What's new at CITYnvest - April 2016

It has been 6 months since CITYnvest marked its online presence and our website is constantly growing! Now, all 24 case studies of innovative financing models are available in 4 languages in the Resources Library. Besides, we have started our Capacity Building Programme; the first workshop took place in Latvia and another two are coming shortly. More information on events organized by CITYnvest, as well as all workshop materials can be found in the ‘Workshops section’.

We hope you will enjoy this short update.

Best wishes,

CITYnvest team

Table of Contents

  • First CITYnvest Focus Country workshop in Latvia kicks off the capacity-building programme
  • CITYnvest represents the voice of local authorities at Investor Days 2016
  • Innovative financing for energy efficiency in the West Balkan Region
  • Results of the European Project EESI 2020 on Energy Performance Contracting
  • EnPC-INTRANS identifies three main EPC business models
  • New underwriting tools for investment in renovation
  • Two new publications on ESCO model produced by EnPC-INTRANS project
  • Promote yourself on the new BUILD UP website

First CITYnvest Focus Country workshop in Latvia kicks off the capacity-building programme

On the 23rd  of February 2016,  representatives of local authorities, financial institutions, ESCOs and policy makers from local and regional level gathered in Riga to explore the innovative financing instruments for energy retrofits. The event was co-organised by CITYnvest and the Latvian Association of Local and Regional Governments (LALRG).

The panellists reminded that energy efficiency renovations in Latvia are realized mainly thanks to the European grants. However, Ton Overmeire from the Energy Fund den Haag stressed that there is a growing need for financial instruments, as the European Commission wants its money to be spent in more efficient way and will limit the availability of grants in the future financial perspective.

The experts stressed that the main interest in Latvia lays in retrofitting multi-apartments buildings. Those projects are usually difficult to launch, as they require agreement of the majority of the apartments owners. Yet, the Development Financial Institution ALTUM aims to support retrofits in multi-dwelling properties.  CITYnvest expert, Jean-François Marchand suggested that the Latvian stakeholders could also get inspired by the French model - Energies POSIT’IF, which focuses on multifamily apartment buildings. Claudio Rochas provided another example of a solution, which has already been applied in the Latvian context (the Sunshine project).

As a second big challenge, Andra Feldmane pointed out the fact that small projects are not eligible to benefit from the European Investment Bank or the Junker’s Plan funds thus bundling of investments is necessary. Therefore, she invited Latvian municipalities interested in developing a common platform for energy efficiency to get in touch with LALRG, as the association could play a role of a facilitator of such a project.

All presentations and pictures from the event are available on the page of the event. Films screened during the workshop can be watched on our Videos page. A more detailed event report will be published  soon.

CITYnvest represents the voice of local authorities at Investor Days 2016

On the 22nd and 23rd February, the Investor Days 2016 offered an opportunity to exchange ideas and discuss strategies to increase energy investments in the European building sector from both the investor and beneficiary perspectives.

CITYnvest was present at the event to express the voice of local authorities and to demonstrate how innovative financing models have already helped to realize energy efficiency renovations in buildings.

“We started CITYnvest from the belief in the catalyst role of local and regional authorities; with adequate support they can facilitate the mobilisation of the entire local value chain to set up a programme to finance energy efficiency”, said Climate Alliance’s coordinator Elise Steyaert. Another key point was made by Miguel Casas of Energinvest, who presented main lessons learned from the CITYnvest 24 case studies on levels of ambition, operational services and financial schemes.

CITYnvest representation to the event stressed the need to embrace local potentials, to bundle local smaller-scale projects and to develop a sustainable portfolio of bankable projects.

The PPT file presented that day can be downloaded from our website.

Innovative financing for energy efficiency in the West Balkan Region

Balkan Green Energy News provides an interesting reading on emerging models for financing energy efficiency and their applicability to the West Balkan Region.

The article explains emerging financing models, such as:

  • On-bill repayment,
  • On-tax finance,
  • Energy efficiency funds,
  • Revolving funds (internal),
  • Green bonds,
  • ESA financing model,
  • Public ESCOs for deep renovation,
  • Community funding and
  • Secondary markets.

The article also evaluates the potential of those instruments for energy efficiency investments in West Balkan region.

Read the full article.

Results of the European Project EESI 2020 on Energy Performance Contracting

The Final Report of the EESI 2020 project has been published. The report identified following barriers preventing stronger uptake of EPC:
  • High complexity of EPC models,
  • Lack of trust and persisting cultural barriers between  public  building  owners  and  private  ESCOs,
  • Too much focus on public  buildings,  and very few business models  for private buildings,
  • The Eurostat Guidance Note on EPC, which restricts off-balance accounting of EPC projects.

