Innovative financing for sustainable energy in practice

Transcription

1 SUSTAINABLE ENERGY WEEK June 2016 Innovative financing for sustainable energy in practice Wednesday 15 June :00 10:30 De Gasperi room, Charlemagne building

2 Speakers Didier GAMBIER Head of Department EASME European Commission Paul HODSON Head of Unit DG ENER European Commission Louise WHITE European Investment Bank Peter SWEATMAN Chief Executive Climate Strategy James VACCARO Head of Corporate Strategy Triodos Bank Françoise RÉFABERT CEO Vesta Conseil&Finance Steven FAWKES Senior Adviser Investor Confidence Project Jessica STROMBACK Chair Joule Assets Europe Claude TURMES Member of the European Parliament

3 Paul HODSON Head of Unit Energy Efficiency DG ENER, European Commission

4 EIB Support to Sustainable Energy Finance Louise White European Investment Bank Innovative Financing for Sustainable Energy Brussels 15 June 2016

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 European Investment Bank 5

6 EIB provides significant financing for Sustainable Energy at EIB ,5 6,4 5,9 Energy Efficiency 5 EUR bn ,3 1,1 3,2 2,2 2,3 3,6 3, 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 European Investment Bank 6

7 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 European Investment Bank 7

8 Project example: EFSI and ELENA PICARDIE 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. df European Investment Bank 8

9 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 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

10 Thank you for your attention Further information at 10

11 James VACCARO Head of Corporate Strategy Triodos Bank

12 Françoise Réfabert Vesta Conseil & Finance

13 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

14 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 consumers against 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

15 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 after completion of works Build a track record of cost of risk and measured energy savings Experimentation phase should allow to share this track record 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 guarantee mechanism Energy Transition Law provides for a national guarantee fund which is presently directed to lowest income households Debt aggregation vehicle would allow third-party financing companies to act as originators and reduce their balance sheet size Could induce banks to extend their lending offer Energy renovation project Energy renovation project Energy renovation project Refinancing Green bond issuance Third-party financing companies Debt Fund (Securitization entity) Labelled Funds Long term loans Assignment of receivables Repayment Public guarantee (State, regions)

16 The Investor Confidence Project Dr. Steven Fawkes Brussels 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 use that may be made of the information contained therein.

17 Lack of standardization in EE results in: Greater performance risk Uncertainty limiting demand Higher transaction costs Difficult to build capacity Difficult to aggregate

18 Investor Confidence Project Protocols C x Protocols standardize best practice in project development BASELINING SAVINGS COMMISSION OPERATIONS MEASUREME Existing Building and Model File documentation Cx Plan BMS Points M&V Model Drawings Calibration Data Cx Authority Fault Plan Regression Model Weather File Bid Packages Test Procedures Maintenance Plan Adjustments Energy Usage Certifications Facilities Req. Impact Energy Rates Baseline Occupancy Adjustments

19 ICP EU Protocols Tertiary Apartment Large Whole building retrofit, dynamic modeling 6 European Protocols available Standard now and being applied to a range of projects and Whole building retrofit, no dynamic modeling programmes across Europe Targeted Single or limited number of EE measures

20 Reducing Transaction Costs for Sustainable Energy Asset Investments Jessica Stromback June 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 use that may be made of the information contained therein.

21 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.

22 Project Goal The project aims to enable the finance of sustainable energy assets by deploying independent, standardised project evaluation and project optimisation tool. Making Finance Easy 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; 03/02/16

23 Final Outcome 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.

24 Thank You! Jessica Stromback Chairman Joule Assets Europe AB Mobile

25 Speakers Didier GAMBIER Head of Department EASME European Commission Paul HODSON Head of Unit DG ENER European Commission Louise WHITE European Investment Bank Peter SWEATMAN Chief Executive Climate Strategy James VACCARO Head of Corporate Strategy Triodos Bank Françoise RÉFABERT CEO Vesta Conseil&Finance Steven FAWKES Senior Adviser Investor Confidence Project Jessica STROMBACK Chair Joule Assets Europe Claude TURMES Member of the European Parliament

26 Claude TURMES Member of the European Parliament

27 MEET - NETWORK - COLLABORATE