Phare Energy Saving Fund was established by the European Commission and the Czech Ministry of Industry and Trade to enable financing small and medium—sized energy efficiency projects. EU Phare Programme for the Czech Republic (Energy Programme CZ 9303) provided € 4.5 Million as a credit line. A local commercial bank (CSOB) was selected for the Management of the Fund in 1997.

Supervisory functions of PHARE ESF are executed by the Ministry of Industry and Trade through the Monitoring Board.

 CSOB uses funds from the PHARE ESF to make loans for investments in energy savings projects in compliance with the appraisal, lending, administration, reporting and monitoring conditions set by the Contract. PHARE ESF is a revolving fund i.e. part of its principal repayments is used for new loans. ESF enables to provide loans for eligible energy efficiency projects at a reduced interest rate.

Each loan shall be composed of a blend of 33% Phare ESF resources and of the 67% bank’s own resources.

Eligible projects for ESF loans generate savings by reducing energy consumption, but also by reducing the costs of energy (using cheaper fuel), by lower operating and maintenance costs, etc. To qualify for assistance through the ESF, at least 40% of the total savings achieved by the implementation of the project must originate from reduced energy consumption. All projects must demonstrate energy savings on the demand side.

Conditions to reach the loan

Own client’s resources from 20% to 40% of the investment costs. At least 60% of the project costs need to be covered by the ESF.

Loan duration is from 4 up to 10 years with maximum grace period of 1 year. Possible max. size of the single project is 50 Mill. CZK.

Any company legally based in the Czech Republic, towns and municipalities and entities established by them, housing co—operatives, and other entities interested in financial loans that meet the standard rules of the Bank for being granted an investment credit for selected purposes incl. its security.

Target sectors (set by Phare objectives) are:

Industry

District Heating

Public Buildings (Schools, hospitals, Social Care, etc.)

Residential buildings

For further information the companies can contact firm bankers in CSOB regional branches in the Czech Republic.