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The EIB supporting Energy Efficiency & the ELENA facility

The EIB supporting Energy Efficiency & the ELENA facility. Elisabetta Cucchi EIB Brussels Office 3 July 2012. Table of Contents. EIB and Energy Efficiency The ELENA facility Project examples. 2. EIB and Energy Efficiency. 3.

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The EIB supporting Energy Efficiency & the ELENA facility

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  1. The EIB supporting Energy Efficiency & the ELENA facility Elisabetta Cucchi EIB Brussels Office 3 July 2012

  2. Table of Contents EIB and Energy Efficiency The ELENA facility Project examples 2

  3. EIB and Energy Efficiency 3

  4. 1. The European Investment Bank (EIB)Long-term finance promoting European objectives • European Union’s long-term lending bank set up in 1958 by the Treaty of Rome • Shareholders: 27 EU Member States • Governance: BoG/BoD/Management Committee • 2011 Key figures: • Total signatures: EUR 61 billion • Total disbursements: EUR 60 billion • Total borrowings: EUR 76 billion • Subscribed capital: EUR 232.4 billion 4

  5. 1. EIB Energy Efficiency Lending: 2008-2011 2.33 1.54 1.18 0.73

  6. 1. EIB activities in EE financing • In addition to its traditional lending activity, EIB is complementing its action towards the development of the EE financing market in the EU with a number of initiatives in cooperation with the European Commission (EC), notably: • ELENA: EIB manages technical assistance to support the preparation of large scale investments (min EUR 50 m) initiated and/or implemented by local/regional administrations. EC contribution since 2010, EUR 49 m. • EEEF: EIB co-invest with the EC in a dedicated fund for EE. EC contribution EUR 75 m. • JESSICA: EIB structures and manages investment funds using structural funds which in some cases are dedicated to EE. • EE Facilities (SME FF, MFF): Existing facilities for SMEs and municipal infrastructures in New Member States have been restructured to allow financing of EE investments. EIB channels EC subsidies together with EIB funding through banks. Current EC contribution EUR 28 m. • EPEC:recentlyreceived a mandate from the EC to promoteawareness on EE among local, regional and national authorities. 6

  7. 1. European Energy Efficiency Fund (EEEF) 265 million (EUR 125 Mio EERP, 75 Mio EIB, 60 Mio CDP and 5 Mio DB) • Managed by Deutsche Bank (www.eeef.eu) • Beneficiaries: Local & regional Public authorities, but PPPs are possible. • Financing in form of loans, guarantees, forfeiting schemes (to finance ESCO projects)… • Technical assistance (grant) is available to structure projects (EUR 20 Mio). • 70% of the investment shall be targeted towards Energy Efficiency First ESCO project signed this year 7

  8. JESSICA invests EU Structural Funds (SF) for sustainable urban development : includes Energy Efficiency investment Projects financed through Urban Development Funds (UDFs ) 18 Holding Funds (EUR1.8b) with EIB as HF Manager/ ~ 700m allocated to EE related Urban Projects: Lithuania: EUR 225m HF: EE inhousing London: EUR 60m UDF: EE and small scale RE in public buildings Sicily, EUR 52m UDF: EE and small scale RE and transport projects Spain (HF EUR124m) and Italy (HF EUR70m) (planned in 2012) - National UDFs for EE/RE (EE projects may also be financed through as part of urban regeneration investments in “traditional” UDFs (e.g. Portugal, Bulgaria, Scotland, Pomerania (Poland)) 1. JESSICA and Energy Efficiency 8

  9. 1. EPEC and Energy Efficiency Initiative for the European Commission in connection with the Financial Facility to Support Energy Efficiency and Renewable Energy Initiatives Specific activities in Mandate: promote the optimal usage of Structural and Cohesion funds, in particular in the areas of energy efficiency and renewable energy improvements in housing and other types of buildings, by raising the awareness of local, regional and national authorities. Goes beyond EPEC’s usual focus on PPPs. • Knowledge-sharing: • Dedicated website • Case-study database (under development) • Contacts database (under development) • Event-organization: • Baltic Workshop (Riga) • Hague Round Table • Conferences Other activities: • Missions (Bulgaria, Italy) • Policy dialogue • Synergies with other EU Commission/ IEE initiatives (i.e. SF Energy Invest)

