the smart finance for smart buildings initiative (sfsb) · aggregation services and pda. ... change...

CLEAN ENERGY FOR ALL EUROPEANS

The Smart Finance for Smart Buildings Initiative

(SFSB)

Axel Bierer, DG ENERGY

Financing energy efficiency in Germany, France and AustriaFrankfurt, 5 December 2018


Annual investments needed to reach EU energy and climate goals by 2030(1)

REF2016(BAU)

EUCO30 Financing challenge

Industry 15 19 4Buildings - households 127 214 87Buildings - tertiary 23 68 45Transport 705 736 31Grid 34 36 2Generation and industrial boilers

33 42 9

TOTAL 937 1115 178

Demand side

Supply side

Investment expenditures in billion EUR (average annual

2021-2030)

Sheet1

Investment expenditures in billion EUR (average annual 2021-2030)REF2016(BAU)EUCO30Financing challenge

Demand sideIndustry15194

Buildings - households12721487

Buildings - tertiary236845

Transport70573631

Supply sideGrid34362

Generation and industrial boilers33429

TOTAL9371115178


• Supporting the project pipeline at EU and local level

• Project DevelopmentAssistance facilities

• "One-stop-shops"

Assistance and aggregation

De-risking

• Deploying Financial Instruments and flexible energy efficiency and renewable financing platforms

• Building on blending of funds (EFSI with ESIF)

• Understanding the risks and benefits for financiers and investors

• The De-risking Energy Efficiency Platform

• Commonly accepted underwriting framework

MAJOR GOALS

More effective use of public funds

THE "SMART FINANCE FOR SMART BUILDINGS" INITIATIVE


Pillar I: More effective use of public funds deploying financial instruments

• Making more use of financial instruments, to achieve high leverage ratios.

• Flexible financing platforms at national level, mixing different strands of public financing (i.e. European Structural and Investment Funds (ESIF) and the European Fund for Strategic Investments (EFSI).


a) Effective use of public money – the Guarantee Facility

• combination of funds in different risk tranches to provide more risk protection to commercial banks and increase attractiveness of the product to final recipients,

• high leverage level: trigger additional financing from private sources (from 4 upwards).

b) no need for national co-financing

c) easy to implement: • no need for a new or revised ex ante assessments;• if ESIF contributes to existing instrument (e.g. EFSI): no need to

select new fund managers;

d) access to technical assistance from ELENA, ESIF and national resources;

Flexible Energy Efficiency Platform (I)


e) Enabling and supporting banks' transition tosustainable finance providers:• banks can benefit from EIB triple-A rating by having

access to attractive financing conditions;• tailor made solutions: renovation loans combined with

capital grant at the level linked with risk portfolio forparticular market;

f) unlocking private financing on the long term:• know-how to financial institutions;• Standardisation;• Establishing a functional financial market ready to

trigger sufficient private capital to reach EU andnational energy/climate objectives;

g) Non-financial sector impact:• local jobs, growth, reduced costs, security of supply

and decrease of pollution.

Flexible Energy Efficiency Platform (II):


Pillar I continued: More effective use of public funds deploying financial instruments

• Database to understand how existent public funds in Member States can be used to support energy efficiency in Europe will be published.

An initiative to make the use of Energy Performance Contracting more accessible to the public sector (updated Eurostat guidance on the accounting treatment of Energy Performance Contracts in 2017; new practitioners guide published in May 2018).

• Sustainable Energy Investment Forums covering all EU countries


Pillar II: Providing aggregation and assistance for project development

• Reinforced Project Development Assistance (PDA) facilities at the EU level to help project promoters bring their ideas to maturity.

• ELENA, via EIB (PDA facility funded through the European Commission’s Horizon 2020 programme)

• PDA calls launched by EASME for smaller projects

• Development of dedicated local or regional one-stop-shops for project developers.


Encourage local/regional one-stop-shops

Audit

DecisionWork supervision Financing

solution

Energy Performance

tracking

Contact

Aggregation services and PDA


Pillar III: De-risking energy efficiency investments

• Change the risks perception related to energy efficiency investments - in collaboration with the Energy Efficiency Financial Institutions Group (EEFIG):

• The De-risking Energy Efficiency Platform (DEEP), an open source database containing real performance data of energy efficiency projects (over 10.000 energy efficiency projects already).

• An Underwriting toolkit on the value and risk appraisal of energy efficiency investments (released on 22 June 2017).


THE ENERGY EFFICIENCY FINANCIAL INSTITUTIONS GROUP (EEFIG)

What else?

• The EEFIG starts its next phase with:1. The first two working groups, on

• Energy efficiency tagging and taxonomy, and• Financial performance of energy efficiency loans

2. Plenary meeting on 19 February 2019- Save the date! Organised back to back with the Covenant of Mayors Investment Forum, in Brussels

UPCOMING PUBLIC CONSULTATIONS ON SUSTAINABLE FINANCE

• Public consultation on taxonomy to start soon

http://www.eefig.eu/index.php


Policy context: wider efforts to scale up sustainable finance

Nearly three-quarters of the EU’s 2030 clean energy investment gap (around €130 billion per year) is needed for energy efficiency in buildings.

Recommendations of the High Level Expert Group on Sustainable Finance to the Commission, on energy efficiency : To examine further how energy efficiency investments improve underlying asset value.To consider the wider impact of energy savings for financial risk management

In March 2018 the Commission adopted an Action Plan for Financing Sustainable Growth.

In May 2018: Proposal for a regulation with principles and scope for an EU taxonomy (classification of sustainable activities)

Public consultation on taxonomy to start soon

Q3 2019: Expected adoption of the regulation; Platform on sustainable finance to be operational


• Expert group composed of 35 experts, established in June 2018 to assist the Commission in the development of:

• Technical screening criteria for environmentally sustainable economic activities under the EU taxonomy;

• an EU Green Bond Standard;

• Minimum standards for the methodology of "low carbon" and "positive carbon impact" indices; and

• metrics allowing improving disclosure on climate-related information in Annual reports.

The Technical Expert Group on Sustainable Finance


#EnergyUnion

Thank you!

Slide Number 1Annual investments needed to reach EU energy and climate goals by 2030(1)Slide Number 3Pillar I: More effective use of public funds deploying financial instruments Slide Number 5Slide Number 6Pillar I continued: More effective use of public funds deploying financial instruments Pillar II: Providing aggregation and assistance for project developmentAggregation services and PDAPillar III: De-risking energy efficiency investmentsSlide Number 11Policy context: wider efforts to scale up sustainable financeThe Technical Expert Group on Sustainable Finance�Slide Number 14

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