The European Bank for Reconstruction and Development (EBRD) is hoping that the investment of up to EUR15 billion in the next three years in sustainable energy projects will reduce the energy intensity of East European countries.

The bank has launched the second phase of its Sustainable Energy Initiative (SEI), in which it will invest EUR3-5 billion through 2011 in projects throughout the region. It says that the initiative will help countries hit by the global economic crisis prepare for green growth while improving energy efficiency.

“Reducing energy wastage in Eastern Europe and developing reliable new supplies of sustainable energy remain core to the EBRD’s future strategy,” said EBRD President Thomas Mirow. “Energy efficiency helps increase competitiveness. It is a key part of the transition process.”

The bank is expecting its own investment to attract further co-financing of up to EUR10 billion. It has already invested close to EUR3 billion under the SEI, which was launched in 2006 as a response to the rising challenge of climate change.

However the biggest issue in the region’s energy markets continues to be the legacy of cheap energy that made wastage an endemic problem. Countries in Eastern Europe remain the world’s most energy intensive economies when measured by carbon emissions per unit of GDP.

The potential for improvements in energy efficiency remains huge, says the EBRD, which estimates that phase one of the SEI resulted in a reduction in carbon emissions of 21 million tones per year. The energy savings achieved in phase one are estimated to be over 8 million tones of oil equivalent per annum – equivalent to three times the energy demand of Albania.

EBRD says that over the next three years it will build on the work done so far and target additional areas of investment, including energy efficiency in buildings and the transport sector, climate change mitigation in natural resources, stationary use of biomass and investments in climate change adaptation.

It will also develop new products to widen the range of financing instruments supporting sustainable energy investments.