De-risking Energy Efficiency Investments
Energy efficiency is not yet considered as an attractive investment by the financial sector which limits the possibility to use external private finance on top of equity of project owners and available public funding. The lack of statistical data on the actual energy and costs savings achieved by energy efficiency investment projects, as well as on payment default rates, results in financial institutions attributing high risk premiums to energy efficiency investments. Whereas energy efficiency investments are usually expected to be paid back exclusively through the reduction of the energy bill, there is increasing evidence that non-energy benefits play a key role in the decision to invest in energy efficiency. This includes for instance increased building value, lower tenant turnover or vacancy rates etc.
The workshop is organised within the framework of Sustainable Places 2020 conference and will present innovative solutions, developed by the aforementioned H2020 research projects, aiming to make energy efficiency investments more attractive for the financial sector.
In particular, innovative solutions that will be presented are among others the following:
- labelling schemes, project rating methodologies and risk assessment tools, standardised legal and financial structures of assets (loans, guarantees, energy performance contracts etc.);
- gathering, processing and disclosing large-scale data on actual financial performance of energy efficiency investments, in order to create a track record for energy efficiency in different sectors;
- further integration of non-energy benefits in project valuation, in particular in the building sector, leading to evolution of existing financial products or creation of new targeted products;
- targeting institutional investors (e.g. public pension schemes) in order to increase the share of their funds invested in energy efficiency, or to develop specific funds or investment products;
- supporting the integration of energy efficiency in portfolio management strategies for institutional investors and/or fund managers, including through re-definition of fiduciary duties.
In the workshop, the Triple-A approach on assessing the financing instruments and risks at an early stage of an energy efficiency project, on identifying the “Triple-A” investments, based on selected key performance indicators and on assign the identified investment ideas to possible financing schemes will be presented.
Participating European Commission Project Officer : Stavros Stamatoukos, Project Advisor at EASME
Chairs of the workshop : Annalisa Andaloro (EURAC) & Rachel Desmaris (R2M Solution)
Thursday 29th October
13:00 - Welcome statement – EURAC - Annalisa Andaloro
13>:10 - Introduction of the overall objective of the workshop – R2M – Rachel Desmaris
13:20 - EENVEST – EURAC - Annalisa Andaloro
13:30 – TRIPLE-A – NTUA - Haris Doukas
13:40 - QUEST – SYNAVISION - Stefan Plesser & LINKS Foundation - Sergio Olivero
13:50 – Discussion on horizontal questions – All – moderated by R2M – Rachel Desmaris
- Horizontal questions proposed by EENVEST: What are the financial and technical risks to invest in an energy building renovation? How to evaluate them? What is the impact on the property value of the energy renovation?
- Horizontal questions proposed by QUEST: Which are the key incentives for energy efficiency investments? Which factors could help investors in their decision-making on energy efficiency investments? Which kind of financial risks originate from technical issues?
- Horizontal questions proposed by Triple-A: How to assess the financing instruments and risks an early stage of an energy efficiency project? How to agree on the “Triple-A” investments, based on selected key performance indicators? How to assign the identified investment ideas with possible financing schemes?
14:20 – Identification of cooperation opportunities for upcoming months, and next steps - R2M – Rachel Desmaris
14:25 - Conclusion – EURAC - Annalisa Andaloro & Stavros.STAMATOUKOS European Commission
14:30 – End of the session
Stay tuned for more information!