The Fund for Energy Efficiency in the Residential Sector, FEERM, will have a budget of at least RON 723 million over the next three years, money to be collected from energy sector companies, according to a Government Decision approved today on the Energy Efficiency Obligation Program. It will come into force from 2024 and implements the provisions of Law 139/2018 on energy efficiency and the European directive in this regard.

In addition to the amounts collected from economic operators, the annual budget of the EEERF will be matched by contributions from development partners and international financial organizations. The Residential Energy Efficiency Fund will be managed by the National Center for Sustainable Energy, CNED, the successor of the Energy Efficiency Agency.

The FEERM will provide non-reimbursable financing of up to 70% of the total expenditure necessary to carry out energy efficiency measures and make use of renewable energy sources in the residential sector, with the remainder to be provided by the contribution of tenants. The objective of the Fund is to renovate annually a heated area of at least 155 thousand m2 in residential blocks and 56 thousand m2 in detached houses and thus reduce the consumption of energy resources by at least 30% of the value of consumption under normalized conditions in the residential sector buildings benefiting from the financing programs.

"More than 70% of housing blocks in Moldova have low energy efficiency and people are paying for the energy losses in their bills. So instead of energy compensations, a necessary anti-crisis measure, we aim to reduce consumption by making homes more energy efficient. Calculations show that average renovation of buildings - thermal insulation of exterior walls, roof, basement, replacement of energy inefficient windows and doors with energy efficient ones, regulating thermal energy consumption and improving lighting system - can generate savings of about 45% of the energy consumed," said Energy Minister Victor Parlicov.

75% of FEERM resources will be earmarked for the modernization of residential blocks, and the criteria for their selection will be identified on the basis of the level of energy losses, energy vulnerability of consumers, availability of own contribution, etc. For 2024, 25 tenants' associations have already been selected through a competition, and energy audits will be carried out in the blocks managed by them, and the necessary energy efficiency measures will be implemented.

FEERM investments would generate annual savings of at least 2400 tons of oil equivalent or 11% of Moldova's commitment to reduce final energy consumption by 0.8% per year compared to the average annual final energy consumption over the last three years (2019-2021). In the period 2024-2026, cumulative energy savings of at least 14 400 tons of oil equivalent would be achieved, which will reduce the population's expenditure for energy resources consumed during this period by at least 120 million lei.

In addition to direct energy savings, the implementation of the program will also bring indirect benefits by reducing the cost of imported energy resources, increasing the level of comfort in rehabilitated buildings, improving the aesthetic appearance of buildings and increasing the value of buildings, increasing the disposable income of the population - these resources will be directed to other expenditures, goods and services - increasing economic activity in the construction, transport and services sectors, creating new jobs needed to implement energy efficiency measures, reducing CO2 emissions, improving living conditions and health of the population.

 55 energy sector companies will contribute to the 2024 energy efficiency obligation program, including 2 electricity distribution system operators, 19 natural gas distribution system operators, 26 importers of petroleum products (gasoline, diesel and liquefied gas) and 8 suppliers of heat for heating and/or domestic hot water and/or cooling. The value of energy efficiency obligations will not significantly influence the final tariffs and will be about 1 bani per kWh of electricity, 5 bani per m3 of natural gas, 10 and 11 bani per liter of gasoline and diesel respectively and 15 lei for a Gcal of thermal energy.