financing of energy efficiency investments is a critical issue
that needs to be addressed by policy makers in charge of energy,
environment and industrial sector development. This publication
presents selected materials that may be informative and useful
for this policy development and decision making process.
Like in other parts of the global economy, investors and industry
developers in the Asian and Pacific region are increasingly aware
of the growing need for environmental protection. At the same
time, however, intensifying national and international competition
also compels industrial sector managers to minimize production
and capital costs. A wealth of studies have identified the many
technical options for making manufacturing processes more energy
or resource efficient. However, options for improving energy efficiency
are often ignored, in particular in those situations in which
considerable additional first costs have to be incurred. In the
Asian and Pacific region, the recent unprecedented financial and
economic crisis has particularly aggravated this situation. Energy
efficiency investment options are often perceived as "non-essential"
and are postponed or accorded "low priority" if no sufficient
external support is provided.
Investments in energy efficiency often require higher first costs,
but result in lower operational costs, lower energy costs and
positive external environmental effects. However, without financial
incentives many potential energy efficiency improvements remain
unrealized. Hence, the development of an effective policy framework
promoting investments in energy efficiency will likely remain
a challenging task during the years ahead.
During 1999 and 2000, the ESCAP secretariat organized two seminars
on the subject of promotion of energy efficiency in industry and
financing of related public and private sector investments. The
first regional seminar was held in Bangkok, Thailand, 30 November
- 02 December, 1999. A follow-up sub-regional workshop on the
same subject was held in Almaty, Kazakhstan, 11-12 May 2000. The
materials presented in this publication derive from papers and
presentations prepared for and discussed at these events.
This publication is divided into five parts: Part One presents
an introductory overview to the policy issues involved in promoting
investments in energy efficiency and productivity development
in industry. Part Two gives an overview on financing options for
investors. Part Three describes policies and experiences of three
selected industrialized and newly industrializing countries which
have emphasized active energy efficiency investment prevention
to counter the growing energy import dependencies of their respective
economies. Three individual resource persons from Japan, Republic
of Korea and Thailand have contributed discussion papers. Part Four
discusses the particular difficulties faced by the countries with
economies in transition in the promotion of investments for energy
efficiency. Finally, Part Five presents an outlook to international
cooperation in financing energy efficiency investments, which
is expected to gain additional scope as international consensus
develops on regional or global cooperation to counter the threats
of climate change.
The introductory overview presented in Part One was compiled by
Ralph D. Wahnschafft, Energy Security Section, ESCAP. Part Five
was also prepared by the Secretariat which the assistance of Ga-Hyeong
Hur, Seoul National University, Republic of Korea. The papers
presented in Parts Two, Three and Four were authored by invited
experts and resource persons and thus reflect individual views
and not necessarily those of the Secretariat. The manuscript for
this publication was prepared during the first half of 2000.
Several experts have contributed to this publication as consultants
or resource persons. These experts include Krishna Mohan Rao (M.K.
Raju Consultants, Chennai, India), Ayako Sato (Energy Conservation
Center of Japan, Tokyo, Japan), Kwan-Hong Shin (Korea Energy Management
Corporation KEMCO, Republic of Korea), Pongpisit Viseshakul (Energy
Division, National Energy Policy Office, Bangkok, Thailand).
Following experts from countries in Central Asia have also contributed
materials included in this publication: K. Suleymanov (Ministry
of Power, Industry and Trade, Kazakhstan); B. Nurdjanov (Kazakhstan
Energy Association, Almaty, Kazakhstan); V.V. Stoyak (Almaty Institute
of Power Engineering and Communications, Almaty, Kazakhstan);
A. Tyumenbaev 9State Energy Agency, Bishkek, Kyrgyzstan); D. Mansurov
(Tadjik Power Company, Dushanbe, Tadjikistan); H. Abdullaev (Ministry
of Power Engineering and Electrification, Tashkent, Uzbekistan);
and T. Nasyrov (Energy Center of Uzbekistan, Tashkent, Uzbekistan).
ESCAP wishes to acknowledge with appreciation these contributions.
In the preparation of this publication, the secretariat has greatly
benefited from voluntary extra-budgetary contribution received
from the Government of Japan for operational activities to promote
energy efficiency during fiscal 1999 and 2000. The generous technical
and financial support provided to the secretariat is herewith