sustainable energy week 13-17 june 2016 · project example: efsi and elena picardie region...
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SUSTAINABLE ENERGY WEEK13-17 June 2016
Innovative financing for sustainable energy in practice
Wednesday 15 June 20169:00 – 10:30
De Gasperi room, Charlemagne building
Speakers
Claude TURMESMember of the
European Parliament
Didier GAMBIERHead of Department
EASMEEuropean Commission
Paul HODSONHead of Unit
DG ENEREuropean Commission
Louise WHITEEuropean
Investment Bank
Peter SWEATMANChief Executive
Climate Strategy
James VACCAROHead of Corporate Strategy
Triodos Bank
Françoise RÉFABERT CEO
Vesta Conseil&Finance
Steven FAWKESSenior Adviser
Investor Confidence Project
Jessica STROMBACKChair
Joule Assets Europe
Paul HODSON
Head of Unit Energy EfficiencyDG ENER, European Commission
EIB Support to Sustainable Energy Finance
Louise White
European Investment Bank
Innovative Financing for Sustainable Energy Brussels
15 June 2016
European Investment Bank 5
The European Investment Bank (EIB)Long-term finance promoting European objectives
European Union’s long-term lending bank set up in 1958 by the Treaty of Rome.Shareholders: 28 EU Member States Governance– Board of Governors - EU Finance Ministers – Board of Directors - Member States & European Commission – Management Committee - EIB’s executive body – Audit Committee - independent, non-resident
One of its main Priority Objectives is Environment and climate
• EIB contribution to promote EE goes beyond lending: EE is mainstreamed in all projects it finances
• The Bank seeks to support all the RE technologies, while ensuring that the supported projects are economically sound
• Support to promoters & intermediaries to develop EE projects: • Technical Assistance and developing financial instruments• On its own behalf or in cooperation with EC or other entities
6European Investment Bank
EIB provides significant financingfor Sustainable Energy at EIB
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2011 2012 2013 2014 2015
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7European Investment Bank
Sustainable Energy support activities at the EIB
Lending• Loans (direct and intermediated)• European EE Fund (E-EEF)• Private Finance for Energy Efficiency (PF4EE)• European Fund for Strategic Investment (EFSI)
Advising
• ELENA (European Local Energy Assistance)
• JASPERS (Joint Assistance to Support Projects in European Regions)
• EIAH – European Investment Advisory Hub
Project example: EFSI and ELENAPICARDIE REGION “Picardie Pass Rénovation”
Picardie Region received a loan of EUR 25 million and also has an ongoing ELENA technical assistance programme
The works mainly consist of improving the insulation of the private housing -renovation of the buildings' heat generation and distribution system, including ventilation systems, small scale wood-fired boilers or solar thermal collectors
ELENA support to assist homeowners in the implementation of EE measures with initial advice, energy audit, defining the optimal set of EE measures
As of March 2016, the 112 ongoing building sites provide work to more than 400 local craftsmen and companies which participate in the Picardie Pass Renovation programme. The initiative is expected to create 650 jobs in the building sector by the end of the pilot phase (end of 2018) and more than 3,500 positions in the roll-out phase.
http://www.eib.org/attachments/documents/picardie_pass_renovation_factsheet_en.pdf European Investment Bank 8
Project example: JASPERS
Development of an investment programme for a scheme for energy efficiency renovation and use of RES in public and residential buildings, private service (tourism and industry) and manufacturing sectors , to use ESIF 2014-2020
Preparation of Applicant's guide, sample application forms and tendering documents for the scheme based on typical investment programme and funding arrangements for energy efficiency renovation and use of RES related to the potential funding programme.
Assignments in preparation of EE scheme (Romania, Slovakia, Croatia)
European Investment Bank 9
Thank you for your attention
Further information at www.eib.org
10
James VACCARO
Head of Corporate StrategyTriodos Bank
Françoise Réfabert
Vesta Conseil & Finance
Challenges in setting up integrated services for home renovation in France• Housing refurbishment market actors will not spontaneously
shift towards energy efficiency• Government and most of local authorities try to act as
catalysts, but…• market to-date has been developed on a “top-down” basis, driven
by incentives and subsidies• A sustainable business model for advising households on how to
carry-on an energy-efficient refurbishment is still not present• Energy transition Law (August 2015) allows regions to set up
'public services for energy efficiency' which encompasses: • advising and assisting households in designing the retrofit, • helping them find qualified professionals, • optimizing the funding plan for the renovation,• providing finance (loans)
Confidence in the quality of the works and Access to long term financing are essential drivers of households’ demand
Confidence in the quality of the works• Coordinate …
• National level: set standards, reshuffle tax incentives so as to channel consumers demand towards effective energy-efficient works
• Regional level: organize training, selection of professionals and control compliance of renovation works
• Involve construction insurance players in order to cover consumersagainst consequences of poor performance
• Involve potential prescribers : banks, realtors etc,
• … And package a national quality and performance brand • Example to follow: KfW Effizienzhaus brand
regional operators to build up locally offers based on quality and performance as a first step of a national branding
Access to long term financing
• Public Third Party financing companies are paving the way
• LT Financing proposed to households and condominiums for refurbishment works
• Include in financing the cost of prior advice and follow-up aftercompletion of works
• Build a track record of cost of risk and measured energy savings
• Experimentation phase should allow to share this trackrecord and build-up a loan portfolio large enough to structure long-term green bonds issuance
• Need to structure a debt aggregation vehicle, funded and guaranteed by public sector at inception
• Regions would like to use structural funds to set up guaranteemechanism
• Energy Transition Law provides for a national guarantee fundwhich is presently directed to lowest income households
• Debt aggregation vehicle would allow third-party financingcompanies to act as originators and reduce their balance sheetsize
• Could induce banks to extend their lending offer
Refinancing
Third-party financing
companies
Long termloans
Debt Fund(Securitization
entity)
Labelled Funds
Green bond
issuance
Repayment
Public guarantee
(State, regions)
Energy renovation
projectEnergy
renovationproject Energy
renovationproject
Assignment of receivables
The Investor Confidence Project
Dr. Steven FawkesBrussels
15th June 2016
The sole responsibility for the content of this presentation lies with the author. It does not necessarily reflect the opinion of the European Commission, which is not responsible for any usethat may be made of the information contained therein.
