National Bank of Romania is open to support "Green mortgage" program

Romania Green Building Council in partnership with WWF-Romania and Ozone Homes organized a workshop that discussed the implementation process  of a ”Green Mortgage” program in Romania. The workshop provided information on the legislative framework required to implement such a program encouraging the construction of energy efficient buildings and with low environmental impact. The program is an opportunity for Romania to take the lead in the region by introducing an innovative real estate financial tool for reducing energy costs, improving energy security policies and accelerating the adoption of better construction technologies, materials and techniques.

This pilot project aims to create a controlled environment through a consortium between a bank, a developer and an energy auditor to implement the concept of energy efficient mortgages and demonstrate its financial, social and environmental benefits.

The introduction of such a financial product fits very good from a time perspective, in the context of the current legislative regulations for buildings at the European Union level. Therefore, a successful pilot project of this kind will be easily replicated at a national scale upon the upcoming implementation of these regulations.

The National Bank of Romania attended the workshop to request an official position from the key financial institutions (banks, academics, public institutions) regarding the existing Romanian financial mechanisms that support a sustainable built environment  and expressed interest and openess  to rethink the legal framework of the National Bank in order to allow for such a program to be implemented.

"If the simulations sent by the initiators of this program and the assessments made by experts will demonstrate a reduced maintenance cost that will also cover the extra financial investment that is needed to make the energy efficient improvements”, i will propose to my colleagues to rethink the legal regulations of the Central Bank”, said Bogdan Olteanu, Vicegovernor of National Bank of Romania (BNR).

Andrew Prelea, CEO Ozone Homes, has proven the applicability of such banking product emphasizing the cost reductions achieved within the Avalon Residence complex using innovative technologies and solutions with low environmental impact. ”The study on the utility cost reduction was achieved during the winter season taking into account standard climatic factors, but in extreme weather conditions similar to those observed in the winter of 2011 - 2012, we observed higher savings due to lower energy consumption rates”, said Andrew Prelea, CEO Ozone Homes.
”A banking product as < green mortgage > is a big step on a medium to long term developing process through the facilitation of more affordable loans that will conduct to better life conditions. At the same time, we must convince public authorities and government representatives to invest precisely in areas where we can generate more jobs, more green policies in order to obtain a more energy efficient built environment”, said Csibi Magor, Country Manager WWF Romania.

 Upcoming changes: The European Commission amended the Energy Performance in Buildings Directive which requires higher energy performance & qualification for buildings. In the current market conditions it is very hard to obtain the A ++ level energy qualification for new buildings and to bring the existing stock to a A level energy qualification. The next decade will require buildings to be nearly  net zero energy buildings; the Romania Green Building Council is promoting a fast implementation of this Directive. As energy prices are increasing and the price of energy efficient technologies will be shrinking, the need for a green mortgages will be higher. Finally, energy efficient buildings will come to prevail the market and all mortgages will become green mortgages. Encouraging users to install meters to assess their energy consumption will support a more sustainable economic behavior”, said Steven Borncamp, President of the Romania Green Building Council.

As stated above, an energy efficient house reduces the utilities bill allowing households to save extra cash that can be further applied to paying back a larger loan installment. An energy efficient mortgage covers the extra financial investment that is needed to make the energy efficient improvements upfront, recognizing that the money will be recovered through the savings that occur over the lifetime of the building. This could imply larger loan amounts, increased debt-to-income ratios (a larger amount of the borrower’s income can be applied to the monthly debt installments) or other financial incentives offered. Calculations made ​​by Ozone Homes demonstrate the financial feasibility of such a bank product.

RoGBC's partners in this initiative:

WWF- Romania (www.wwf.ro) is one of the world's largest and most effective non-profit organizations running nature conservation projects, its mission is to stop the degradation of the planet's natural environment by preserving biodiversity, promoting use of renewable natural resources, reducing pollution and waste consumption.

Ozone Homes (www.ozonehomes.ro) is the market leader in promoting the most modern and advanced technologies regarding green buildings. The projects developed by Ozone Homes are safe and comfortable, with high energy efficiency and affordable in terms of price and maintenance.