  10. Dedicated EPEC on Energy Efficiency website (under development/ expected to go live by end of July) • Geared toward external stakeholders • Cross-references to relevant EE activities within the EIB • Summarizes available funding/ TA schemes from both EIB and EC • Useful links + content summaries • Information about relevant events

  11. 2. The ELENA facility 11

  12. 2. Provision of Technical assistance European Local ENergy Assistance -- ELENA • 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. • Investments programme > EUR 50M • Minimum investment leverage required • Budget 2009 - 2011: 49 Mio € (allocations can be made until end 2013) • Envisaged budget 2012: 22 Mio €

  13. 2. General objectives of ELENA Assist in the transition from preparing action plans to making investments Support for programmes that can be replicated in other regions or cities Extend the use of innovative techniques and approaches 13

  14. 2. European Local Energy Assistance -- ELENA • INVESTMENT PROGRAMMES/PROJECT • EE and RES investment in public and private buildings, including social housing and street and traffic lighting; • Urban transport to support increased energy efficiency and integration of renewable energy sources; • Local energy infrastructure to support developments in previous sectors including smart grids, ICT, etc. ELENA (Project Development Services) Support to Final Beneficiaries with: • Additional technical staff • additional Technical studies • additional Feasibility studies • Procurement/tendering • Financial structuring

  15. 2. First Results • Facility operational since January 2010 • 18 projects signed/approved for a total of EUR 32 million • Supported Investment programmes around EUR 1.7 billion • Further projects in the pipeline or under approval with the EC.

  16. 2. ELENA added value • Scaling up and bundling EE & RE investments • Larger scale, better efficiency, economies of scale, reduced transaction costs • Increased capacity building within local authorities • Encouragement to improve planning and coordination • Improvement of bankability of projects • Support provided through ELENA improves access to finance • Replication of best practices demonstrated in other European locations, e.g. development of complex ESCO contracts for building refurbishment and streetlighting • Support to the implementation of measures and programmes identified in SEAPs • Tackling « new » sectors, e.g. development of electricalvehicles and hybrid buses, or decentralisedenergysystems, smart grids

  17. 2. Barriers • Institutional framework • Lack of capacity for the preparation of large scale projects • Low level of communication between different sectors inside the administration • Financial and economic context • Reluctance from public bodies to commit to large investment programmes in short period of time • Level of indebtedness and creditworthiness of some local authorities (e.g. impact of austerity measures) • Limited knowledge on alternative financing opportunities • Low energy prices in some countries

  18. 3. Project examples 18

  19. 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.

  20. Province of Chieti EIB framework loan (EUR 60M; 75% of overall investment cost) to support the provincial investment programme in EE and RE: EE investments in public buildings EE investments in public lightening Installation of PV systems Overallinvestment programme managed by Province of Chieti ELENA to support the PIU and the contracting of external consulting services PIU to select the projectsidentified by the municipalities, group them in packages and launch calls for the selection of privatecompanies EE investmentswillbedevelopedusingEnergy Performance Contracting and implemented by ESCOs EIB loanwillbeintermediated by local financial institutions acceptable to the Bank Individualinvestments to befundedunder the programme willbeselected by the financial institutions 20

  21. Provincial Funds Winning ESCOs Fuel Suppliers Municipalities Province of Milan Agreement between EIB and Prov-MI EIB funds Partnership Agreement between DG-ENER & Prov-MI for theCovenant of Mayors Selection of FI Promotion among Municipalities Preparation of Sustainable Energy Action Plans Financial Support FI Assessment of Energy Audits on Public Buildings Terms of Contracts Call for Bids c/o Municipalities Actions co-financed by ELENA Fuel Payment Reimbursments to ESCOs Energy Performance Contracts for Energy Saving Savings 21

  22. 3. JESSICA in London London Waste and Recycling Board GBP 18m London Development Agency GBP 32m European Commission GBP 50m London Green Fund GBP 100m (~EUR 110m) EIB – the Fund Manager FI ~EUR 60m ~EUR 52m Energy Efficiency UDF London Energy Efficiency Fund Additional Finance from other Financial Institution List of ESCOs pre- approved: “REFIT” ESCO Technical Assistance ELENA Urban Project Urban Project Urban Projects • EE projects (insulation, window replacement, boiler replacement, small scale cogeneration) • RE projects (PV, biomass boilers, etc.) in publicly owned residential and non-residential buildings 22

  23. For more information… http://www.eib.org http://www.eib.org/elena http://www.eib.org/products/jessica/index.htm http://www.eeef.eu http://www.eib.org/epec

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