The bank, holding its 15th annual meeting in London, also delivered its five-year vision to funnel more investment cash towards southeastern Europe and Russia -- and away from the more advanced economies of new European Union member states.

The two-day conference, which ends late Monday, comes as the EBRD mulls investing in a controversial energy project on the island of Sakhalin, 40 kilometres (25 miles) off Japan's coast, amid protests from environmentalists, geologists and community leaders.

The EBRD was founded in 1991 to assist the transition of former communist nations to market economies and operates in countries in central and eastern Europe and central Asia.

On Monday, it unveiled its Sustainable Energy Initiative to encourage clean and renewable energy projects while making the region it operates in more energy efficient.

Under the initiative, the bank will invest up to 1.5 billion euros (1.9 billion dollars) in energy efficiency, renewable and clean energy projects over the next three years.

With further financing from other investors it is hoped that figure could rise to 5.0 billion euros. The bank aims also to win an additional 100 million euros from donor governments.

"If the EBRD (countries) had the energy efficiency of Europe, world energy demand would be reduced by more than 7.0 percent," bank president Jean Lemierre told delegates.

"That is why the bank is launching a Sustainable Energy Initiative focused on climate change and energy efficiency."

The wasteful and polluting use of energy is a legacy of centrally-planned economies that caused environmental and economic damage, according to the bank, which on Sunday unveiled a strategy to invest more cash in southeastern Europe and Russia and reduce its activities in former communist countries that are now EU members.

The Czech Republic will begin talks in October 2007 on its graduation or departure from the European Bank for Reconstruction and Development, Czech National Bank governor Zdenek Tuma announced Monday.

Lemierre meanwhile appealed to Russia -- which in recent years has sought greater control over its vast oil and gas reserves -- to allocate the country's resources in a transparent and fair manner.

"If there is support (within Russian political circles) for more state control of some of the country's resources, the challenge must be to ensure that resources are redistributed and managed in a fair way that the people and investors can understand," Lemierre added.

The region covered by the EBRD, which is headquartered in the British capital, is one of the fastest growing parts of the world and has a growing appetite for energy.

"Across the whole region, the EBRD has set a high priority on better use of energy," Lemierre said. "The global concern with climate change is one good reason to reduce the use of fossil fuels."

The EBRD aims to double its financing for energy efficiency and renewable energy projects, while developing feasability studies for newer renewable technologies.

The Worldwide Fund for Nature on Sunday pleaded with the EBRD to deny financing for Sakhalin, claiming that the controversial oil and gas project on Russia's far eastern island had again breached environmental standards.

Before the conference, Lemierre had indicated that a decision would probably be reached by September on financing an expansion of the so-called Sakhalin II project, which is led by Anglo-Dutch giant Royal Dutch Shell and has a projected 20-billion-dollar (16.4-billion-euro) price tag.

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