Urban development in Moldova and Ukraine traditionally did not deal with issues of energy efficiency (EE) since Soviet times, when energy security was not endangered and energy resources were extremely cheap. Unfortunately, since independence and with prices worldwide increasing for energy resources, there were no focused efforts to address energy efficiency. Moreover, there is not yet a clear EE strategy supported by adequate policies promoting energy conservation and imporved efficiency. These aspects of municipal development are not covered by any of the positions within Mayoralties. An additional obstacle to the introduction of EE technologies lies in the regulatory framework and policies promoted at the level of both Central and Local Public Authorities. For example, public institutions (e.g. schools, hospitals) are not motivated to implement saving programmes, as in case of success, their budgets are immediately cut and no resources for further development would be provided. On the contrary, the cost of public services should be minimized, therefore there’s a strong need to first identify regulatory barriers and then develop well balanced mechanisms that would stimulate public institutions to promote energy efficient behaviour on one hand, while on the other hand gradually reduce the cost of public services. In spite of indubitable economic and ecologic benefits of energy efficient behaviour, often there is insufficient knowledge and understanding of existing opportunities and technologies both among individual and institutional consumers, as no explicit and convincing data on recuperation of investment is available to them. The overall purpose of the project is therefore to incorporate the Energy Efficiency (EE) perspective in the administration of two municipalities (Chisinau, Republic of Moldova, and Sevastopol, Ukraine), institutionalize it, and prepare the ground for infrastructural investments aimed at improving the energy efficiency in these municipalities, as well as create immediate energy saving impact by stimulating respective behavior in public institutions, primarily schools.