduce water consumption and wastewater discharges.
  • Improvements in waste collection management (minimisation, collection, recycling, storage and disposal).
  • Energy efficiency investments in existing buildings (insulation, lighting, heating/cooling systems).
  • Investments to improve the efficiency of industrial water use.
  • Sustainable and stress-resilient agriculture, including investments in water-efficient irrigation.
  • Sustainable forest management, reforestation, watershed management, and the prevention of deforestation and soil erosion.

General bank and GPP exclusion criteria

Projects involving the following activities are not eligible for funding by the Bank:

  • Activities listed on the Exclusion List in Appendix 1 of the EBRD’s Environmental and Social Policy.
  • Nuclear energy generation.
  • Hard liquor production, defence-related activities, the tobacco industry and gambling facilities.

In addition, projects involving the following activities are not eligible for inclusion in the GPP:

  • Activities listed on the Exclusion List in Appendix 2 of the EBRD’s Environmental and Social Policy.
  • The construction of new large hydropower installations (as defined by the International Commission on Large Dams, ICOLD).
  • Biofuel production (pending the adoption of internationally recognised sustainability criteria).
  • Fossil fuel production and projects with significant consumption of fossil fuels (coal, heating oil, oil shale).
  • Projects requiring a derogation from the Environmental and Social Policy for not being able to meet the Bank’s Environmental and Social Performance Requirements within the term of the EBRD transaction.

Tracking the results of GPP projects

We monitor and evaluate the progress and outcomes of all EBRD-financed projects (including the GPP) and compare these with the benefits that were envisaged at the loan approval stage.

Regardless of whether they are subsequently allocated to the GPP, all of the projects we finance are subject to due diligence before approval to assess their compliance with our Environmental and Social Policy and Performance Requirements, and in order to draw up any action plans that may be necessary. Projects are monitored over the lifetime of the Bank’s investment through self-reporting by clients and, where appropriate, site visits by our specialists and consultants. More complex projects may also involve additional mechanisms such as regular reports from independent monitoring consultants or staged disbursements tied to the attainment of action plan milestones.

Further details on this aspect of portfolio monitoring in 2014 are provided in the Assurance section. Project-specific information (including environmental and social assessment information) is also publicly disclosed in accordance with our Public Information Policy. Browse our projects by country, sector and year and our Environmental and Social Impact Assessments.

Projects that we finance under our Sustainable Energy Initiative (SEI) are subject to additional detailed assessments during the development and approval stage, including determination of their potential for energy savings, renewable energy and CO2 emission reductions. This information is publicly reported in a number of ways, including individual project summary documents, the EBRD’s Annual Report and Sustainability Report, and the annual Joint MDB Report on Climate Finance.

These processes extend to the implementation stage of SEI projects, allowing the Bank to monitor and validate the energy savings, renewable energy output and CO2 emission reductions that are actually achieved. Our monitoring, reporting and verification systems for the SEI are subject to continuous improvement and we started rolling out a comprehensive programme of enhancements in 2014 (see the Project monitoring section).

We follow similar practices for our investments in other sectors, in line with the progress measurement and monitoring commitments set out in our relevant sector strategies. Physical indicators are tracked and disclosed on a project-by-project basis. Such indicators can include public transport usage and the number of people benefiting from water and wastewater projects.

Our independent Evaluation Department evaluates the performance of our completed projects and programmes against the relevant project objectives and publishes a summary of project outcomes in the EBRD’s Annual Report.

Further information on the evaluation of our projects is available here.

Read more about our socially responsible investments and how we evaluate our work.