In order to reap in the future the full potential of EPC, the EESI2020 consortium recommends to:

  • Recognise and strengthen the role of project facilitators and train them at national or regional level,
  • Encourage programmes aimed at improving national frameworks for EPC and financially supporting the EPC clients (e.g.  as the  National  Energy  Services Framework in Ireland and the BAFA programme for EPC facilitation in Germany),
  • Create  pragmatic  ways  to  work  within  and  around the recent Eurostat Guidance Note on EPC,
  • Put more attention on expanding the private sector EPC market.

The project EESI 2020 has been addressing ways to improve the impact of EPC in nine European regions. EPC schemes were supported on the regional level by creating task forces, including EPC in regional energy plans and by assisting pilot projects. In  nine  metropolitan  regions,  a  total  of  27  EPC  pilot projects have been realised within EESI 2020. Additionally EESI 2020 developed facilitation materials in nine languages. Those materials include a project database with over 50 best practices, a detailed facilitator guideline and training modules.

EnPC-INTRANS identifies three main EPC business models

The most important element of energy performance contracting (EPC) is the energy saving guarantee, linked with refunding of the complete project costs by the savings. In order to create capacities for EPC in Europe, the EnPC-INTRANS project investigated the European market, consulted stakeholders in 9 countries and published results of the research in the study: “Adapted business models for energy performance contracting in the public sector of the EnPC-INTRANS partner countries”.  The project defined three distinct types of EPC business models that had proved to be successful for different refurbishment levels:
  • EPC light business model
  • EPC basic business model
  • EPC plus business model

All models are based on the refinancing of costs by savings, but the extent of the measures included and the linked risks, costs and contract durations are different.  The study analysed EPC markets in Croatia, Germany, Greece, Latvia, Romania, Serbia, Slovakia, Slovenia and Ukraine.

New underwriting tools for investment in renovation

ICP Europe protocols for investment in retrofitting buildings were released by the  Investor Confidence Project (ICP) Europe. ICP system standardizes how energy efficiency projects are developed, maintained and measured, thus promises mass-scale financing for the building renovation market.

The Energy Efficiency Financial Institutions Group, cited investor confidence as the top priority for transforming the energy efficiency market. To facilitate large scale investment into energy efficiency, ICP Europe developed ICP Protocols, which are embedded into their partners’ financing processes for building renovation projects.

Dr. Steven FAWKES is a member of the Investment Committee of the London Energy Efficiency Fund. "Governments and NGOs have for years been talking about how energy efficiency is the low hanging fruit that can bring a healthy return on investment," he said. "But, despite the actions of a few market leaders, investing in it is not as easy as it's made out to be – or everybody would be doing it. With the release of the first six renovation protocols, ICP Europe is helping energy efficiency become a standardised product and, thus, an indispensable part of every institutional investor's portfolio", he added.

Building owners, project developers, finance and energy service providers, insurers, local authorities and utilities all stand to gain from the ICP system.

Read the full press release.

Two new publications on ESCO model produced by EnPC-INTRANS project

EnPC-INTRANS project focuses on increasing the market uptake of technologies for energy efficiency (EE) improvements in public buildings and services. The project aims to achieve its goals by encouraging private sector to participate in innovative financing schemes for EE investments.

First of the new publications, the “Baseline study on the current state of EPC/ESCO project development and implementation” analyses the situation in 8 European countries. The analysis allowed to distinguish 3 levels of market development. Established ESCO market has been identified in Germany; Croatia, Slovakia and Slovenia represent emerging ESCO markets; prospective ESCO markets have been diagnosed in Greece, Latvia, Romania, Serbia and Ukraine. More conclusions and detailed descriptions of each of the markets can be found in the original document.

The second publication entitled “Training needs assessment” will allow to create capacity-building materials, which will respond to the educational needs of stakeholders in countries participating in the project.  The report was developed based on responses to questionnaires and interviews. Respondents identified 11 priority subjects for training materials:

  • Basic EPC concepts
  • Financing options
  • Legal background
  • Contract models
  • Measuring and verification of guaranteed savings
  • Technical project design
  • Economic and technical risk assessment
  • Tendering procedure
  • Economic basics
  • Risk mitigation options
  • Calculation of baselines

Promote yourself on the new BUILD UP website

BUILD UP, the European portal for energy efficiency in buildings, has recently launched its new website. The current site offers improved navigation, a new layout and mobile-friendly design.

BUILD UP, an initiative of the European Commission, is a comprehensive database of information. It covers news, events, case studies, webinars, links to publications, and other resources on energy efficiency in buildings. BUILD UP has recently launched its website with a live webcast on the latest findings of Concerted Action EPBD.