SNAPSHOT
The manager: Ivan Gerginov
The job: executive director
The company: Bulgarian Energy Efficiency Fund (BgEEF)
In brief: BgEEF acts as a non-profit bank, offering loans, technical assistance and partial guarantees for projects related to energy efficiency. It began operations in January 2006. With a background in corporate finance, having spent time working both in Sofia and London, Gerginov was recruited back to Bulgaria to work for BgEEF in October 2005. As the fund’s legal representation, he is responsible for the administration and management of BgEEF’s operations.

“What I like most about my job is that I am good at what I do, and I get it done. I feel good when I have 1001 problems to solve at work, and by Friday afternoon, the task list has been reduced to like 10 tasks, which I can do on Saturday with the morning coffee,” he says in an interview with The Sofia Echo.

Essentially, BgEEF is a not-for-profit bank that promotes the development of an energy-efficient market in Bulgaria. The fund offers partial credit guarantees, loan financing, and technical assistance to private enterprises, municipalities and households interested in implementing energy-efficient projects. The organisation finances investments to improve energy efficiency in industrial processes, rehabilitation of buildings, improvements to the heat source and distribution system, rehabilitation of municipal facilities and other energy end-use applications. For example, in order to implement many of these projects, BgEEF will work with commercial banks that typically provide the financial assistance, while the fund offers the guarantees.

Within an independent, transparent organisation, Gerginov’s job as the executive director makes him responsible for the administration and management of BgEEF’s operations, which include the signing of contracts with external experts, managing the fund’s property and being in charge of the elaboration and implementation of a comprehensive marketing campaign. In addition, he acts as the facilitator between the fund manager and the management board. Representing the team of experts at BgEEF, he organises and participates in monthly board meetings where he presents potential projects to be approved and discusses strategic decisions that are to be made. In addition to his routine daily activities, he will also spend time each day seeking to recruit as many financial institutions on board to help finance the projects with which BgEEF is involved. Gerginov emphasises the importance of good partners to fund these projects such as financial institutions and utility companies.

Before graduating in 2000 from the University for National and World Economy in Sofia with a bachelor’s degree in finance, Gerginov worked as an accountant and later as a senior analyst responsible for tasks including cash flow project management. After graduation, he remained in Sofia for four years to work in corporate finance. As an employee of Elana Holding, he was responsible for doing IPOs and investment banking, in addition to several deals with the EBRD. Gerginov found this to be a challenge, as the market had yet to develop the attitude to understand that corporate financing was helpful for their companies. He was dealing primarily with new businesses that had just been privatised.

In 2003, Gerginov moved to the United Kingdom, where he attended Cass Business School in London, receiving a masters in investment management by 2004.

In London, Gerginov began working as the head of corporate finance for Catalyst Partners, which focused on corporate finance projects in Eastern Europe. He then moved on to become an associate director of Prospect Capital, where he was in charge of projects related to Eastern Europe and project management of carbon credit deals.

Considering selling carbon credits himself, he began asking around when he learnt about the formation of BgEEF (though due to its small-scale profits, it will probably not sell any carbon credits in the near future). Given his ample experience in this area, Gerginov was appropriately recruited back to Bulgaria by his former employer, the CEO of Elana, to become part of the BgEEF team.

As a result of following the progress since the organisation’s inception, by the time Gerginov joined, he was familiar with the objectives, its structure and how it all was supposed to work. So it wasn’t a shock, rather a smooth transition upon arrival. Though he is a bit disappointed that he will not get the opportunity to sell carbon credits!

Eleven people total compose the fund. There are three financial experts, three technical experts, four administrators and one executive director at BgEEF.

At the time of his arrival, because the team was still in the process of being assembled, Gerginov was able to cement his place at the fund by playing an important role from the early stages of its growth. He notes that “no matter what you do, you are always working with people and themes of people. As a manager, I have to select a team where personalities complement each other and always create a balance”.

He talks about how much easier it would be if one owned his or her own organisation and had full control of its actions. However, he considers himself a partner at BgEEF, where he is always in discussion with people.

He realises that at the end of the day, you have to eventually find a way to agree with everyone. Gerginov feels that the employees at BgEEF represent such a balance. In discussing how to retain that desired balance, Gerginov emphasises the importance of always staying professional. “When you are at work, you can’t let personal attitudes get in the way.”

Reflecting on the difference between his experiences in London compared with Sofia while working in the same field, Gerginov notes his fondness towards London.

“London was lots of fun and mountains of work. I went there primarily to continue my education, but as the programme was part time, I filled the rest of the time with work. So it was 9am to 6pm work, 6pm to 9pm studies.”

Nevertheless, Gerginov reminisces about his visits to Bulgaria when he still lived in London. When he would return home to visit family and friends, he never needed time to settle in and get used to the Bulgarian lifestyle. However, every time he would return to London, he would always need a week or so to acclimate back to his normal routine. Something about Bulgaria could never be replicated while living in the UK for the three years he was there. It was not about friends or his established niche, it was simply the way of life that he missed.

As for his work, Gerginov missed all the new experiences that used to occur when he worked in Bulgaria, “doing stuff for the first time”. In London, there is not as much room for innovation, adaptation and the flexibility he found in his experience working in Sofia.

