It is very likely that an energy crunchcould hit several countries in Eastern Europe and CentralAsia (ECA) in the next five or six years. Before thefinancial crisis of 2008, several electricity importingcountries in the region had begun to experience difficultieswith supply; however, the crisis has reduced demand andcreated some breathing room. It has also created a window ofopportunity to take action to mitigate the impact of theanticipated energy crunch. But countries need to act now.Mitigating actions are required on both the supply side andthe demand side and will require significant investments(about $3.3 trillion in 2008 dollars over the next 20 years,or about 3% of cumulative gross domestic product) if theregion wants to meet all its anticipated energy needs. Thislevel of investment cannot be provided by the public sectoralone and measures will be required to create a climate thatappeals to private sector investors. In conclusion, theregion faces a potential energy crunch. The financial crisishas provided some breathing room to address the potentialenergy constraints, but countries need to act quickly totake advantage of this window of opportunity by promoting anattractive climate for investment. At the same time theyneed to ensure that the energy strategies they pursue areperceived as being responsive to environmental concerns.
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