22 June 2017: Financial institutions should be interested in deploying capital into energy efficiency as it brings the following advantages: business opportunities, risk reduction, corporate social responsibility, and reduced regulatory pressure. These are some of arguments made in the ‘EEFIG Underwriting Toolkit,’ launched by the Energy Efficiency Financial Institutions Group (EEFIG) and UN Environment Finance Initiative (UNEP FI).
The toolkit aims to assist financial institutions in scaling-up their deployment of capital in energy efficiency. Its objectives are to: help financial institutions gain a better understanding of the value and risks of energy efficiency investments; provide a common framework for such evaluations; facilitate the attraction of external capital; and provide a common language between project developers, project owners and financial institutions. Aside from tools for evaluating value and risks, the toolkit also includes resources for market analysis and project life cycle development to build capacity within financial institutions.
The publication contains four sections, each addressing a subgroup of actors involved in energy efficiency finance. The section ‘financial institutions and energy efficiency’ introduces the interest that financial institutions have in investing in energy efficiency to senior management and decision makers. ‘Financing energy efficiency’ describes options, structures and contracts for energy efficiency finance to origination teams and project developers.
The chapter titled ‘the project lifecycle’ aims to provide the foundation for a standardized approach that project developers and risk teams can use to plan and execute projects. The final part ‘value and risk appraisal’ lays out numerous ways in which energy efficiency projects can generate value, such as energy savings, increased asset value, increased productivity and increased health and well-being, and the types of risk affecting such projects. This section addresses project developers, originators as well as risk teams.
The toolkit further includes an online resources section, which will be expanded and revised to reflect experiences gained as the market for energy efficiency financing develops.
The EEFIG was established in 2013 by the European Commission Directorate-General for Energy (DG Energy) and UNEP FI. It created an open dialogue and work platform for public and private financial institutions, industry representatives and sector experts to identify the barriers to the long-term financing for energy efficiency and propose policy and market solutions to them. [Publication: EEFIG Underwriting Toolkit: Value and Risk Appraisal for Energy Efficiency Financing] [EEFIG Underwriting Toolkit Web-Portal] [UNEP-FI News Release]