Today companies around the world are leading the way in green initiatives, adopting a wide range of admirable, in-house sustainability practices such as ambitious recycling programs and the installation of low-energy systems, in addition to financing external green projects of which they want to be a part. In many cases, they are motivated by cost savings and of course, a desire to protect our planet by reducing their carbon footprint. In Lebanon today, many banks and leading companies are actively engaged in green corporate social responsibility programs.
Here we look at Banque Du Liban
What are the energy projects BDL is engaged in? List them in order of importance and give a brief explanation of each.
At the 2009 Copenhagen Climate Summit, Lebanon voluntarily pledged to increase its renewable energy share by 12% by 2020, which means an additional production of 804 MW of clean energy. This voluntary commitment was anchored within the “Policy Paper for the Electricity Sector” prepared by the Ministry of Energy and Water (MEW) and officially adopted by the Council of Ministers in June 2010. The action steps include the adoption of the energy conservation law, the launch of the National Plan for Energy Conservation (later on named National Energy Efficiency Action Plan – NEEAP) and the launching of a national financing mechanism (the National Energy Efficiency and Renewable Energy Action – NEEREA).
Based on this policy background, the actual creation of NEEREA took place on 25 November 2010 when the Central Bank of Lebanon (BDL) issued circular No. 236. NEEREA is a national financing mechanism initiated by the Central Bank of Lebanon (BDL) in collaboration with the Ministry of Energy and Water, the Ministry of Finance, UNDP, the European Union (EU), and the Lebanese Center for Energy Conservation (LCEC). This initiative aims at financing green activities through the following mechanism: long-term financing (up to 14 years) of energy efficiency, renewable energy, and green buildings projects through banks with interest ranging between 0 and 1%. In return, banks will be benefiting from exemptions from mandatory reserve requirements at BDL.
NEEREA includes many national and international players. As the national financing institution, the Central Bank of Lebanon (BDL) sets the framework of operation and offers benefits to banks. The Ministry of Energy and Water sets the strategic guidance and priority in energy efficiency and renewable energy. The Ministry of Finance defines the subsidies on interest rates for the different sectors of the economy. The European Union has offered the BDL 12 million Euros to encourage SMEs in applying for NEEREA. The United Nations Development Program partnered with BDL to offer technical support, training, marketing, and awareness raising activities, and the Lebanese Center for Energy Conservation (LCEC) is the technical consultant to BDL, reviewing loan applications, and setting quality control criteria.
NEEREA is dedicated to supporting the financing of new and existing energy projects including energy efficiency (EE) and renewable energy (RE) implementations. It offers soft loans to eligible and feasible projects. NEEREA allows private sector entities (individuals, SMEs, or corporate bodies) to apply for subsidized loans for any type of EE and/or RE projects.
Private facilities such as households, residential buildings, hospitals, hotels, commercial offices, malls, industrial plants, farms (subsidized and non- subsidized sectors) and existing facilities such as banks, industries, consultants, and new or under construction facilities are all qualified to the NEEREA loans. The beneficiaries of NEEREA are divided into 3 categories: the local banks, the end-user and the national economy. The bank gets more cash through releasing part of the Required Reserves
at the Central Bank, and this enhances the green vision of the bank and promotes corporate social responsibility (CSR). The user is provided with long- term interest free loans and is offered technical support with a guarantee to have high quality technical and financial propositions. NEEREA benefits the national economy by reducing the burden on the Lebanese institutions and industries. It has promoted the renewable energy industry and marketing in Lebanon and has created numerous jobs opportunities for engineers, energy expertise, accountants, and researchers. Through financing energy efficiency and renewable energy projects, NEEREA can reduce the burden on the energy sector since less energy will be drawn. It will also satisfy the growing energy demand of the Lebanese citizens. At the same time, this will favor decreasing greenhouse gas emissions and consequently contribute positively to the welfare of the environment and the society.
The purpose behind NEEREA is to encourage the implementation of the actions needed to achieve our national objective and to ensure the sustainability of the energy efficiency and renewable energy sectors in Lebanon. NEEREA strives to guarantee an energy secured society and it’s facilitating the transition towards a low-carbon green economy. The latter serves to achieve the national objective of 12% of renewable energy share.
What is BDL doing in-house to limit and reduce its ecological footprint?
The Green Roof is a project that BDL pioneered, with the aim of promoting green spaces in urban areas; taking into account all the benefits that emanate
from it. The Central Bank dedicated an area of 834 square meters in its main headquarters in Hamra, and launched its very own “Green Roof” on the 30th of June 2014, in cooperation with UNDP’s CEDRO project. By launching such an initiative, the BDL hopes that it will inspire other public and private institutions to follow in its footsteps, and promote more green spaces.