Lack of standardization in EE results in:
Greater performance riskUncertainty limiting demand
Higher transaction costsDifficult to build capacity
Difficult to aggregate
Investor Confidence Project Protocols
BASELINING
• Existing Building • Drawings• Weather File• Energy Usage• Energy Rates• Occupancy
SAVINGS
• Model File
• Calibration Data
• Bid Packages
• Certifications
OPERATIONS
• BMS Points
• Fault Plan
• Maintenance Plan
MEASUREME
• M&V Model • Regression
Model• Adjustments• Impact• Baseline
Adjustments
COMMISSION
• Cx Plan
• Cx Authority
• Test Procedures
• Facilities Req.
Cx
Protocols standardize best practice in project development
and documentation
ICP EU Protocols
Large
Standard
Targeted
Whole building retrofit, dynamic modeling
Whole building retrofit, no dynamic modeling
Single or limited number of EE measures
ApartmentTertiary
6 European Protocols available now and being applied to a
range of projects and programmes across Europe
Reducing Transaction Costs for Sustainable Energy Asset Investments
Jessica StrombackJune 15, EUSEW
Innovative Financing for Sustainable Energy in Practice
The sole responsibility for the content of this presentation lies with the author. It does not necessarily reflect the opinion of the European Commission, which is not responsible for any usethat may be made of the information contained therein.
The Challenges of the Financing Gap
Project valuation difficulties: lack of standardised, independent, project valuation tools, which are needed to assess the return on investment (RoI) easily and at a low cost, and would allow small to mid-sized projects to find easier access to financing;
Difficulties in project optimisation: EU regulations on SEA projects are often highly complex and fragmented across Member States. Many projects miss important revenue streams as a result;
A communication gap between contractors and investors leading to a lack of trust: it is often difficult for SMEs to present projects in a manner, which allows a financier to easily evaluate risks and benefits – in other words the financeability of the project;
A lack of standardization in the process used for underwriting or management of energy performance risks, leading to lack of clarity and comparability in the project assessment and therefore to increased costs for all parties involved.
03/02/16
The project will combine the following existing functionalities:
1. Valuation: (JOULE) Robust independent ex-ante automatic valuation of SEA projects for both SEA contractors and SEA investors in different market environments against current market data;
2. Risk Assessment: (HSB) Initial audit of the project’s technical risks, including the proposal of risk transfer mechanisms such as insurance of equipment, business interruption or asset performance to increase investors’ trust level in a project;
3. Standardisation: (ICP, JOULE) SEA project optimisation through e.g. identifying additional revenue streams and providing partnering options;
The project aims to enable the finance of sustainable energy assetsby deploying independent, standardised project evaluation and project optimisation tool.
Making Finance Easy
Project Goal
4. Finance: Facilitation of the communication and cooperation
between investors (ourselves or others) and contractors, allowing the
matchmaking between investors and contractors with search and filter
functions.
Final Outcome
Thank You!
Jessica StrombackChairman
Joule Assets Europe ABMobile +358 449066821
jstromback@jouleassets.com
Speakers
Claude TURMESMember of the
European Parliament
Didier GAMBIERHead of Department
EASMEEuropean Commission
Paul HODSONHead of Unit
DG ENEREuropean Commission
Louise WHITEEuropean
Investment Bank
Peter SWEATMANChief Executive
Climate Strategy
James VACCAROHead of Corporate Strategy
Triodos Bank
Françoise RÉFABERT CEO
Vesta Conseil&Finance
Steven FAWKESSenior Adviser
Investor Confidence Project
Jessica STROMBACKChair
Joule Assets Europe
Claude TURMES
Member of the European Parliament
MEET - NETWORK - COLLABORATE
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