THE CHANGING look of many Slovak towns and cities shows that the trend towards thermal insulation of buildings is spreading all across Slovakia. Making living more comfortable and cheaper as well as being more environmentally-friendly are the main driving forces behind exchange of old windows for new energy-efficient ones, covering exterior walls of buildings with thermal insulation, and other energy-saving improvements. But a lack of funds to finance such projects remains the biggest obstacle to even greater improvement in the thermal qualities of older, and sometimes obsolete, residential properties in Slovakia.
“I estimate that so far about 25 percent of all blocks of flats and family houses have been insulated,” Anton Novotný, the executive director of the Association for Insulation of Buildings, a civic association, told The Slovak Spectator.
He sees the government’s Thermal Insulation Programme (TIP) as the most comprehensive so far but he would like to see a long-term programme with a stable inflow of funds and a guarantee of stability and transparency for owners of buildings who wish to make this kind of investment.
The Slovak cabinet allocated €71 million last year to TIP to improve the energy efficiency of buildings. Owners of blocks of flats and family houses were able to apply for 15-year, zero-interest loans to finance a comprehensive insulation project for their real estate. Only buildings constructed before 1989 and projects which would secure a 20 percent or more reduction in heating requirements were eligible for the TIP loans.
The programme was adopted with the primary goal of improving energy efficiency of buildings and reducing housing costs for citizens. Zdenka Jurčáková, the president of the Union of Associations of Apartments’ Owners, told the Sme daily that Slovakia requires five-times more energy for heating than western countries do. The programme was also part of an anti-crisis package adopted with the goal of creating additional jobs in the construction sector. The Economy Ministry estimates that 8,000 jobs were created.
The Ministry of Construction and Regional Development provided the loans via the State Housing Development Fund (ŠFRB). The fund started the programme in July 2009 and by November had to stop accepting new applications because of a lack of funds. In total 14,776 housing units – either in apartment buildings or family houses – received loans to cover the costs of insulation. The programme funded 347 applications but another 100 applications were returned due to the lack of funds, the SITA newswire wrote.
“The cabinet’s insulation programme was successfully used up,” Linda Vaškovičová from the Ministry of Construction and Regional Development told The Slovak Spectator. “With regards to a possible increase in funds within this programme, there are no such plans for now.”
Given the very poor condition of many apartment buildings and family houses, Pavol Giller, the head of the section for economics of housing at the Ministry of Construction and Regional Development, estimated last May for The Slovak Spectator that about €10.5 billion is necessary just for thermal insulation of apartments and houses that require it.
Apart from funds available from the State Housing Development Fund, which also provides housing reconstruction loans within its other programmes, owners of apartments can apply for loans from commercial and specialised banks for these types of thermal insulation projects. Experts say that insulation projects should be understood as an investment that will have a return in the form of lower heating bills, with estimates of savings in the heating of buildings ranging from 45 to 58 percent, depending on when the building was constructed.
Novotný said that so far owners have used more of their own funds or funds borrowed from commercial banks and housing construction savings banks for insulation projects than funds from the government, for example from ŠFRB.
EBRD offers new credit line
On March 2 the European Bank for Reconstruction and Development (EBRD) offered new funds to promote sustainable energy investments in Slovakia. The EBRD is increasing its support for sustainable energy projects in Slovakia with a new €90 million funding commitment under the existing Slovakia Sustainable Energy Finance Facility (SLOVSEFF) to ensure continuous implementation of energy efficiency projects as well as to support small renewable energy projects, EBRD wrote in its press release.
“Through this project the EBRD is reinforcing its commitment to promote sustainable use of energy, helping the Slovak economy to reduce its energy intensity and to mitigate rising energy prices”, said Brigita Schmögnerová, EBRD Vice President in the press release.
SLOVSEFF was launched in 2007 when EBRD allocated €60 million to encourage Slovak enterprises and housing associations to make better use of energy resources. The funds were distributed via four local partner banks.
The new €90 million will be available to the four participating banks as well as to new partner institutions in Slovakia for specific kinds of loans: to finance greater energy-efficiency and renewable energy projects in the industrial and residential sectors. Owners of apartments or housing associations can apply for a loan using these EBRD funds to get their buildings insulated. Borrowers undertaking sustainable energy investments will be reimbursed by up to 15 percent of the amount of the loan upon the completion of the project.