Another project that BDL is keen on maintaining is its own recycling scheme. It has placed at the level of each department dedicated recycled bins. By doing so, the Central Bank strives to instill a green culture in its staff, encouraging them to be more vigilant vis-à-vis recycling at the source at the workplace and at home. On another hand, it hopes to act, yet again, as a model for other public and private institutions; and to lead by example for any institution willing to take the recycling scheme as part of its green loans. Moreover, the Central Bank has also started with the initiative of replacing its current lighting system with LED lights, in order to reduce ecological footprints as much as possible, and to reduce its energy bill.
Tell us about the eco loan (the subsidized environmental loans and the financing unit of green energy). Explain the type of loans and value of loans to date, what type of customers etc.
The BDL has been keen, over the past few years, on fostering sustainable growth. It has, in this regard, launched a series of initiatives and stimulus packages to boost private sector investments in vital sectors; with the aim of contributing to economic, social, and environmental development and ultimately more job creation.
Through its loan incentive packages, the BDL has been promoting environmentally friendly initiatives. Whether promoting energy related projects such as energy saving, renewable energy, and green buildings, or non- energy related projects such as pollution abatement, solid waste and wastewater treatment, recycling, eco-tourism, and organic farming among others, the BDL has been striving to turn the Lebanese economy greener.
One of those initiatives is the National Energy Efficiency and Renewable Energy Action NEEREA, a national financing mechanism that the BDL developed in 2010 in collaboration with the UNDP, EU, and the Ministries of Finance, Energy and Environment.
In 2013, the BDL pushed the environmental agenda even further by including environmentally friendly loans within its first stimulus package. This stimulus consisted of providing low cost incentives to the private sector through banks to encourage investments in vital economic sectors such as tourism, agriculture, industry, IT, housing, education, and environment, including NEEREA. Given its concrete benefits on the national economy, the package has been renewed for three consecutive years. Today, the BDL in collaboration with the Ministry of Environment, is striving to support the green economy further, and thus foster sustainable growth, by providing more financial mechanisms to the environment sector, as it did with the energy sector through NEEREA. The BDL is also encouraging pollution abatement projects, in collaboration with the Ministry of Environment, through bank loans with very low cost (around zero percent), and for periods ranging between 7 and 10 years.
Type and value of loans that benefit from BDL environmentally friendly initiatives:
– Number of projects: 23
– Total loan amount: $ 6,780,364
– Type of loans: Solar PV for irrigation, Biomass gasification, solar water pump, LED lighting for farm.
– Number of projects: 52
– Total loan amount: $ 114,344,561
– Type of loans: LED lighting, Hybrid three phase Solar Photovoltaic System, EE-RE solutions, on-grid solar PV system, Semi-hermetic Reciprocating Compressors, PV Diesel Grid Connected System, LEED-silver & gold.
– Beneficiaries: malls, pharmacies, commercial centers, gas stations etc…
– Number of projects: 18
– Total loan amount: $ 50,131,719
– Type of loans: EE-RE solutions, Solar PV system & LED lights & isolation, On-Grid Solar PV System, LEED-silver & gold.
– Beneficiaries: universities & schools.
– Number of projects: 9
– Total loan amount: $ 13,721,965
– Type of loans: On-Grid Solar PV System, EE-RE solutions, LEED-silver & gold.
– Beneficiaries: hospitals & health centers.
– Number of projects: 39
– Total loan amount: $ 55,374,230
– Type of loans: On-grid Solar PV System, Absorption Chiller Solution, Biogreenpyrolsis plan, LED Applications, PV-diesel Grid Connected System.
6) Non-profit organization
– Number of projects: 13
– Total loan amount: $ 18,147,146
– Type of loans: Solar PV System- Thermal, Biomass Heating and On-Grid PV, LED lights, LEED-silver & gold.
– Beneficiaries: sanctuary, orphan welfare, congregation.
– Number of projects: 74
– Total loan amount: $ 104,134,365
– Type of loans: Grid Interactive Solar System, LED lights, Boiler, double glazing, Off-grid PV system, LEED- silver & gold.
– Number of projects: 18
– Total loan amount: $ 24,175,424
– Type of loans: EE-RE solutions, Solar Water Heating System, LED- lights.
– Beneficiaries: hotels, restaurants.
Total number of projects: 246 Total loan amount: $ 386,809,774