iloubnan - Approval of first project financing under initiative for energy efficiency - June 04, 2011

The Lebanese Center for Energy Conservation (LCEC) indicated that the Central Bank of Lebanon has recently approved the first project in energy efficiency under the National Energy Efficiency and Renewable Energy Action (NEEREA). The package consists of a loan of $3m that carries an interest rate of 0.6% and has a repayment period of 3 years. Last year, the Central Bank launched NEEREA to support the financing of energy efficiency and renewable energy projects across Lebanon through commercial banks. 

The Central Bank said the initiative aims to have a positive impact on the purchasing power of Lebanese citizens and on the balance of payments, as Lebanon imports all of its energy needs. LCEC expects NEEREA will leverage more than $100m of investments in the coming five years. Also, the United Nations Development Program (UNDP) is cooperating with the Central Bank to provide a complete funding mechanism that allows organizations from different sectors to implement models of energy conservation for the first time in Lebanon.

Lebanon plans to raise the contribution of sustainable energy to 12% of its total energy demand by 2020. In parallel, the European Union has extended a grant of €11.9m to the Central Bank to subsidize interest rates and increase the repayment period of related projects, as well as €2.1m to the Kafalat Corporation to cover the risk of qualified projects during the repayment period.

Source: Lebanon This Week Bulletin, Byblos Bank