Financial support for energy efficient housing in Armenia

The majority of Armenia’s housing stock is old and no longer meets current building standards. One in ten houses is dilapidated and in urgent need of renovation. In addition, these old buildings consume an enormous amount of energy. Space heating in particular contributes substantially to this problem. Construction measures on these buildings can reduce energy consumption by up to 50%. Crucially, a drastic increase in electricity and gas prices over the last ten years caused many households spending almost half of their income on heating in winter. Consequently, these constructions measures are particularly relevant for poorer households. It is estimated that 40% of the total energy saving potential in Armenia can be achieved in the building sector alone. This could result in 944,000 tons of CO2 emissions savings annually.

In 2014, the French Development Agency (AFD) launched the Social and Energy Efficiency Housing Finance Programme (SEEHFP). The programme aims to promote renovation of residential houses, focusing particularly on energy efficiency. It targets low and medium income households, especially in rural areas. Notably, fewer loans than expected were granted in the first few years. Therefore, a mid-term evaluation of the programme was carried out in 2018, to which adelphi also contributed. The evaluation identified a number of reasons for underperformance of the financing programme and generated recommendations for improvement measures. For the second phase of the technical assistance, AFD commissioned adelphi to support the National Mortgage Company (NMC) with the implementation of the recommended changes. The main objective of this project is to increase the disbursement of loans under SEEHFP and set up a sustainable financing landscape for energy efficiency in Armenia.

adelphi’s tasks for this assignment included the revising and development of new tools. Accordingly, adelphi prepared lists of standard energy efficiency measures and household tools that are eligible for support. Moreover, adelphi developed a web-based tool for checking eligibility, calculating energy savings and monitoring of financed projects. Marketing activities aimed to sensitise the general population to energy efficiency and to publicise the funding programme throughout the country. Furthermore, adelphi’s support comprised several trainings for partner banks and the set-up of new distribution channels.