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Czech Republic: Subsidy Programme halted

Submitted by Baerbel Epp on November 1, 2010

 Applicants for incentive scheme in Czech Republic Czechs trying to finalize their applications for the subsidy programme Zelena Usporam (Green Savings) at the last minute: The Czech Ministry of the Environment had announced an interruption of the subsidy programme on 25 October – and halted it just a few days later.
Photo: http://hn.ihned.cz

Both the Ministry of Environment and the State Environmental Fund announced on Monday, 25 October, that the subsidy programme Zelena Usporam would come to a halt between 29 October 2010 and 1 February 2011. The sudden and unexpected stop resulted in a big rush to the offices of the programme administrator. Nevertheless, officials were concerned that the news had not reached all potential applicants yet. And, why has the programme been stopped all of a sudden?

According to Libor Michálek, the Director of the State Environmental Fund, the programme has primarily been halted to ensure that all applications submitted before 29 October can be thoroughly evaluated during the three-month pause. The checking of applications had recently been complicated by companies handing in the papers for their customers and deliberately submitting incomplete applications, which, for example, lacked important documents such as a project documentation. This trick allowed them to be placed on the waiting list quickly, and made sure they would receive a subsidy eventually, even if it was not certain they were going to realize the project at all.

This phenomenon became so widespread that the Ministry of Environment decided to no longer admit incomplete forms to the application process. Due to the enormous interest in the subsidy programme and the exponential growth of applications during the past few months, the Ministry of Environment also lost track of exactly how much of the budget is still left for distribution. Before 25 October 2010, 50,000 applications were submitted, of which only 30,000 applications have already been approved. “We need the pause to assess the situation and find out how much resources are actually available,” affirmed Michálek.

That is why the continuation of the programme in February remains uncertain. “All of our information material cited that the subsidy programme will continue until the resources run out OR we reach the end of 2012,” the Director of the State Environmental Fund confirmed. However, the Ministry of Environment plans a new sale of Assigned Amount Units (AAUs), whose revenues will then be added to the budget of Zelena Usporam.

The stop of the Czech subsidy programme is very bad news for all solar thermal sector companies. “A lot of people have relied on Zelena Usporam and have projects in process. We cannot accept the explanation given by the Ministry. We fear that Zelena Usporam is not going to be continued in February,” Miloslav Mareš, President of the Association of Building Entrepreneurs (ABE), argues. According to Mareš, the subsidy programme was an important anti-crisis measure, especially for small and medium-sized companies. Nevertheless, the ministry hopes that new funds for the programme will become available by selling the above-mentioned AAUs and applications will once again be accepted after 1 February 2010.

More information:
Zelena Usporam (Green Savings): http://www.zelenausporam.cz/
Association OF Building Entrepreneurs (ABE): http://www.sps.cz/jm_english/index_eng.asp?lokalizace=ang

This text was written by Vladislava Adamenkova, a Czech student of international business studies in Vienna, Austria.

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