NEEREA is a financing mechanism designed specifically to provide interest-free long-term loans to all eligible energy efficiency and renewable energy projects to new or existing facilities. the loan can be provided by all the commercial banks. once the application has been presented to the bank, it gets studied by LCEC to ensure all the technical and financial aspects are in compliance with the guideline set by LCEC. the main target of NEEREA is to expand the green economy in the country and support the development of the energy market in order to achieve the target set by the Lebanese Government of 12% of renewable energy in the total electricity mix by 2020.
Lebanese Center for Energy Conservation - LebanonLead applicant
The Lebanese Center for Energy Conservation (LCEC) is the national energy agency for Lebanon. LCEC is the main national reference on sustainable energy in Lebanon. It is the leading provider of energy efficiency and renewable energy programs to the public and private sectors in Lebanon. LCEC works on setting national strategies and action plans to be adopted by the Lebanese Government. Until date, LCEC has implemented numerous energy efficiency and renewable energy projects and initiatives that have resulted in many positive changes within the Lebanese society and economy.
European Union - BelgiumInitiative partner
support the government in development issues
Central Bank of Lebanon - LebanonInitiative partner
The Banque du Liban (BDL), was established on the 1st of august, 1963, and has been operational ever since 1st of April, 1964. It is a financially and administratively an autonomous public entity that has the right to issue the national currency, the Lebanese Pound. It controls and monitors bank liquidity by adjusting discount rates, intervening in the open market and determining credit facilities to banks and financial institutions. Other responsibilities include maintaining monetary stability, regulation of money transfers, and maintaining the soundness of the banking sector. LCEC is the technical assistance unit to the BDL in the evaluation of applications to the low-interest energy loans.
Lebanese Ministry of Energy and Water - LebanonInitiative partner
The Ministry for Energy and Water is the central public organization in charge of energy and water management and security issues in Lebanon. it implement projects, conducts studies and arranges awareness campaigns to properly allocate water and energy resources across the country.
Finance Your Energy Projects with 0% Interest Rate Over 14 Years” is the key advantages of NEEREA, the first green financing mechanism in the Arab Region, that finances solar, wind, biomass and hydro projects in addition to energy efficiency measures. NEEREA is supported by national subsidies and EU. The European Union is contributing to NEEREA by offering a grant over a share of the investment cost of maximum 5 million USD. This share is 15% for nonsubsidized sectors and 5% for subsidized sectors, a ceiling of 750,000 USD for the first and 250,000 USD for the latter. The most important aspect of NEEREA is that it links the commercial banks to private companies to ensure a sustainable development of the socio-economic framework.
In the Arab Region, NEEREA is only financing mechanism that is offered at an interest rate of 0.6% over 14 years including a grace period of 6 months to 4 years for all the sectors in Lebanon. The loan is eligible for solar, hydro and wind power, biomass, green buildings and all energy efficiency projects. Being directly supported by the Lebanese Government through the national subsidies, NEEREA’s objective is to ensure all the abundant natural resources that Lebanon is blessed with are being used effectively and efficiently in order to maximize environmental, social and economic benefits with minimal impacts such as a larger energy market, increase in sustainable job opportunities and a cleaner environment. In addition, NEEREA key of success is the integration of the different partners that necessitates the active involvement of the ministries, local stakeholders, energy companies, banks, partners and experts to ensure sustainability and continuity of work.
Lebanon, located at the east of the Mediterranean shore with has anarea of 10,452 m2. Its climate varies from 13.4 to 26.8 °C. Lebanon has an abundance of natural energy resources that are not being utilized for the country’s benefit. It has 300 sunny days, consistent wind patterns and 0.92 Kg of solid waste generate per capita. In addition, Lebanon imports energy to generate 1,500 MW of electricity and suffers from electricity shortages 30% of the day. Many of the Lebanese rivers are under the risk of depletion since the steep topography makes them fast moving, leading to erosion rather than water deposition. The GDP in 2014 is 1.5%, with the agriculture sector contributing to 5.1% to the GDP and the industrial 18.7%. The agricultural sector accounts for 12% of labor and the industrial for 26%. The Lebanese energy market is expected to have 150-300MW installed capacity of wind and solar energy and 1.05 million m2 installed are of solar water heaters by the end of 2014.
The total installation of solar water heaters, thanks to NEEREA, has put Lebanon on the list of world’s top 10 markets for solar water collectors in 2012. NEEREA has leveraged 190 million USD to 200 projects. 53% of the projects are solar PV, but green buildings account for 85% of the loans granted. The projects are distributed all over Lebanon, with Mount Lebanon and South sharing the highest number of the total amount of approved loans. The solar pumping system for a 30 Horsepower pump without batteries project that can irrigate within 17 Hectors and supply 345m³/day of water during summer and the “2 KWp Standalone System” project that is a PV-powered water pump for irrigation purposes for an area no electricity coverage are both NEEREA eligible. Both projects enhanced the lands’ fertility, reduced the cost of energy bill by up to 80% since the cost of diesel based water pumping is high (0.12$/m3). NEEREA also minimized the risk of fuel spill that can contaminate the land.
