Energies POSIT IF Low energy refurbishment of. condominiums in the Île-de-France Region. Société d Economie Mixte Energies POSIT IF:

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1 Energies POSIT IF Low energy refurbishment of Société d Economie Mixte Energies POSIT IF: Promoting, organising, supporting and inventing energy transition in the Île-de-France Region condominiums in the Île-de-France Region Energy Efficiency Finance Marketplace 19 January 2017 IEE/12/717/SI

2 CONTEXT I n the Î l e - de- F ran ce R e g i o n 4. 7 M d we l l ings o f wh i c h 7 2 % a r e c o l l ect ive b u i ldings P r i o r i ty t a r get o f 1 M r a t e d i n energy c l a s ses E, F, G ( t o kw h/m²/annum) (1) C o n s t r aints i m p a cting r e n o va t i o n p r o g r a mmes N o n -professional m a nagement o f b u ildings ( c o - o wner s ) L o ng d e c i sion - m ak ing p r o c esses L a c k o f t r u s t o f c o m panies F i n ancing s c h e m es n o t a d apted t o l o ng - term p a yback i n ve s tments (ove r 1 5 ye a rs) (1) The average consumption of the housing stock is 220kWhpe/m²/y (heating and domestic hot water) and 330kWhpe/m²/y when including cooking and specific electricity. 2

3 ENERGIES POSIT IF Shareholding 85% in public ownership: - Île-de-France Region - Paris City - 12 other local authorities 15% in private hands: - Caisse des dépôts et consignations - Caisse d Épargne IdF (bank) Main activity: Third-party financing of collective buildings (private and social) 3

4 OBJECTIVES Increase condominium confidence and expertise Stimulate investment in renovation projects Support high standards in thermal retrofitting: min. 40% energy saving Business based on 3 innovations One-stop shop for energy renovation Guarantee on energy performance Third-party financing condos renovated 8000 to dwellings 250M cost 4

5 ENERGIES POSIT IF OFFER TO CONDOMINIUMS Condominium Helped by local facilitators General Assembly Sub-contracting agreements Architects Thermal engineers Construction companies OFFER Design phase Works phase Energyrenovation programme design + Financial planning General Assembly Implementation of the works + Third party financing with Energy savings guarantee or O&M The process G.A. : General Assembly O&M : Operation and maintenance Assessment Design + finance plan Works Monitoring O&M

6 IS THE RENOVATION OF A COLLECTIVE BUILDING PROFITABLE? How to finance the renovation project? Energy savings P a yb ack t i m e b e t ween 10 a n d 3 0 ye a r s Ave r a ge r e s i dency7 ye a r s 6

7 IS THE RENOVATION OF A COLLECTIVE BUILDING PROFITABLE? How to finance the renovation project? Energy savings Green value of real estate A n A / B - r ated a p artment i s wo r t h a n a ve r age o f 1 2 % m o r e t h a n a G - r a t ed o n e. T h i s i s an a ve r age 30k i n c r ease i n t h e va l u e o f a 2 5 0k a p artment. 7

8 HOW TO FINANCE IT? Collective grants R e gion c o u ncil s u b sidy ( C o p ro d u r abl e) W hit e c e r t i f ic ates How to finance the renovation project? Individual grants Ta x c r e dits D i r e c t s u b sidies f r o m n a t ional / local a u t horities, e t c. Remainder S o f t l o ans T h i r d - p a rty f i n a n c i n g 8

9 THIRD-PARTY FINANCING Third-party financing consists of financing the cost of the energy retrofitting through the energy savings generated in the long run. The third-party financing company realises the project and provides the investment needed to implement the renovation works. After the works, the condominium repays the company over the long term, making it possible to have almost zero extra costs for the household. 9

10 THIRD-PARTY FINANCING Tow ards the implementation of the third -party financing March Third-party financing approved under French law May IEB framework programme of 400 million loan to support TPF vehicles in the context of the Juncker Plan: 400 million for French regions of which 100M to renovate 8000 to dwellings over the next four years in Ile-de-France August The Energy Transition law allows third -party financing companies to operate thanks to an exception to the banking monopoly The next steps Finding a surety company Obtaining ACPR (bank and insurance regulator) authorisation 10

11 FOCUS ON EIB LOAN Tr a nsact ion f e asible t h anks t o t h e guarantee p r o vided b y the E F S I t o E I B A m ount: m i l l i o n M a t u r it y: 2 2 ye a r s Tr a nches ( d r a w-down): M a x 3 2 ( m i n i m u m 0. 5 m i l l i o n ) E l i gibility : thermal r e t r o f it ting p r o ject s i n c o n dom iniums a n d social h o using s e c t ors P r o j ect s i ze : u p to 25 m i l l i o n ( t o t a l p r o ject c o s t ) F i n ancial c o n t ribution o f t h e E I B c r e d i t l i n e: u p t o 75% o f the project c o s t 11

