Energy savings in apartment buildings remain minimal. The Czech state distributed only one third of the funds for this purpose.

Press Release on audit No 20/19 – 25 October 2021


The Supreme Audit Office examined aid allocated to improve the energy performance of apartment buildings for the period 2015 - 2020. This aid was drawn from the Integrated Regional Operational Programme (IROP) and the New Green Savings Programme, i.e., from EU and national funds, and amounted to more than CZK 3.9 billion. However, this represents only about a third of the funds allocated for this type of aid. While both programmes have delivered energy savings for apartment buildings, they are small in volume and well below planned levels. These energy savings are part of the commitments towards the EU to be fulfilled by the Czech Republic under the Europe 2020 strategy.

Measures to improve the energy performance of apartment buildings, such as insulation, window replacement, or exchange of heat generators, are financed by the Ministry of Regional Development (MoRD) with EU money through the IROP. Additional funds, from the state budget, are distributed by the Ministry of the Environment (MoE) from the New Green Savings Programme. Under this programme, the construction of low-energy apartment buildings is also funded. In the years audited, the two ministries allocated a total of CZK 12.9 billion for these measures. However, they had paid out only around a third of the funds by the end of 2020. This was also shown in the low levels of energy savings which resulted from the two programmes.

For IROP, the planned savings were to reach 3.1 PJ (petajoule), but in fact amounted to only 1.3 PJ, i.e. 41%. For the New Green Savings programme, the amount of savings was even smaller. Of the planned 2.8 PJ, only 0.4 PJ was actually saved, i.e., only 13.5%. Failure to meet the targets for improving the energy performance of apartment buildings poses a problem as well because these targets are a part of a set of measures to help reduce the impacts of climate change across the EU. These measures concern energy savings in households as well as in industry, services and transport. An SAO audit of energy savings in industry, carried out in the year 2017, had already shown that the Czech Republic was not able to meet the objectives set in this area. And the Czech Republic is also not very successful in achieving energy savings on its own buildings, as shown by the results of the 2020 audit.

The reason why energy saving programmes for apartment buildings failed to achieve the planned savings was also due to the fact that they were launched with a delay. Apart from that, the applicants have shown little interest in receiving the aid. In the case of the New Green Savings Programme, their lack of interest was due to the low level of grant support, which was initially only 10-15%. In the case of IROP, the small benefits of the programme were also affected by the fact that the amount of funds earmarked for energy savings in apartment buildings was reduced several times, precisely due to the low interest of applicants.

The auditors also examined how the Ministry of Regional Development and the Ministry of the Environment had set the conditions for the distribution of subsidies and how the grant administration had been carried out. For example, they found that the MoRD did not set clear and comprehensible rules on the temporal eligibility of expenditure for the IROP. Furthermore, the projects were not selected by the MoRD on the basis of their efficiency, and the Ministry did not evaluate the projects according to their expected energy savings and cost ratio. This weakness was also highlighted by the European Court of Auditors in its 2019 audit. For IROP, there was also a long and demanding project administration. Approval took on average 104 days.

For the New Green Savings Programme, the MoE did not impose rules for the beneficiaries on how to select suppliers, but merely committed them to comply with the law. The MoE did not further monitor, how the beneficiaries proceeded in selecting the suppliers. Project administration was carried out by the State Environmental Fund for the MoE, but it also failed to monitor the progress of the beneficiaries. The MoE also did not ascertain whether the State Environmental Fund has carried out its administration duties correctly.

The SAO also verified 14 aid beneficiaries. All of them, with one exception, used the money for the intended purpose, and most of them followed the rules and regulations. For several beneficiaries, the auditors found partial weaknesses.

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