OREANDA-NEWS. October 25, 2007. The EBRD is continuing to build on its pioneering work to develop sustainable sources of energy throughout the EBRD region with its first investment in a pan-regional renewable energy fund, reported the press-centre of EBRD.

The EBRD’s President Jean Lemierre signed an agreement today whereby the EBRD contributes ?25 million to the newly-established EnerCap Power Fund I L.P. which targets investments primarily in renewable energy, but also in energy efficiency, across central and eastern Europe.

The Bank’s ?25 million investment is a ?5 million increase above the amount initially pledged. Financing from other institutional investors brings total contributions to ?75 million in this first round of funding. The fund will be managed by EnerCap Capital Partners L.P. Incorporated, a Guernsey-based fund manager focused on private equity and renewable energy projects.

The main focus of the fund’s investments in renewable energy will be on wind projects. Investments are also expected to be made in biomass, bioethanol and other types of renewable energy generation.

Projects in energy efficiency, which have been the focus of most of the EBRD’s previous sustainable energy deals, will primarily target co-generation, waste-to-energy and carbon reduction investments.

EU accession, a global focus on climate change and energy security concerns have prompted many central and eastern European countries to establish or start developing regulatory frameworks supporting the growth of renewable energy.

At the same time, the EBRD is sharply increasing its investments in energy efficiency and in the development of renewable energy sources within the context of the Sustainable Energy Initiative (SEI), which was launched in May 2006.

The Initiative envisaged investment of up to ?1,5 billion in energy efficiency, renewables and clean energy projects over the next three years, but this target will be reached much more quickly than originally expected as demand for investment grows.

Energy efficiency is now seen more widely as playing the dual role of helping to ensure energy security while also boosting industrial competitiveness. Renewables are also gradually playing a greater role in the quest for energy security.

“Support for the renewable energy sector has to become a core part of the EBRD’s overall sustainable energy drive”, said Nandita Parshad, Director of the EBRD’s Power & Energy Utilities Team.

EBRD investments could also attract funding from other sources and so help the region meet its strategic renewable energy objectives, she added.

Previous EBRD investments in renewable energy have included a major syndicated loan to a hydro power complex in Russia, an investment in a renewable energy fund in Armenia and a credit line for energy efficiency and renewable energy in Bulgaria.