First results highlights in the 2nd Newsletter
The analysis of the outcomes of the roundtables and the ongoing green and sustainable initiatives in four different South-Eastern countries has shown that all four countries face similar issues in the field of energy efficiency investments. Although there is a general consensus that discussions started in roundtables are beneficial for the involved stakeholders, it is evident that politics is of utmost importance if we want to change established methods and translate roundtable conclusions into long-term activities and results.
Stakeholders share the conviction that for the EE projects market to flourish, collaborative actions along the entire value-chain have to be carried out – from the project planning stage up to the monitoring phase, using verification and standardisation tools and protocols, while additional efforts are put towards efficient communication and large-scale behaviour change campaigns focused on the application of alternative financing instruments with a reduced grant component, transitioning to market-based financing.
From the FIs side, the practice up to now for EE financing is the use of either long-term credit financing or project financing. Loans provided by specialised funds/commercial banks, green mortgages or EPC are present, but with moderate impact.
Beneficiaries are less committed to work with FIs in order to find tailored and innovative financing solutions. Many European innovative financing schemes (as on-tax finance, on-bill payment, citizen financing etc.) are not sufficiently known or considered.
Because of the crisis, businesses and policy-makers are prioritising short-term measures to ensure that firms survive, rather than investing for the long-term. For some foreign-owned companies, the EE investment decision is taken abroad only according to repayment time.
Among the beneficiaries of the EE investments and clients for the FIs, the industrial sector seems to be more committed, trustworthy, and financially capable than municipal or residential clients. Companies’ expenditure on the energy efficiency of their total investment in 2019 was between 10% (Croatia, Greece, Romania) and 16% (Bulgaria).
ESCOs and EPC procedures are identified as major facilitators of EE financing, however the ESCO market development across SMAFIN countries is low. The ESCO development possibility is further hindered by the lack of investment grants for building renovation intended especially for ESCOs and this reflects in the difficulty to access equity and debt for long-term growth, short-term financing for project implementation and long-term financing for the performance period. A combination of ESCO with grant financing can be a successful approach for certain projects but is rarely applied