12 MAJOR ACHIEVEMENTS 6 c o n dominiums h a ve s t a r t ed t h e wo r k s p h a se ( a p artments) E n e rgies P O S I T I F i s a r e f e ren ce f o r s e ve r al F r e n c h r e gions 4 out o f 1 3 r e gions h a ve c r e ated a p u b lic / p r i va te t h i r d - part y f i n anc ing c o m pany N e w e xp e r tise i n F i n ancing e n gineering f o r c o n dom iums h a s b e en d e ve loped 34 contracts signed, corresponding to 5000 apartments and more than 110 million in works value (equivalent to 1760 jobs/year) 78% reach the low energy building label performance 12

13 LESSONS LEARNT, WHAT WE SUCCEEDED ON Very good to be a public private company on the condominium sector: it brings trust Good to work with other companies when the expertise already exists (subcontracting of studies) Very important to offer the condominiums a single contact point during the whole project (5 years!) Strong politcal support from the left wing regional government that initiated the project and the right wing governemnent that won regional election in Dec Our company is small: we need to network, share experiences and possibly share services 13

14 LESSONS LEARNT, WHAT WE DID NOT YET- SUCCEED ON Third party financing has been long to implement because the legal national framework, check it TPF is still hard to implement because of surety obligation Decision making process is very long in condominiums: we still need to find way to shorten the whole business cycle (3 years of studies, 2 years of works) We have solutions for TPF financing on the medium term (4 years) but we need to find Doing that have never been always takes longer than you think If private sector does not address certain sectors, this is often because it is not a mature market yet 14

15 CASE STUDY 15

16 Equateur LANÇON, PARIS 13 ÈME Renovation programme Paris 13 Ve n t ilati o n a n d heat d istr i bution i m p r o vements Renovation of the boiler rooms Fuel system -> highly condensing gas system Solar thermal panels for hot water Renovation of the heat distribution system Humidity-sensitive ventilation type B Current consumption After-works consumption a p a r t m e n t s 239 k W h p e / m 2 / y e a r 99 k W h p e / m 2 / y e a r ( B B C R e n o v a t i o n ) I n s u l a ti o n a n d a r chitectural i m p r o vement External thermal insulation Roof insulation Double glazing of windows and shutter replacement Balcony creation 16

17 LANÇON, PARIS 13 ÈME Consortium leader and financial engineering Architect Thermal and fluid engineering agency 17

18 FINANCING PLAN Collective aids Re g i o n + A D E M E s u b s i d y Copro D u rable : Renovation cost: (not including works on private areas and optional works ) Individual aids A n ah (dwelling agency) & Re g i o n al C o u n c i l : Tax c r e d i t : Remainder : O w n e r s s e l f- f i nancing C o nventional l o ans and s o f t l o ans G r o u p l o an s u b s i d is ed b y the R egional C o u ncil 18

19 FINANCING PLAN Case study Family of 4: 1 couple & 2 children Living in a 3-bedroom apartment Changing their windows Cost (all taxes included):

20 FINANCING PLAN - EXAMPLE Household without ANAH subsidy 28% AMI Copro durable 55% Sustainable Tax credit 17% Remainder amount Collective loan subsidised by the Regional Council (2.31% TEG / 15 years): Net cost = 25/month* * After energy savings deduction

21 FINANCING PLAN : EXAMPLE Household with ANAH subsidy (low-income family) 22% Copro Durable subsidy 28% Sustainable developement tax credit Habiter Mieux (Region subsidy) 23% 4% 17% Habiter Mieux (ANAH) subsidy Remainder amount Collective loan subsidised by the Regional Council (2.31% over 15 years): net profit of 38/month* * After energy savings deduction

22 THANK YOU FOR YOUR ATTENTION Raphaël Claustre T h e s o l e r e s p o n s i b i l i t y f o r t h e c o n t e n t o f t h i s p r e s e n t a t i o n l i e s w i t h t h e a u t h o r. I t d o e s not n e c e s s a r i l y r e f l e c t t h e o p i n i o n o f the E u r o p e a n C o m m i s s i o n, w h i c h i s n o t r e s p o n s i b l e f o r a n y u s e t h a t m a y b e m a d e o f t h e i n f o r m a t i o n c o n t a i n e d t h e r e i n. 22