Business news

MINSK, 15 December (BelTA) – Belarus and the World Bank are considering the available options for the sake of providing lending support to projects for the thermal modernization of buildings and structures in the country. The relevant ideas were discussed during the seminar on expanding the scale of measures meant to improve energy effectiveness of residential and public buildings in Belarus, the press service of the Belarusian Housing and Utilities Ministry told BelTA. The seminar gathered representatives of the Housing and Utilities Ministry, foreign experts, and Young Chul Kim, World Bank Country Manager for Belarus.

During the seminar Young Chul Kim mentioned the importance of energy effectiveness measures. In his opinion, the reform of the housing and utilities industry will help free up the available potential. About 80% of the residential buildings in Belarus were built before 1996 when saving resources was a low priority. Practice indicates that the buildings that have gone through the thermal renovation procedure boast energy effectiveness twice as high as that of regular buildings. The latter also consume 30-120% more heating energy to achieve the same level of comfort in comparison with buildings compliant with the year 2010 construction standards. According to Young Chul Kim, international capital can be used for housing renovation in Belarus only if resources of the state budget, private investments, and investments of individual households are pooled together.

Belarusian Deputy Housing and Utilities Minister Anatoly Shagun mentioned that the World Bank provides considerable aid to the development of the Belarusian housing and utilities industry. About $350 million has been spent on modernizing various installations. In turn, Deputy Housing and Utilities Minister Gennady Trubilo noted that the thermal renovation procedure is no longer part of the structural repair process. If utility rates are increased, Belarusians will have to find ways to save energy in order to live comfortably. Smart loans can be a way out of the situation, he said.

Feng Liu, a senior energy industry specialist at the World Bank, presented the credit schemes that Belarus can work with while relying on the experience of the countries where these schemes are already in use. He remarked that certain measures have already been shortlisted. Belarusian end consumers are invited to regulate heating consumption. The measure is expected to save 10-15% of the costs. Individual regulation in addition to window replacement will save 20%. A thermal modernization procedure that will make the outside contour of the building more frost-resistant will save 40%.

Loans with state support were mentioned as the first lending option. Municipal government agencies can borrow money. They will be responsible for selecting the buildings for thermal modernization.

Another scheme does not involve the government directly and is used in Lithuania among other countries. The government just has to enable access to cheap loans. Then condominiums and providers of housing and utilities services will act as investors while residents will pay out the loans taken by the investors.

Another scheme envisages no state involvement whatsoever. It is used by Poland among other countries. It relies on market mechanisms and provides for accumulating money in a fund for financing the modernization of residential buildings. The initial capital can be provided by the state budget and/or a loan granted by the international financial institution. The fund is supposed to directly borrow money from commercial banks for the sake of thermal modernization of buildings by subsidizing some of the costs.

Information about potential energy savings and the investment costs of the different modernization schemes was also presented during the seminar. If the utility rates are raised to cover 100% of the costs, the money will be recouped within 15 years.