Eastern Partnership and Central Asia Felicity II Program
The problem:
The transition to low-carbon development is critical for addressing climate change, particularly in the building sector, which is responsible for approximately 40% of global greenhouse gas (GHG) emissions. This issue is particularly pressing in Eastern Partnership and Central Asia countries, including Uzbekistan, Kazakhstan, and Ukraine, where cities and municipalities face significant challenges in financing and technical capacity for implementing climate action projects. In these regions, the existing infrastructure, particularly multi-apartment buildings (MFBs), is often outdated and energy inefficient, leading to high operational emissions from the consumption of electricity, heat, and primary energy. The barriers to financing the refurbishment and modernization of these buildings are numerous, including a complex institutional and legal framework, limited access to funding, and a lack of coordination among the various stakeholders involved in the renovation process. These challenges are further exacerbated by the limited experience and capacity of local governments, financial institutions, and building managers to develop and implement effective low-carbon projects. Addressing these issues is essential for reducing GHG emissions, enhancing energy efficiency, and ultimately contributing to the broader goals of climate change mitigation and sustainable urban development in the region.
The solution:
The "Eastern Partnership and Central Asia Felicity II Program" funded by the German Federal Ministry of Economic Affairs and Climate Action (BMWK) under the International Climate Initiative (IKI), was implemented with the goal of providing advisory services to cities and municipalities on financing energy for low-carbon development. InfoCapital Group (ICG) was tasked with developing comprehensive analytical documents and actionable strategies to support the refurbishment and modernization of multi-apartment buildings (MFBs) in Uzbekistan.
ICG’s approach began with a detailed stakeholder mapping exercise to identify all the relevant parties involved in the MFB renovation process, including local municipalities, ministries, management companies, homeowners' associations (HOAs), and financial institutions. This mapping included an analysis of the roles, legal status, functions, and interrelationships of these stakeholders, particularly in the context of obtaining financing for renovation projects.
The next phase involved a thorough analysis of the institutional and legal framework governing the management of MFBs in Uzbekistan. This included evaluating existing policies, regulations, and practices that impact the renovation and financing of these buildings, with a focus on identifying gaps and opportunities for improvement.
ICG also conducted an in-depth assessment of the current financing models used by the identified stakeholders, highlighting both successes and failures, as well as the associated risks. This analysis was crucial in understanding the financial stability and feasibility of potential investments in MFB thermal renovations.
Based on these findings, ICG developed two potential financing mechanisms that could facilitate the flow of funds from international and national institutions to homeowners and building managers. Each mechanism was accompanied by a SWOT analysis, providing a clear understanding of the strengths, weaknesses, opportunities, and threats associated with each option.
Through these efforts, ICG provided actionable insights and practical solutions to overcome the barriers to financing low-carbon projects in the building sector, contributing to the broader objectives of reducing GHG emissions and promoting sustainable urban development in Uzbekistan and the wider region.
Start date:
03/2024
Services:
Client:
German Development Cooperation (GIZ)
