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EIB financing for energy efficiency
Anton Rop, Vice-PresidentEuropean Investment Bank
ICPE Conference Ljubljana, 24 October 2012
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1678 Mtoe
20% objective
status today
1842 Mtoebusiness
as usual
2020
Projections from 2007
Projections from 2009
20% Energy saving objective
1474 Mtoe
* Gross inland consumption minus non-energy uses
Primary energy consumption*, Mtoe
1400
1450
1500
1550
1600
1650
1700
1750
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1850
1900
2005 2010 2015
The challenge of meeting the 20% Energy Saving Target
GAP
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Many challenges and opportunities remaining!
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The European Investment Bank (EIB) –European priority objectives
Within the Union:
Cohesion and convergence
Small and medium-sized enterprises (SMEs)
Environmental sustainability
Knowledge Economy
Trans-European Networks (TENs)
Sustainable, competitive and secure energy
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EIB in supporting the EU energy policy
Five priority lending areas:
- Renewable energy
- Energy efficiency
- RDI in energy
- Diversification and security of internal supply (incl. TEN-E)
- External energy security and economic development
EIB Energy Policy Document (currently being updated.)
EIB has substantial experience in energy technologies
Broad range of financial products
Technical Assistance available for project preparation
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EIB Lending in Energy in the EU 2008-2011
EIB lending for EE and RE, 2008-2011 in million EUR
Significant increase in lending between 2008 and 2010
In 2011, smaller but more projects supported than in 2010
Mainstreaming of EE in all EIB operations
In addition, JESSICA funds support over EUR 190m in EE projects
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EIB Lending in Energy Efficiency 2008-2011
Cumulated EIB lending in EE by sector 2008-2011
Projects in buildings represent 35% of EIB lending in EE
Large number of projects at local level (e.g. Bucharest, Chieti)
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EIB project example – Thermal rehabilitation of residential apartments in Romania
The objective of the project is to renovate 270 buildings (23000 apartments) from 2010 until 2012.
The project is expected to reduce the energy consumption of the buildings by around 50%.
The project supports national and European objectives related to improving energy efficiency and climate change and security of energy supply objectives.
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Summary of funding opportunities
EPEC – European PPP Expertise Centre to strengthen the organisational capacity of the public sector to engage in Public Private Partnerships transactions
Technical Assistance is available to develop large scale ESCO programmes (ELENA)
JASPERS – Joint Assistance to Support Projects in European Regions to prepare projects supported by EU Structural and Cohesion Funds
Structural Funds can also be used via JESSICA funds
Green for Growth Fund – Southeast Europe (GGF)
A new facility has been developed focussing especially on energy efficiency and support to ESCOs (European Energy Efficiency Fund – EEE-F)
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PPPs and Investment in Energy Efficiency & Renewables
Major challenges in achieving the EU 20% target for EE
PPPs : opportunities for leveraging public funding & risk transfer
PPPs and Energy Performance contracting models
Public sector requirement for long-term contract delivery
Need for integration of the build and operating phase
Proper maintenance and life cycle maintenance is key
Significant opportunities for combining Energy Efficiency with RE
PPPs provide for a variety of innovative funding models10
European Investment BankProvision of Technical assistance
EC-EIB cooperation to support local and regional authorities to reach 20-20-20 targets; Grant facility: managed by EIB; funded by EU budget (CIP/IEE programme).Application to Energy Efficiency; local renewables; clean transport.Market replication focus; Minimum investment leverage required Budget 2009 - 2011: EUR 49m (allocations can be made until end 2013)Envisaged budget 2012: EUR 22m
European Local ENergy Assistance -- ELENA
Example: RE:FIT, London
ProposalRetrofitting of public buildings owned by several London Boroughs, Colleges, Universities and Hospitals
Planned investment: EUR 115m
Expected results: 4.69 GWh energy/year saved
Main TA feature:Project Development Unit, performance-based to ensure value for money
Current results (after 1 year of operation)14 mini competitions for ESCOs launched
Over EUR 12m invested in 150 buildings
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Example: Electrobus, Barcelona
ProposalBus fleet renewal: retrofitting 220 existing buses into hybrid buses and integrating electric and hybrid vehicles
Planned investment: EUR 164m
Expected results: 61.4 GWh of energy savings and a reduction of 16 400 CO2-eq [t] by the end of the three year project period
Main TA features: Technological studies on electric and hybrid buses
Support in the definition of tailored financial instruments to finance the bus fleet renewal
Current results (after 15 months of operation):TA on track
First investments scheduled for end 2012
