EIB Financing of Energy Efficient Lighting Elisabetta Cucchi Policy - - PowerPoint PPT Presentation

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EIB Financing of Energy Efficient Lighting Elisabetta Cucchi Policy - - PowerPoint PPT Presentation

May 20, 2023 175 likes •425 views

EIB Financing of Energy Efficient Lighting Elisabetta Cucchi Policy Officer Institutional Strategy Department Brussels 10 December 2013 The European Investment Bank (EIB) Long-term finance promoting European objectives EIB was created by the

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EIB Financing of Energy Efficient Lighting

Elisabetta Cucchi Policy Officer Institutional Strategy Department Brussels 10 December 2013

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The European Investment Bank (EIB)

Long-term finance promoting European objectives

Economic and Social Cohesion and Convergence Implementation of the Knowledge Economy Development of Trans-European Networks (TENs) Support for Small and Medium Enterprises (SMEs) Environmental sustainability Supporting Sustainable, Competitive and Secure Energy

EIB was created by the Treaty of Rome in 1958 EIB is a not-for-profit, policy driven institution EIB is 100% owned by the 28 EU Member States EIB signed loans amounting to EUR 52bn in 2012 (90% in EU) EIB uses its special expertise and resources to make a difference to the future of Europe and its partners by supporting sound investments which further EU policy goals

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EIB support to Energy Efficiency

EIB lending to energy efficiency averaging EUR 1.3bn/year since 2008 Focus on buildings (50%), energy (30%) and industry (15%) Recent EIB Energy Review prioritises “no regrets” sectors : energy efficiency, renewable energy, networks and RDI

EUR bn

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EIB Financing Facilities

EIB provides two main facilities: Direct Loans Large-scale projects (more than EUR 25m) Intermediated Loans Small and medium-scale projects (particularly to SMEs) via national and regional intermediary banks Lending decision remains with the financial intermediary

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Joint Financial and non-Financial Instruments

In addition to its traditional lending activity, EIB is complementing its action towards the development of the EE financing market in the EU with a number of initiatives in cooperation with the European Commission, notably:

EEEF: European Energy Efficiency Fund JESSICA: Joint-European Support for Sustainable Investments in City Areas. ELENA: European Local Energy Assistance EPEC: European PPPs Expertise Centre DEEP Green: Debt for Energy Efficiency Projects Green platform (under discussion) RSFF: Risk-Sharing Finance Facility

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Focus on Lighting

Lighting usually financed as part of broader investment programmes SSL/LED is one EE technology choice Issue of high initial cost vs. long-term savings One option for this could be Energy Performance Contracting / use of ESCO business model LED lighting in buildings could be one of the technology choices by the ESCOs

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European Energy Efficiency Fund (EEEF)

EUR 265M (EUR 125M EERP, EUR 75M EIB, EUR 60M CDP and EUR 5M DB)

  • Managed by Deutsche Bank (www.eeef.eu)
  • 70% of the investment shall be targeted towards Energy Efficiency
  • Beneficiaries: Local & regional Public authorities, but PPPs are possible.
  • Financing in form of loans, guarantees, forfeiting schemes (to finance ESCO

projects)…

  • Technical assistance (grant) is available to structure projects (EUR 20M).
  • Results to date: 6 projects (EUR 79M) + 8 TA operations (EUR 6.3M) approved

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EEEF - Eligibility and project structures

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EEEF Case study: Building retrofit University of Applied Sciences - Munich, Germany

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JESSICA at a glance

Joint European Support for Sustainable Invest. in City Areas Objective: invest Structural Funds in a revolving way to urban projects, including EE

  • Initiative of the EC (DG REGIO) launched in 2006 together with EIB and CEB to establish a

common approach for financing urban development and strengthening the urban dimension in cohesion policy through repayable assistance

  • Investments in sustainable urban transformation (brownfields/city regeneration, renewable

energy, energy efficiency, clusters’ development, transport, tourism/public service infrastructure)

Overall JESSICA objectives

  • To increase Structural Funds’

efficiency and productivity

  • To increase leverage
  • To exploit new partnerships

and synergies

Use of innovative financial instruments allowing for the reutilization of resources invested in the urban sector Mobilize public/private resources for investments in projects being part of an integrated urban development scheme Use

  • f

managerial, financial and implementation competencies of the private sector and IFIs such as EIB

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URBAN DEVELOPMENT FUND URBAN DEVELOPMENT FUND EUROPEAN COMMISSION Structural Funds EUROPEAN COMMISSION Structural Funds MEMBER STATE Via a designated Managing Authority MEMBER STATE Via a designated Managing Authority Holding Fund Holding Fund Projects forming part of an Integrated Plan for Sustainable Urban Development

  • ptional

OTHER INVESTORS (Public & Private) OTHER INVESTORS (Public & Private) IFIs/Public Agencies/ Banks IFIs/Public Agencies/ Banks

Investment (equity, loan or guarantee)

CITIES CITIES

JESSICA structure

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18 JESSICA HFs currently operating

in 10 Member States

EUR 1.8bn in

commitments

Holding Funds (HFs) 42 agreements signed to date EUR 1.5bn committed to UDFs Urban Development Funds (UDFs)

3 1 2 1 3 5 1 1 1 5 7 3 7 2 2 5 6 2 1

JESSICA HF in the Member States 39 18 JESSICA UDFs in the Member States 2 JESSICA Technical Assistance / Fund and Structuring Services

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JESSICA state of play

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JESSICA: focus on energy / EE

Possible types of JESSICA energy projects: Renewable Energy

  • Solar, biomass, wind

Clean Transport

  • Electric vehicles, including automobiles,

motorcycles and bicycles

  • Fleet management (improvement of

energy efficiency)

