Best Practice: Financing of EE in Public Buildings
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Best Practice: Financing of EE in Public Buildings Tamara Babayan R2E2 Fund Director
Transcript of Best Practice: Financing of EE in Public Buildings
Best Practice: Financing of EE in Public Buildings
Tamara Babayan R2E2 Fund Director
Financing of EE in Public Buildings • Why Public Buildings?
• What is funding source?
• Financing mechanism
• Procurement mechanism
• Technologies
• Results
• Monitoring
• Impact
Why Public Buildings? • Exemplary role of the government!
• To test mechanism and demonstrate benefits of EE investments
• To identify barriers and take actions to remove them
• To ensure direct benefit to the state budget
• To remove perception risks
• To increase level of quality of public services
• The most vulnerable group • Limited budget for energy bills and renovation
• Underoccupation while financing is per person
• Low level of comfort
• Need for renovation without perspective of refinancing
School Kindergarten
University Theatre
Jails Administrative
buildings
Olympic school Municipal lighting
Funding Source of Investments in EE Project
Saving from energy bill finances investments
$
$ $
Funding sources No of public
facilities USD
WB/GEF grant
157 8,1mln. GoA-taxes
R2E2 Revolving Fund
Financing Mechanism – Super ESCO
Ministry of Finance
World Bank
R2E2 Fund (Super ESCO)
Fund hires ESCO under ESPC
ESCOs
Public buildings, Municipalities
loan
on-lending
energy efficiency services
repayment
ESA for <10 yrs
repayment Takes over project after
contract term
Presenter
Presentation Notes
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Selection Criteria for Public Facilities
Facility type – public and local administration buildings, schools, kindergartens, hospitals, public lighting
Requirements - sound building structures, no plans for facility closing/privatization
Additional selection criteria
• Comfort level over 50%
• Technical energy savings potential over 30%
• Payback period less than 10 years
Funding Mechanism
• Revolving Fund - provided by MoF to the R2E2 for 2006-2045 to implement EE and RE projects
• Multiple usage of funds during the given period serves more beneficiaries
• Selection of beneficiaries on FIFO approach based on criteria
• Signing Project Initiation Agreement with beneficiary
• Energy audit, procurement of contract for engineering design, construction and 1 year O&M, engagement of technical supervision by R2E2
• Signing of ESA with beneficiary (with repayment schedule)
• 2,5% per annum for R2E2 services
• Commissioning of the system
• Monitoring, M&V reporting, O&M jointly for 1st year
• Delivery of savings and repayment by beneficiares during payback period
Procurement Scheme • R2E2 conducts procurement based on WB NCB procedures
• Contract includes design, construction and 1 year O&M-with performance-based payments
• Project is defined by minimum level of energy savings based on preliminary energy audit
• Bidder must bid on technology proposed to meet the minimum energy savings specified
• Bids are submitted in single envelop (technical & financial)
• Evaluation is based on (i) technical feasibility to meet promised energy savings, and (ii) highest net present value 8
Presenter
Presentation Notes
This slide uses the Bulleted List slide layout. We created the list by clicking the placeholder, typing the text, and pressing RETURN to create new bullets. The look of the bullets and the text is defined by the design template. Animations You can keep your presentation lively by animating the way text or pictures enter, exit, or provide emphasis on a slide. On this slide, we applied animation effects to the bulleted text, which causes the bullet points to appear one at a time according to the effect we selected. For this slide we chose to have the text appear from the right at a fast speed, but you can choose from several options. To animate text or pictures: In normal view, select the slide that contains the text or object you want to animate. On the Slide Show menu, click Custom Animation. Under Select to animate, click the text or object you want to animate. Click Add Effect, click the entrance, emphasis, or exit animations you want, and then click OK. To change the order of animations, under Animation order, click the animation, and then click one of the arrows to move it up or down in the list. Select options for timing, direction, and speed. To set additional options, click Effect Options. To see a preview of the animation, click Play. At any time, you can preview the animation for a slide by clicking Animation Preview on the Slide Show menu. You can also view the slide show to see your animation in action.
Typical EEMs •Replacement of windows and doors
• Installation of dividers from insulating materials
•Reduction of glazed surface
• Insulation of walls and roofs
•Heating system installation and upgrade
•Solar water heating
•Heat pumps
•LED lighting
Mkryan Ashot
Presenter
Presentation Notes
This slide uses the Bulleted List slide layout. We created the list by clicking the placeholder, typing the text, and pressing RETURN to create new bullets. The look of the bullets and the text is defined by the design template. Animations You can keep your presentation lively by animating the way text or pictures enter, exit, or provide emphasis on a slide. On this slide, we applied animation effects to the bulleted text, which causes the bullet points to appear one at a time according to the effect we selected. For this slide we chose to have the text appear from the right at a fast speed, but you can choose from several options. To animate text or pictures: In normal view, select the slide that contains the text or object you want to animate. On the Slide Show menu, click Custom Animation. Under Select to animate, click the text or object you want to animate. Click Add Effect, click the entrance, emphasis, or exit animations you want, and then click OK. To change the order of animations, under Animation order, click the animation, and then click one of the arrows to move it up or down in the list. Select options for timing, direction, and speed. To set additional options, click Effect Options. To see a preview of the animation, click Play. At any time, you can preview the animation for a slide by clicking Animation Preview on the Slide Show menu. You can also view the slide show to see your animation in action.
Steps………
Procurement
Walk-through audit
Due Diligence
Request
Eligibility screening
Financing
Design
Construction
Commissioning
Project Life
Client
Fund
Fund
Contractor O&M
Owner
Triple glazed windows on sunny side
Investment, AMD
19 000 000 Annual Savings %
59.1%
Annual CO2 emissions reduction, t
35.3
Energy savings in 20 years of operation, AMD
102,140,880
Payback, years 6.0
Yerevan School #61
Before….
Annual consumption 285,772 kWh, or
30,730 m3 gas
After….
Annual consumption 116,900 kWh, or
12 570 m3 gas
168,872 kWh or 18,160m3 gas or 2,832,960 AMD
Reduction of annual consumption of gas
30,728
12,570
44,556
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
Before EEM, after EEM and without EEM
59.1 %
Savings and Repayment
4,353,700
753,344
[VALUE]
1,960,899 1,960,899
2,091,979
3,146,145
1,054,166
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
Before EEMs – New Before EEMs – New tariff
Results
• Energy savings – 415,688,463 kWh
• Savings in cash -
• Average saving level – 50,8%
• Reduced CO2 – 112,165 t
• Committed investments – $8,1 mln.
• Number of public facilities – 79 commissioned and 78 ongoing
Benefits • Better conditions for employees and
clients increases quality of public services
• Due to the improved comfort the number of clients is increasing with corresponding financing for the extended services
• Behavioral changes happen to assure sustainable performance of buildings and systems
• Capacity enhancement for operational and managerial staff
• “Think greener” becomes reality there
• Awareness raising among the clients and employees
Lessons learned 1. Demand based approach assures commitment of beneficiary to the
project
2. Initial screening by R2E2 provides information on building condition and operation of public agency thus reducing risks
3. Repayment mechanism provides more funds to serve more clients
4. Repayment mechanism increases ownership, accountability and quality of energy management of the beneficiary
5. Result based payment increases quality of work
6. Design-build approach promotes technology supply market
7. Contract award based not on the lowest price but on highest NPV allows performing more efficient EEMs
Tamara Babayan Armenia Renewable Resources and Energy Efficiency Fund R2E2 Fund
Phone: 374 10 588011
Mobile: 374 95 930030
Email: [email protected]
Website: www.r2e2.am