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The Berlin Energy Saving Partnership…demonstrates how the PPP concept used successfully for energy efficiency
Source : Berliner Energieagentur Gmbh
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The Berlin Energy Saving PPP – Key success indicators
1,300 buildings refurbished/ improved
EUR 60m invested in energy efficiency improvements 25% energy saving (EUR 2.4/year) saving
C02 = 60,000 t/year reduction
Further saving potential = ~30%
refurbished/ improvedQuelle : Berliner Energieagentur Gmbh
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JESSICA Joint European Support for Sustainable Investment in City Areas
Joint initiative of EC and EIB since 2006, supported by CEB– Support the establishment of a system of Urban Development
Funds (UDFs) across the EU
– Utilising resources of EU Structural Funds through financial engineering; revolving instruments
UDF as an “impact fund for territorial transformation” Policy-driven, geographically-focused and planning-led
investment vehicle supporting transformation processes of cities
EIB role - TA, feasibility studies, management of UDFs– Managing contributions from Operational Programmes on behalf of
MAs;
– Arranging selection of / establishment / investments into UDFs,
– which subsequently invest in Urban Projects eligible under Ops
– Possible co-investment into or alongside UDFs
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JESSIC JESSICA A
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Green for Growth Fund - Southeast Europe
Investments in financial institutions
Investments in non-financial institutions
Investments in RE Projects
• founded December, 2009 with committed capital of EUR 128m
• initiators: EIB & KfW; additional founding investors - EBRD, IFC, EC, BMZ; TA donors: EC, BMZ, OeEB
• current committed capital: EUR 201m (includes FMO and NIF)
• target size: EUR 400m within 4 years
• Mission: Foster energy efficiency and renewable energy in Southeast Europe, including Turkey, and the European Neighborhood region, resulting in a reduction in energy consumption and/or CO2 emissions of at least 20%
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Green for Growth Fund - Southeast Europe
More information:
www.ggf.lu
• target partners (countries of operation): 13
• year-end 2012 portfolio: EUR 143m
• works with Financial Institutions to finance EE & RE measures, and makes direct investments into RE projects
• provides Technical Assistance to its partners to build green energy capacity in the local finance sectors, and to bring international best practices to small-scale renewable energy projects in the region
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European Energy Efficiency Fund (EEEF)
What is EEEF?
Why EEEF?
Objective
— EEEF aims to provide market based financing for commercially viable public energy efficiency (EE) and renewable energy (RE) projects within the European Union
— It contributes with a layered risk/return structure to enhance EE and foster RE in the form of a targeted private public partnership, primarily through the provision of dedicated financing via direct finance and partnering with financial institutions
— … amendment of the European Energy Programme for Recovery Regulation (a)
— … commitment of the EU member states to achieve the 20/20/20 goals, cutting GHG emissions by 20%, increasing RE usage by 20%, and cutting energy consumption through improved EE by 20%
— … substantial potential for EE and small scale RE in the European public sector
(a) Regulation (EU) No 1233/2010 of the European Parliament and of the Council amended the European Energy Program for Recovery
Regulation (EC) No 663/2009 establishing a program to aid economic recovery by granting Community financial assistance to projects in the field of energy. Uncommitted funds will be used for the creation of the EEEF.
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EEEF : Key Acctivities
Fund registered in Luxembourg
initial capitalisation of EUR 265m :
European Commission: EUR125m
European Investment Bank: EUR 75m
Deutsche Bank: EUR 5m Cassa de Depositie: EUR 60m
additional commitments planned to raise targeted fund size to approx. EUR 800m
geographical focus on EU 27 member states
Key data of EEEF Primary target countries
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Energy saving and EE investments:
— Public and private buildings
— Investments in high energy efficient combined heat and power
— Local infrastructure, including efficient lighting, electricity storage solutions, smart metering, and smart grids,
— Investment in innovation for better outcomes in energy efficiency and renewables
Investments in RE sources:
— Distributed generation from local RE sources, to medium and low voltage (110kV and lower) distribution networks
— Smart-grids enabling higher RE sources uptake
— Energy storage to allow storing part of the energy produced from intermittent sources during low-consumption hours and feeding this energy back at times of peak-demand
— Decentralised energy sources can also be the injecting of locally produced biogas into the natural gas network and
— Microgeneration from RE sources
Investments in clean urban transport:
— Clean urban transport to support increased EE and integration of RE sources
EEEF: Portfolio Strategy
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For more information…
http://www.eib.org
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