RETROFIT R EVOLVING LOAN GUARANTEE FUND Financing Eco-Refurbishment

1. RETROFIT REVOLVING LOAN GUARANTEE FUND Financing Eco-Refurbishment Global Environmental Social Business - GESB Aniko Dobi-Rozsa and Adrian Balaci 22 February, 2012 London

2. Structure of presentation Background RRLGF Structure RRLGF Portfolio Key messages

3. Background 12 years experience in developing, managing and supervising revolving guarantee funds Proven track record in Europe and globally funded by the World Bank Group and the Global Environment Facility: Hungary, Slovakia, Czech Republic, Estonia, Latvia, Lithuania, Croatia, Bulgaria, Russia, China, Mexico, India Capability to refurbish 2% of existing housing stock each year Hungary: 100,000 homes which is 500,000 UK equivalent Market development effect is proven Focus on a regional, local approach

4. Background GESB further developed the model to suit a developed market The guarantee fund model is patented by GESB. Patent registry numbers are: 000520, 000397, 000396, 000395, 000394 & 000355 The model works in various sectors such as: Municipal buildings, Municipal street lighting, Municipal schools and hospitals, Energy Service Companies, Residential housing, Industrial Currently GESB is working with three regions in the UK to replicate the model Awards: International Green Award, Silver prize, 2011 and Sustainable Energy Initiative award 2011

6. RRLGF

7. RRLGF terms 5% portfolio guarantee Provides first loss coverage Covers losses up to 5% on the portfolio Portfolio is built by the sector – lower acquisition cost Provides access to market niche Loan terms Single rates to the whole programme is preferable Risk sharing facility – reflected in interest rates Standardised procedures – lower administrative cost –reflected in borrowing costs

8. RRLGF Benefits Minimum 1:20 leverage – highly efficient compared to other schemes All economical benefits remain with stakeholders New lending area for banks Larger volume of projects in the long term – higher profitability Meet government and climate change targets Job creation

9. RRLGF Portfolio Radian:In May 2009 jointly with Radian we applied for ERDF funding via SEEDA in the South East of England region to develop a conceptual finance model. Second phase started in December 2010 Conceptual model and pilot for 300 homes in the second phase CHC in Wales: In 2011, CHC with the support of the Welsh Assembly contracted GESB to replicate the model in Wales 700 units – £6 million loan portfolio Countdown project: In 2012 local authorities with Severn Wye Energy Agency commissioned GESB to replicate the RRLGF model in the private sector 300 units - £3-5 million loan portfolio

10. Risks and Rewards Mainstream strategy will be developed Risks: Engage guarantee fund providers Develop the right management structure and governance procedures Develop quality projects under time pressure Capacity of supply chain Rewards: Long term benefits – long term self sustainable programme Local ownership – independence All benefit remain in the RSL sector which further strengthens the capacity of the sector Low risk profile - gives time to financial recovery in case of technical, financial or social defaults Access to new markets

11. Key Success Factors Streamlined and standardised procedures and guidelines Quality project management Competitive supply chain Quality supervision Transparent approval procedures (loan and guarantee) Strong financial support in the guarantee fund (GEF) Governmental support (grants and interest rate subsidies)

12. Key Messages Answer to individual needs: tailor to households need Create demand: have the key to make people interested Affordable and accessible finance: low risk, affordable price, non mortgage based finance

13. Thank you! Information: Web: www.gesb.eu Email: info@gesb.eu