The Eastern Europe Energy Efficiency and Environment Partnership (E5P) is a €243 million multi-donor and multi-implementing agency fund initiated during the Swedish Presidency of the European Union in 2009 to encourage municipal investments in energy efficiency and environmental projects in the Eastern Partnership region. Initially active in Ukraine, in 2014 the fund formally extended its activities to Armenia, Georgia and Moldova, Belarus in 2017, and Azerbaijan in 2019.

The E5P merges financial contributions from the European Union and a group of 24 nations, including countries which are benefiting from the fund. The EU is the largest contributor to the fund and the Chair of the Assembly of Contributors, the main governing body for E5P. The EBRD acts as the fund manager of E5P providing administrative support to manage the fund on behalf of all the stakeholders.

How the Fund works:

The E5P investment grants are blended with loans from the participating Implementing Agencies to address market barriers and support environmental projects with high developmental impact, traditionally in the municipal sector. The Implementing Agencies are: the Council of Europe Development Bank (CEB), European Bank for Reconstruction and Development (EBRD), European Investment Bank (EIB), Kreditanstalt für Wiederaufbau (KfW), Nordic Environment Finance Corporation (NEFCO), Nordic Investment Bank (NIB) and World Bank Group (WBG).

Eligible sectors:

Hitherto, the Fund has focused on the municipal sector, supporting projects in district heating, solid waste management, water and wastewater treatment, energy efficiency in buildings (schools, kindergartens, hospitals as well as residential buildings), street lighting and urban transport. Additionally, projects in the infrastructure and energy sectors such as renewable energy generation (including biomass), interconnection and resource efficiency with public and private sector clients are potentially eligible.

The Fund focuses on improving lives and systemic changes, thus prioritises projects with a strong policy engagement component. Proposals are jointly developed by the recipient country and Implementing Agencies, in line with the country-specific priorities.

Through its investments, the E5P aims to address multiple Sustainable Development Goals, from sustainable cities to clean water and sanitation to climate action and others. The E5P projects are expected to result in CO2 savings equivalent to almost 1 million tonnes as well as multiple other benefits in terms of urban air pollution reduction, waste and waste water reduction.

Through the projects, the fund aims to:

- Reduce CO2 emissions and other harmful greenhouse gases.
- Improve energy efficiency.
- Provide support to policy dialogue and regulatory reform.