1 european investment bank / elena facility elena: a project preparation scheme juan alario,...

1European Investment Bank / ELENA Facility

ELENA: A PROJECT PREPARATION SCHEME

Juan Alario, Associate Director

European Investment Bank (EIB)

Regions for Economic Change

Brussels, DG REGIO 21 May 2010


Summary

1. Why ELENA?

2. Issues to prepare a city energy programme

3. What is ELENA?

4. Conclusions


1. Why ELENA?

Urban areas account for about 70% of the EU energy consumption and GHG emissions

Substantial investments required to reduce GHG emissions, notably in EE/RE in buildings and sustainable

urban transport. However, limited action at this stage.

ELENA aims at accelerating development of this investment potential

ELENA aims at developing more efficient ways to develop the potential, that can be replicated


2.1 Conditions for launching a city energy programme

1. Willingness to embark on a challenging new task?

2. Prepare a plan: go for a large programme to reduce transaction costs and attract investors’ interest

3. Think how to make projects bankable right from the beginning

4. Dialogue with potential investors and financers from the beginning


2.2 Sectoral focus of the city plan

Buildings:

Some RE can be developed in cities using existing support mechanisms to RE, such as PV

Part of the EE potential can be developed without grants (around 20% EE gains), but for the rest (building envelope) grants are needed.

Sustainable transport:

Generally, substantial grants are needed, e.g. for high efficient buses or electric cars


2.3 The approach

Creation of a Project Implementation Unit, focusing on investment implementation

The most promising approach seems to be using ESCOs

Ensure access to financing: the availability of grants influences project scope


2.4 Needs of technical assistance

Additional staff for the Project Implementation Unit

Technical studies: feasibility studies, energy audits,…

ESCO approach and contractual aspects

Preparation of tender specifications and tender negotiations


3.1 ELENA: Eligible entities

Beneficiaries: local and regional entities, or other public entities or regroupings thereof, including signatories of the Covenant of Mayors.

Eligible countries: EU, Norway, Iceland, Liechtenstein and Croatia

Part or all of the programme can be implemented by other entities than the above-mentioned, including private companies.


3.2 ELENA: Eligible investments in buildings

Public and private buildings, including social housing,

Street and traffic lighting,

RE in buildings,

Heat and cooling networks based on CHP or RE

Small CHP for buildings


3.3 ELENA: Eligible investments in transport

Increase EE or integration of RE in urban transport:

High EE buses, including hybrids,

Electric cars,

Investments to facilitate new, more energy efficient solutions to improve freight logistics;


3.4. ELENA: Eligible investments in local infrastructures to improve EE or use RE

Smart electricity grids

ICT

EE urban equipment

Inter-modal transport facilities

Refueling infrastructure for alternative fuel vehicles, including charging infrastructure for electric cars


3.5 Investments not eligible for ELENA

Investments related to industry; reductions of GHG emissions related to industrial relocalisations


3.6 Minimum conditions to apply for ELENA

Need first to have identified an investment programme in the eligible areas

Bankability of the potential investment programme

The ratio between investment and ELENA assistance has to be minimum 25


3.7 Costs eligible for ELENA

Additional staff hired by the beneficiary

Feasibility studies

Energy audits

Tender and contract preparation

Other TA needed to implement the programme, excluding hardware costs.

ELENA funding can cover maximum 90% of TA costs


4.1 Conclusions (1)

Need to explain how ELENA works as it is innovative

ELENA has raised substantial interest

At present most of the ELENA pipeline is in public buildings and using ESCOs

Complementing ELENA with financing instruments to enlarge ELENA scope to other sectors:

Transport projects

Social and private buildings

ELENA projects have substantial opportunities to be replicated and to help spread good practices


4.2 Conclusions (2)

Few public entities have the willingness and capacity to implement large EE/RE city/regional programmes: need to exchange experiences

To be effective TA has to be linked to implementation (investments)

Project preparation support (botton-up) is a necessary complement to legislative and financing support (top-down)


To get more information…

http://www.eib.org/elena

[email protected]

Thank you for your attention

http://www.eib.org/elena

mailto:[email protected]

1 european investment bank / elena facility elena: a project preparation scheme juan alario,...

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eligible investments

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high ee buses

sustainable urban transport