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Day 2 Financing for EE measures under NEEAP

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Regional Workshop: National Energy Efficiency Action Plans Kempinski Hotel, Amman, Jordan 5 - 6 December, 2010

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Day 2 Financing for EE measures under NEEAP

  1. 1. This project is funded by the European Union Financing for EE measures under NEEAP 6 December 2010Florentine Visser - Key Expert Low Energy Building & Urban Planning Daniel Becker - ECOFYS www.med-enec.com 1
  2. 2. MED ENEC Finance Study - Background This project is funded by the European UnionBackground of the study:•Available financing is a key precondition forenergy efficiency deployment•Funding is offered by a multitude offinancing institutions• The orientation in this ‘landscape of funding’ is challenging and time consuming• Especially applicability of funding regulations to energy efficiency and to the respective region is often not clear www.med-enec.com 2
  3. 3. MED ENEC Finance Study - Service This project is funded by the European UnionMED-ENEC Finance Study provides for Policy level:•background information on framework conditions in the countries•good practice examples of financing programs from the region•concluding remarks on the interaction between policy framework andfinancing instruments• concluding remarks on the interaction between policy framework and financing instruments www.med-enec.com 3
  4. 4. MED ENEC Finance Study - Service This project is funded by the European UnionMED-ENEC Finance Study provides for Building Project level.•a compilation of financing information currently applicable to theregion•a structured overview on financing programs of potential relevancefor energy efficiency projects• an online service• (MED-ENEC financing database) for user friendly search www.med-enec.com 4
  5. 5. Information pattern This project is funded by the European UnionThe information on funding schemes is Criteria Optionsstandardized by following categories: Name of Financing Organisation Type of Financing European Investment Bank (EIB)• Name Development bank Organisation Country• Type (e.g. development bank) City FEMIP has established a network of field offices in , and .• Country (of origin) FEMIP focuses on three areas: improving the local population’s access to sources of energy; integrating the Euro-Mediterranean’s energy markets and diversifying the sources of supply, particularly by drawing on renewable• City (main seat) Type of Measures/ forms of energy. This third area is of growing importance for FEMIP, which Technologies has undertaken to coordinate the establishment of the Mediterranean Solar Plan, one of the Union for the ’s six key initiatives. The Plan will concentrate• Types of measures / technologies (for initially on research and development, followed by commercialisation of the alternative energy sources. Countries eligible Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, Palestinian territories,which funding is available) for financing Syria, and Tunisia. Public and private sector bodies and enterprises.• Countries eligible for financing Loan: SMEs, Private and public sector Private equity: Intermediate-sized private enterprises, Investment funds, Eligible to Microfinance institutions Technical assistance: All FEMIP customers• eligible to (type of applicants, e.g. private sector, Guarantees: SMEs, Large corporates, Domestic banks, Public sector promoters, Sub-sovereignsgovernments etc.) Type of Financing Credit, equity financing, technical assistance; as the legal and financial set-up is currently being finalized also guarantees could be made available starting from 2010 for MSMEs, larger corporations,• Type of financing (e.g. loans, guarantees etc.) Financing range (€) domestic banks, public sector promoters or sub-sovereign lenders. As a rule, the Bank lends up to 50% of the capital required for a project.• Financing range Description & The project promoted by the public or private client must be in line with the eligibility criteria of the EIB (see:• Description & Conditions http://www.eib.org/projects/topics/index.htm) and be economically and Conditions financially sound. Application: http://www.eib.org/projects/regions/med/funding/index.htm• Link to webpage Link http://www.eib.org/projects/regions/med/index.htm www.med-enec.com 5
  6. 6. Database search interface This project is funded by the European Union• The MED-ENEC financing database will be available from January 2011http://www.med-enec.eu/database/finance www.med-enec.com 6
  7. 7. Framework and Financing This project is funded by the European UnionA general rule:Financing for energy efficiency measures will be more effective, whenbetter legal framework conditions exist. EE Policy Financing (NEEAP) Why? www.med-enec.com 7
  8. 8. Link Framework and Financing This project is funded by the European UnionFinancing instruments, also with subsidy element, only work if :Potential projects have a reasonable risk structure  return on investment,  time frame  under stable conditionsThis might be the case for the total project,but may be not for EE measures, butObstacles to energy efficiencysubsidized energy priceslow awarenesslittle experience with technologies…often deteriorate the financial riskstructure of the projects www.med-enec.com 8
  9. 9. Link Framework and Financing This project is funded by the European UnionEconomically sustainable financing requires appropriate legalframework reducing risks to a reasonable level.• This is first a task is for policy makers, then for financing institutions• Good practice in financing is found where policy framework and financing complement each other, taking into account country specific conditions www.med-enec.com 9
  10. 10. Good practice examples This project is funded by the European UnionExamples for an integrated approach of policy framework andtailored financing instruments are, among others:TunisiaEBRD financed Energy Efficiency ProjectANME in close collaboration withcommercial banks, integrating alsoFNME subsidiesAudit, Thermal Regulation www.med-enec.com 10
  11. 11. Good practice examples This project is funded by the European UnionExamples for an integrated approach of policy framework andtailored financing instruments are, among others:MoroccoFOGEER fund by ADEREEfor energy efficiency and renewableenergy under the PROMASOL programLegal Framework www.med-enec.com 11
  12. 12. Good practice examples This project is funded by the European UnionExamples for an integrated approach of policy framework andtailored financing instruments are, among others:Lebanonplanned NEEREA FundSubsidized loan scheme for energyefficiency and renewable energiesNational Bank (Banque de Liban) incollaboration with local banks, Ministryof Finance and LCECBuilding Code, Standards & Labelling www.med-enec.com 12
  13. 13. Good practice examples This project is funded by the European UnionExamples for an integrated approach of policy framework andtailored financing instruments are, among others:Jordanplanned JREEEF Fund,Ministry of Energy in collaboration withGEF / World Bank,Legal Framework www.med-enec.com 13
  14. 14. Gaps & Challenges This project is funded by the European UnionWhy existing financing might not be applicable…•In many countries obstacles to energy efficiency are high  the existing financing instruments may in many cases not work  project risks too high• If projects are financed despite a negative risk structure:  they will not have a multiplier effect www.med-enec.com 14
  15. 15. Gaps & Challenges This project is funded by the European Union• Thus:• Market potentials for energy efficiency will not be tapped into This especially a risk for measures drafted in the National Energy Efficiency Action Plans• To avoid such negative impact, NEEAPs should be sufficiently concrete in terms of policy measures to be implemented before financing for projects is required www.med-enec.com 15
  16. 16. Conclusion This project is funded by the European UnionMED-ENEC Finance Study facilitates much better access tofinancing instruments currently in place  Service will be continuously amended under MED-ENEC II Applicability of financing to specific projects requires individual checksSuccess factor of financing schemes ishigher when policy framework ismore advancedPolicy makers and financinginstitutions need to closely collaborateto unleash the huge energy efficiencypotential (and the accordingly hugebusiness opportunities) www.med-enec.com 16
  17. 17. Thank You This project is funded by the European Union Thank You for your attention! !ً‫شكراً جزيل‬ www.med-enec.com - florentine.visser@gtz.de“The contents of this publication are the sole responsibility of the author and can in no way be taken to reflect the views of the European Union”. www.med-enec.com 17

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