TASK AREA 1
DEVELOPMENT AND STRENGTHENING OF ENERGY SECTOR SMEs

The objective of this task is to provide support for energy sector SMEs (ESCOs, suppliers and manufacturers of EE equipment), strengthen their capacity, facilitate their growth in business, and support commercialization and further development of the industry.Key activities under this project component include:

detailed market analysis of energy efficiency potential in major energy demand sectors,
development of business models for more opportune market sectors,
public outreach to increase awareness of the benefits of EE technologies, and
capacity building and technical assistance to the selected energy sector SMEs.

Expected outputs are:
More developed SMEs performing effectively in the market and with improved business models and skills; and
Increased use of energy efficient technologies as Armenian consumers are increasingly aware of the benefits of energy efficiency.

The purpose of the market research is to identify more opportune target sectors and business entities of the Armenian economy from the perspective of energy efficiency improvements and energy saving potential. Its second objective is to determine the nature of technical assistance to be delivered to selected beneficiaries. Sectors covered in the research included the residential, commercial, industrial and municipal sectors with respect to the following major energy efficiency technologies and methods: heating, lighting, insulation, EE windows/doors (on the demand side) as well as energy systems and motors and pumps (on the supply side). CEEP anticipates that beneficiaries in market segments who are in need of support (identified through the CEEP market assessment) will also require training in business planning and finance and legal and regulatory matters and expects to leverage capacity building programs which AEAI previously developed in support of the SME/ESCO community. AEAI contracted the Armenian ESCO Association to conduct the survey among producers, suppliers of various EE equipment and products in order to identify existing barriers and opportunities, as well as anticipated development trends of this market sector. The survey findings will allow adjusting the training strategy elaborated by CEEP to build capacity of SMEs.

Based on market analysis, CEEP will prepare working business models for the most viable market segments that can be used for commercial financing. These models will be designed to help industry players to reduce risks associated with the commercialization of the sector and increase the profitability of their business.

Public outreach and capacity building activities are also an integral part of the CEEP. Public outreach will be aimed at disseminating information about the program objectives and activities, and increasing the awareness of the public concerning the benefits from use of energy efficient solutions and energy saving. The objective of training and capacity building is to support further market development of the energy sector SMEs and to facilitate commercialization of energy efficiency projects with participation of private donors, financial institutions as well as use of the USAID DCA mechanism.