“In London, you feel like you are only a small part of a big machine.” In contrast, one thousand things might happen to the Bulgarian market while nothing may happen to London’s. It is this constant rush that keeps people on their toes that attracted Gerginov to BgEEF. Though he took a significant pay cut to return, he reflects that “this was something that (had) never been done before in Bulgaria. I had to start from scratch, and little by little build up a self sustainable financial institution”. It appears that it was worth the adventure despite the many hurdles that lie ahead.

Gerginov discusses the challenges he faces when trying to sell the concept of energy efficiency in Bulgaria: When people think about energy, they simply think about their monthly bill and that is the end of how much time they want to commit to learning more about it. “What I realised is that you can’t actually sell energy efficiency. This is something that they can’t grasp. When we talk to municipalities, you can’t say to the mayor, I will save you X kW of energy and this will save you X amount of money.”

Gerginov recounts a story, where he was explaining one day to a mayor about the possibility of replacing the city’s streetlights. None of the streetlights was working, but BgEEF would help finance a project where they could find a way to replace them all and save energy at the same time.

The mayor responded by saying that if he operates the lights everyday of the year, he would be spending 100 000 leva. But he only has 10 000 leva allocated for the streetlights in his budget. So he turns the lights on for only one tenth of the year and shuts them off for the remainder of the time. If the mayor chooses to replace them through an energy-efficient project, he will still have to shut them off for a large portion of the year.

Gerginov then had to rephrase his pitch, asking the mayor to forget about the money for a moment, and to think about the comfort of the people. To think about the next elections, where he will be able to have a tangible project to point at when constituents ask what he has done for the city. Businesses easily grab on to this idea. They understand the importance and benefit of pleasing their clients if the profits are not as easy to explain.

However, it takes more creativity to help a municipality understand why this will benefit them. The apathy tends to be stronger. “What we try to say to [the municipalities] is for them to do the [project], and they will then look good in the eyes of their people.” At the same time, they may also decide to participate because a neighbouring municipality has partaken in a similar project and benefitted from its results.

Gerginov discusses how each one of their clients requires a different approach, whether it is a municipality or a bank. A bank does not want to hear that it can be a steward to the environment and reduce green house gases; it wants to hear how it will profit from such a project! So energy efficiency often becomes a hidden agenda.

Energy efficiency is connected to everyday life, remarks Gerginov and “the fact that we are focusing on it doesn’t mean the world is focusing on it. Basically, we need to adapt to what our clients perceive as valuable and then try and put energy efficiency in there”.

In a developing economy like Bulgaria’s, it is hard for people to think about prospective investments in a sector like energy efficiency, “because this means they have to give up something today in order to get something in the future”.

Gerginov describes people’s reactions when approached about foreign ideas like energy efficiency; given their tight budgets, it is difficult for them to understand the incentive of participating in something that will tie them down with debt for the next five years. Hence the importance of complementing the concept with additional incentives so it can provide greater motivation than just eventually saving money sometime down the road.

“It will take a lot of time for the people to start looking into the future and to start planning because they hated the essential planning and essential economy of the past. There were some years where people even thought of ‘planning’ as a dirty word: ‘We don’t plan, we just do it’. And then gradually, you come back to the same concept, that you need to plan because otherwise you get surprised by the future.”

Gerginov continues that many people’s first instincts are to go after the cheaper option, such as switching to gas. But what happens when Gazprom decides to double its prices in the next year? This is where energy efficiency plays a significant role, and where BgEEF tries to help people understand the potential in looking past temporary solutions and considering long-term investments.

Gerginov feels strongly that what is most important is “to feel good about yourself and what you are doing”. Happy to be back and working in Bulgaria again, he is enthusiastic about the opportunities that BgEEF will present to the Bulgarian energy market. With the market’s emerging liberalisation, there is significant potential for organisations like BgEEF. Gerginov predicts that the market will evolve and merge with the rest of Europe, perhaps taking a more similar appearance to Poland’s current energy market, where conditions have begun to relax.

Under the Kyoto Protocol, Bulgaria is required to produce 12 per cent of its energy from energy efficient sources by 2012. Currently, Bulgaria produces less than four per cent from such sources. Given the current upward trend that BgEEF is following since it began implementing projects in January 2006, Gerginov forsees ample room for growth. In the next five years, hoping to remain as its executive director, he believes the fund will be able to double or triple its capital and eventually shift from financing to only allocating guarantees. In addition, he also notes the possibility for the fund to attract other funding and find new incentives so it can grow and access more areas.

Though the concept of energy efficiency has been slow to pick up in the current market, it has recently been experiencing a positive change in how it is perceived. This is evidenced, for example, through new laws and tax bracket exchanges. People used to believe that saving energy was nothing more than making sure one would turn off the light when leaving the room. However, times have changed and people are beginning to understand that there is more to it than the flick of a switch.

It is people like Gerginov, who are able to find a successful means to convey the message that will ensure that energy efficiency plays a larger role in Bulgaria. It is people like Gerginov, whose work ethic is emblematic of his competence and skilful management of such an organisation, that will ensure its success.