European subsidies for energy savings: slow drawdown of subsidies, long approval of projects and no goals in sight

Press release to audit No. 17/23 – 23. 7. 2018


The Supreme Audit Office focused on providing and drawing European funds from the Operational Program Enterprise and Innovation for Competitiveness (OP EIC) to help achieve permanent energy savings in the industrial sector. Auditors examined the procedure of the Ministry of Industry and Trade (MoIT) and the Agency for Entrepreneurship and Innovation in the distribution of subsidies and reviewed also 15 selected projects worth almost CZK 70 million. It has emerged that energy savings were minimal as at the end of 2017, which was also reflected in the slow drawing of funds, the length of time for approving subsidy applications as well as the lack of interest in support. The auditors even revealed irregularities in the beneficiaries of grants.

The Czech Republic has set a target of saving 51 petajoules of energy by 2020, in which case European OP EIC subsidies were to contribute significantly to achieve this goal. Only thanks to them, 20 petajoules of energy were initially supposed to be saved by 2020. At the end of 2017, energy savings did not reach even one percent of this sub-value.

One of the reasons that had been negatively affected by such low energy savings was the slow drawdown of prepared funds. For energy savings under OP EIC, the European Union has prepared approximately CZK 22 billion for the Czech Republic in the 2014-2020 programming period. At the end of 2017, only three percent of these funds had been drawn, i. e. about CZK 600 million. In order to accelerate the funds drawdown, the MIT created the "Loan Fund EX 2017" in 2017, which could be used by people interested in saving energy. However, even this did not speed up the drawing of subsidies – not a single loan was provided from this fund.

Another reason was also the long process of approving grant applications. Although the average length of approval was shortened, in 2017, the evaluation of a project application lasted in average for almost 404 days.

Auditors also scrutinized costs linked to energy savings. The projects under scrutiny showed that saving one gigajoule of energy cost approximately CZK 2,200. Initially, it was expected that saving this amount of energy could be acquired for CZK 1,000.

In the case of recipients, auditors have discovered, for example, shortcomings linked to tenders, some of which also had ineligible expenditure reimbursed. Some of these deficiencies could have been avoided if the MoIT control system had been more effective.

Communication Department
Supreme Audit Office

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