The beneficiaries of NEEREA are the local banks, end-users (farmers, food industries, etc,..) and the national economy. The bank gets more cash through releasing part of the Required Reserves at Central Bank of Lebanon (BDL). The user is provided with long-term interest free loans at 10% of the market rate and is offered with technical support with high quality technical and financial offers. NEEREA has helped the national economy by reducing the burden on the Lebanese institution and industries. It has also created sustainable job opportunities; 60 new energy companies recently entered the energy market with 30% more of job vacancies. NEEREA will allow the food sector to operate in an unpolluted environment with no noise or fumes that can harm the livestock, have better yields, spread awareness and social responsibility among the community about the importance of energy saving in food security.
NEEREA is the joint effort of several national and international players. A multi profile team composed of 10 people from LCEC, 300 from banks and 300 from companies are involved in NEEREA and in total 500 are in direct contact. The policy planners at MEW have developed the “Policy Paper for the Electricity sector” which includes 2 policies for RE and EE. LCEC has created the National Energy Efficiency Action Plan (NEEAP) for Lebanon 2011-2015 that has 14 EE and RE initiatives (including NEEREA) to reach the national objective. The LCEC team has also developed templates and guidelines for NEEREA and is the technical unit support of BDL. BDL, in cooperation with UNDP and EU has set circulars on which NEEREA is based. The MoF specifies the subsidies on interest rates. BDL is responsible for the overall financial management and sets the framework of operation. EU has granted NEEREA with 15 million Euros to be added to the NEEREA fund to encourage the SME’s in applying for NEEREA.
Lebanon has legal, political, financial, technical, administrative, social and sustainability barriers, like lack of adequate standards and norms, outdates laws and absence of commerciality and competitiveness, availability of funds or the lack of awareness about the available, highly subsidized fossil fuel prices, lack of infrastructure and relevant skilled labor forces, expertise and knowhow and lack of awareness to ensure sustainability. As the energy market expands, the good and bad will enter the market, so NEEREA job's is to ensure only the products of good quality enters the market.
Many of the barriers were faced and most of them are no more an obstacle to the energy market. LCEC in collaboration with its different partners organized workshops, trainings, seminars and awareness campaign in order to promote NEEREA, increase the know-how capacity and expand the society's limited knowledge about the loan and its benefits.
Thanks to NEEREA the natural resources like the sun, wind, water and biomass are better managed. NEEREA contributed to annual saving of around 1.5 GWh and more than 60 million USD and reduced CO2 emissions by 7,588 tons (1,184 tCO2 from PV projects and 6,404 tCO2 from LED projects). Moreover, 2 projects of PV powered water pumps in the agriculture sector that applied for NEEREA decreased the need of diesel powered generators and increased agricultural yield of the area with neutral environmental impacts. They achieved to reduce the high levels of noise and smoke already present in North Lebanon that are greatly affecting the air quality of the area. As such, the population is now exposed to less harmful chemicals; the livestock is in a safe environment and the ecosystem around the agricultural areas is less disturbed. The projects also reduced the risk of fuel spill that can pollute the land, livestock and groundwater. NEEREA also helped Lebanon to adapt to climate change effects.
The benefits of NEEREA are guaranteed as long as it is functional and properly followed and reviewed. Along the 190 million USD loans, 200 million USD have been paid cash for RE/EE projects. NEEREA is expected to exceed 250 million USD by end of 2014. The ceiling of NEEREA is around 400 million USD by the Government of Lebanon through BDL and the envelope will be renewed as long as it expands. The success of NEEREA has grabbed the attention of regional and international organizations. The League of Arab State is currently investigating to generate a financing mechanism similar to NEEREA to be applied in the Arab countries. Moreover, the International Finance Corporation (IFC), the World Bank and the EU are all analyzing the results and the success story of NEEREA in order to benefit from the Lebanese experience. In addition, the European Investment Bank (EIB) and the French Development Agency (AFD) have offered Lebanon a new credit line of 90 Million Euros to expand NEEREA.
All activities and studies carried out within the framework of NEEREA can be found in the form of report, brochure and summary notes as a hard copy (found at the LCEC offices) and soft copy (on LCEC official website: www.lcecp.org.lb).
Good-to-Knows are sent by email to more than 5,000 recipients on a weekly basis. It is an informative email constantly gives updates on the growth of energy market, the status of NEEREA loans, upcoming trainings, workshops, seminars on NEEREA, success stories of projects and future events.
Awareness and marketing campaigns have been done in the form of billboards, flyers, posters, TV commercials, newspaper articles and to familiarize the Lebanese society with the new concept and make them actively involved. LCEC provides trainings and seminars to all the technicians, bankers, investors and specialists to keep them informed about the new technologies, best practices and skills. LCEC is also going to promote NEEREA during the Beirut Energy Forum 2014.