Facilitating Finance: A case for the Super ESCO. Jeffrey Beyer EU-GCC Workshop 3 May 2017

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1 Facilitating Finance: A case for the Super ESCO Jeffrey Beyer EU-GCC Workshop 3 May 2017

2 Overview Super ESCO overview Barriers faced by How Super can overcome barriers Focusing on finance How Super work with others

3 Overview of the Super ESCO concept A standard definition of Super ESCO has emerged and is generally agreed Entity that is established by the government Functions as an ESCO for the public sector market Supports the private sector ESCO market through capacity building and project development Has enough money to undertake public sector energy efficiency projects and to leverage commercial financing Works with banks to unlock project financing May create financial instruments to support

4 Energy Service Companies face barriers Financin g High transactio n costs Clients and banks unaware of ESCO model Barrier s faced by Hard for clients & to match up Clients and banks don t trust Lack of M&V standard s

5 Super can help overcome barriers Provide credit enhancement products Work with public sector re: budget rules Tell banks about risks; support tech l DD Consolidate projects into saleable portfolio Standardise EPCs; support energy audits Financin g High transactio n costs Clients and banks unaware of ESCO model Barrier s faced by Hard for clients & to match up Clients and banks don t trust Lack of M&V standard s Marketing campaigns to raise awareness ESCO accreditation; market supervision Develop and apply M&V standards Operate a central tendering platform

6 Financing is an important component Provide credit enhancement products Work with public sector re: budget rules Tell banks about risks; support tech l DD Consolidate projects into saleable portfolio Partial loan guarantees Subordinated finance Debt Service Reserve Fund Loan Loss Reserve Fund Overcome public sector restrictions on capital spending vs. operating costs by developing special contracts or offering project financing. Educate banks about real risks. Support banks by providing technical due diligence. Existence of a Super ESCO builds confidence in the market. A Super ESCO can buy and package receivables from similar projects, then sell them to institutional investors, freeing up operating capital.

7 Super work with other parties to facilitate projects and finance Government (owner of Super ESCO) Donor agencies Technical assistance, capital Initial capital Super ESCO Contracts; payment based on savings; credit guarantees Savings guarantee Private 100% financing Payments from savings Public or private sector projects EE services

8 Banks can also participate in the structure Government (owner of Super ESCO) Donor agencies Loan repayment Technical assistance, capital Loan Initial capital Co-financing Super ESCO Contracts; payment based on savings; credit guarantees Savings guarantee Payments from savings Private Private banks / Financial institutions Public or private sector projects EE services

9 Contact Us Jeffrey Beyer, Director Beyond C T: +44 (0) E: jeffrey.beyer@beyond-c.co.uk Skype: jeffjohnbeyer