Energy Efficiency, Co-generation and Energy Management

  • Renovation or extension of existing

district heating or cooling networks; high-efficiency combined heat and power

  • Energy savings/energy efficiency in

buildings

JESSICA track-record in EE to date:

Out of the 18 Holding Funds (EUR1.8bn) with EIB as HF Manager/ ~ 35% potentially allocated to EE related Urban Projects:

  • Lithuania, EUR 227M HF: EE in housing
  • London, EUR 48M UDF: EE and small scale RE

in public buildings

  • Italy, EUR 86M UDF: EE and small scale RE

and transport projects

  • Spain, EUR128M HF: National HF for EE/RE
  • EE projects may also be financed through as

part of urban regeneration investments in “traditional” UDFs (e.g. Portugal, Bulgaria, Scotland, Poland)

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Background: Replacing street lighting in the city of Ponferrada to improve energy efficiency, in accordance with the national Energy Efficiency and Savings Plan 2011-2020 Best practice because…

Significant reduction in energy consumption and in CO2 emissions Introduction of new technology Cost savings of approx. EUR 1 mil. in the first year alone

Market gap

Current solution: inefficient, expensive to maintain, high light pollution Long-term project – 12y Preferential interest rate – 50% JESSICA contribution

JESSICA project example: Public Lightning Replacement in Ponferrada (Spain)

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ELENA at a glance

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ELENA – eligibility and activities

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ELENA - ESCO Project Development

Supporting cities:

  • City of Paris
  • Greater London Authority (RE:FIT, DEPDU)
  • Villa Nova de Gaia
  • City of Ljubljana
  • Bristol

Supporting provinces and small municipalities:

  • Province of Barcelona
  • Province of Milan
  • Province of Modena
  • Province of Chieti
  • Province of Padova
  • Region of Murcia
  • Lisbon Region
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The European PPP Expertise Centre (EPEC) is a unique cooperative initiative of the EIB, the EC as well as EU Candidates and MS.

Specific activities in

EPEC and Energy Efficiency

EE Mandate: To raise the awareness of local, regional and national authorities in the areas of energy efficiency and renewable energy improvements in housing and other types

  • f buildings

Goes beyond EPEC’s usual focus on PPPs

Materials: guidance and factsheets

  • EE in buildings
  • Street-lighting
  • Cohesion Policy
  • ESCOs and EPC
  • Information on

financing for EE Knowledge-sharing

  • Dedicated website
  • www.eib.org/epec/ee
  • Case-study database
  • Contacts database
  • Stakeholder cooperation

Events

  • Workshops
  • Roundtables
  • Seminars
  • Conferences

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DEEP Green

Banks Compartment

DEEP Green Initiative

Utilities Compartment ESCOs Compartment Public sector Compartment

  • Debt for Energy Efficiency Projects Green Platform (DEEP GREEN

Platform).

  • Structured in four different lines of products (“compartments”) to cover the

diverse financing needs of the key players involved in the EE market.

  • Targets aggregation and de-risking of EE projects, key barriers to the

financing of the EE market

  • Aim at increasing financing availability for EE projects by further developing

EIB and commercial bank lending activity to EE

  • Focus on 1st compartment as a first step

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Direct Lending Indirect Lending / Financing

EU

Corporate / Project Financing

Senior Loans (pari passu) Subordinated Debt Financial Intermediaries (extend lending capacity) Risk Sharing Co-financing

1

2

Aaa Aa A (Baa3) Ba B

RSFF

[up to EUR 10bn assuming leverage of 5.0x ]

Risk Sharing Finance Facility (RSFF)

RSFF Value Added Proposition Competitive terms and pricing Long Maturities of up to 10 years Large single loan sizes (< EUR 300m) Strong technology/industry expertise No cross selling / Take and hold strategy Signaling Effect: EIB as quality stamp

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RDI in Manufacturing – What can be financed?

R&D R&D programmes (typically over 3 to 4 years); Eligible costs R&D Opex, such as personnel costs, contract research, consumables, overheads; R&D Capex, such as facilities, equipment, acquisition of tangible & intangible assets, if a prerequisite. Innovation Capital expenditure related to the first commercial launch Deployment of KETs Eligible costs Prototypes & pilot plants; First of a kind production lines, Application of advanced manufacturing systems, Deployment of advanced and efficient processes.

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RSFF Results to date (3Q 2013)

To date direct RSFF operations have been signed in 23 countries.

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RSFF Vision for MFF 2014-2020

How do the new initiatives fit into the EIB Group product offering?

EIB Global Loans

EUR 7.5m EUR 25m EUR 300m

RSI: Innovative SMEs CIP: SMEs

High RISK Low EUR 25K

EIB/EIF MCI EIB Investment Loans/Guarantees

EIB RSFF Individual RDI Loans

Fund of Funds

Focus: SMEs (40% Buy-Out)

  • Av. Ticket Size: EUR 1.8m

RSFF GFI

Direct (Co-)Investments Pure RDI Invest. Focus Mid-Caps only

  • Av. Ticket Size: EUR 15m

SIZE OF SINGLE TRANSACTION Funding

Pre-seed Seed Funding Start-up / Mezzanine/Growth Commercialization / Industrialization Growth / Stability

Phases 1st Valley of Death 2nd Valley of Death

EIF Fund of Funds Approach Debt PF Guarantees EIB RSFF (EC) EIB Own Capital Legend:

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LED lighting in buildings could be one of the technology choices by the ESCOs EIB financing is available for larger and smaller projects including via specialized funds (i.e. EEE-F) Technical Assistance is available to develop large scale ESCO programmes (ELENA) Currently ELENA supports ESCO project development in excess of EUR 500 million potential investment opportunities Further advice via EPEC on street lighting and EE PPP structures EIB support to RDI and manufacturing is also available

Summary