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Romania: CEB approves € 47 million for investments in energy efficiency, social housing and services

24 March 2020

PARIS – The Council of Europe Development Bank (CEB) has approved a € 47 million loan to support a set of priority social and environmental investments in Bucharest, such as energy efficiency improvements to residential and public education buildings, the construction of new social housing units, and enhanced social assistance facilities for vulnerable people.

The project concerns “Sector 6” of Bucharest, the capital’s second largest district and home to about 400 000 people or 20% of the city’s total population. About 10% of inhabitants in this area are in need of social assistance. Most of the residential and public buildings in the district date back to 1950-1990, have a low energy efficiency index and a negative impact on the environment.

The CEB is financing energy efficiency improvements in more than 100 multi-family residential buildings and in thirteen state schools and kindergarten buildings. The CEB funds will also contribute to the construction and retrofitting of eight after-school facilities and kindergartens to high environmental standards, which will turn the new developments into ‘nearly-zero-energy buildings’.

In addition, the loan provided by the CEB will enable the construction of 246 social housing units comprising apartments of varying sizes, highly energy-efficient, and built to modern standards. These will provide affordable housing to low-income inhabitants of Bucharest’s 6th district and reduce energy consumption by about 40%.

The CEB is also financing a food bank and a social canteen which will deliver much-needed social services and basic food to vulnerable groups living in Sector 6, such as elderly persons, single mothers with children, ethnic Roma, and unemployed or disabled persons. It is estimated that some 18 000 vulnerable persons will benefit from these services on an annual basis.

CEB Governor Rolf Wenzel said: “The CEB is well aware of the challenges faced by local authorities when it comes to securing financing for their social policies. The CEB has worked on further adapting its financing instruments, particularly under its new Development Plan 2020-2022, in order to provide sub-national governments with the resources required so they can implement their social investment plans. We are pleased to support Bucharest’s Sector 6 in addressing key social inequalities and creating better opportunities for socio-economic growth while contributing to Romania’s environmental sustainability commitments.”

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[Notes]
[1] Romania joined the CEB in March 1996. To date, the Bank has provided close to € 2 billion in financing for a wide range of social investments, from historical and cultural heritage, social housing, education, and judiciary facilities to support for MSMEs and in response to natural disasters. In addition, Romania is among the ten largest recipients of grant funding (interest rate subsidies, loan guarantees, and grants proper) from the Bank’s trust accounts, with about € 20 million in total and  recent support mobilised for migrant reception facilities, Roma education, and flood protection facilities.

[2] The designs for the Near Zero Energy Buildings have been prepared with technical assistance from the EU-funded European Local Energy Assistance (ELENA) facility. This project also benefits from financing provided by the European Investment Bank (EIB).

Set up in 1956, the CEB (Council of Europe Development Bank) has 41 member states. Twenty-two Central, Eastern and South Eastern European countries, forming the Bank's target countries, are listed among the member states. As a major instrument of the policy of solidarity in Europe, the Bank finances social projects by making available resources raised in conditions reflecting the quality of its rating (AA+ with Fitch Ratings, outlook positive, AAA with Standard & Poor's, outlook stable and Aa1 with Moody's, outlook stable). It thus grants loans to its member states, and to financial institutions and local authorities in its member states for the financing of projects in the social sector, in accordance with its Articles of Agreement.