Energy intensity in the EBRD countries is clearly a lot worse. You can also see that in some countries that rely more heavily on coal, there is also a problem with carbon intensity. The scope for improvement is enormous, so the opportunity is compelling. What’s the catch?

Well, as always, things are not so straightforward in practice. First, we give a brief review of the main countries and regions in which we work.



The EBRD was established in 1991 when communism was crumbling in central and eastern Europe, and when the former Soviet countries needed support to nurture a new private sector in a democratic environment. Today the EBRD uses the tools of investment to help build market economies and democracies in 27 countries from central Europe to central Asia.

The EBRD is the largest single investor in the region and mobilizes significant foreign direct investment beyond its own financing. It is owned by 60 countries and two intergovernmental institutions. Despite its public sector shareholders, it invests mainly in private enterprises, usually together with commercial partners.

It provides project financing for banks, industries and businesses, for both new ventures and investments in existing companies. It also works with publicly owned companies to support privatization, restructuring of state-owned firms and improvement of municipal services. The Bank uses its close relationship with governments in the region to promote policies that will bolster the business environment. You can find out more about the Bank at

Starting from the west we have the eight countries which are now members of the EU: Latvia, Estonia, Lithuania, Poland, the Czech Republic, Slovakia and Slovenia. The use of district heating and cogeneration is just as widespread in these countries as in any of their former Soviet neighbours. With the benefit of EU membership, these countries are also working under familiar market rules. These countries have made the most progress towards improving energy efficiency, but they still lag a long way behind the older EU members.

Next are the Balkan countries of the former Yugoslavia (Slovenia, Serbia- Montenegro, Croatia, FYR Macedonia, Bosnia and Herzegovina), plus Albania, Moldova, Romania and Bulgaria. The countries of the former Yugoslavia are modernizing quickly and increasingly turning to the EU as the model for their commercial activities. Bulgaria and Romania are scheduled to join the EU in 2007. Albania and Moldova are less well advanced in the transition process.

EU policy initiatives will help cogeneration

The new Cogeneration Directive is likely to boost the growth of DG in Europe
© European Community, 2005

The new Cogeneration Directive, due to come in to force in 2006, is expected to boost Europe’s cogeneration market. The Directive is also finding support in other measures – on emissions trading, gas and electricity markets, energy performance of buildings and energy efficiency. Peter Löffler is optimistic.

Recent years have seen the European Union putting in place a considerable number of regulations and policies on energy and environment, which are expected to have a pronounced impact on the development of cogeneration in Europe. At first glance, the most important piece of legislation is the European Cogeneration Directive, adopted in February 2004, but many other Community measures have been created in the recent past, which set important framework conditions for cogeneration.

So does this mean that the time has come for EU policy makers to have a break and to watch their counterparts at the Member State level take on the challenge of translating EU Directives into national legislation, and putting policy into practice? Not so. COGEN Europe, the European Association for the Promotion of Cogeneration, believes that 2005 is going to be just as busy as last year as far as the European level is concerned: it will be marked by implementation efforts on the one hand and by exciting new policy initiatives on the other. Indeed, implementing the huge amount of recent European legislation in the energy and environment fields is not only the responsibility of Member State governments, but it keeps the European players busy as well. Considerable efforts are being dedicated to assisting Member States in putting EU policy and regulation into practice.

A key issue is the definition of Europe-wide harmonized reference values for cogeneration

Undoubtedly, a key issue is the definition of Europe-wide harmonized reference values for cogeneration under the EU Cogeneration Directive. They should help to determine whether cogeneration installations are ‘high-efficiency’ or not, by comparing their performance with benchmark efficiencies for the separate production of heat in boilers and power in thermal power plants. A Regulatory Committee, composed of EU Member State representatives, is responsible for taking the relevant decisions, but the European Commission and stakeholders, such as COGEN Europe, will also play a role.