Energy investment in Housing- Estonia Mirja Adler Head of Housing Division 21.05.2010.
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Transcript of Energy investment in Housing- Estonia Mirja Adler Head of Housing Division 21.05.2010.
Energy investment in Housing- Estonia
Mirja Adler
Head of Housing Division
21.05.2010
KredEx – Credit and Export Guarantee Fund• Founded in 2001• Under the jurisdiction of the Ministry of
Economic Affairs and Communications• Capital ~60 million €• State guarantee limit for:
– Housing loan guarantees EUR 96 million– Business loan guarantees EUR 96 million– Export guarantees EUR 192
million• Fully accredited for using ERDF and SF• 34 employees
Housing stock
• ~95% housing stock is in
private ownership:– ~60% of the housing stock
has been built in 1960-1990– ~30% before 1960
• ~ 75% population living in multi-apartment buildings• Low quality and low energy efficiency
– Average energy consumption per year in buildings which have not been renovated 200-220 kWh/m2
• Energy used in buildings ~40%
Previous measure – grant scheme 2003-2007 state grants all over Estonia:
– For energy audits, building designs and technical expertise 50% of the costs (since 2003) – still continuing
• Supported 3 800 buildings• Totally 1,4 million €
– For renovation, 10% of the costs• Supported 3 200 buildings• 17 million m2, totally 11 million €
– Problems:• Insufficient funding• Single works• Grant available after payments
From grants to revolving fund – why?• Opportunity for re-usage of the funds
• Funds stay in state
• Support scheme (10% support) versus loan scheme (state support is even bigger)
• Loan is needed for reconstruction anyway
• Opportunity also to smaller buildings
• Easier to administer, lower administrative costs
• End-beneficiary is used to take loan
• Innovative scheme, help from kfW
Steps for approval
• Preparation of measure
• Negotiations with: – Ministries– Politicians– Banks in Estonia– International banks– European commission
• Contracts
• Information to market participants
Challenges during the implementation• Convincing politicians in Estonia
– Good overall conditions for changing grant scheme to loan scheme (2008)
• Old regulation – discussions with European Commission for 8 Months– (criteria, integrated plan, new financing
scheme) – end of 2008
• Change of economical situation• State guarantee for CEB – June 2009
Revolving fund for energy efficiency
KredEx (Fund)
EUR 49 Million(+15% self-financing,
total 57 mln €)
ERDF
EUR 17 Million
Development Bank (CEB)EUR 29 Million
Swedbank SEB
3. Favorable funding to the commercial banks, intress 4% to end-beneficiaries
Apartment Building
Apartment Building
Apartment Building
Apartment Building
Apartment Building
Apartment Building
1. ERDF to equity of the fund
2. Additional funding up to 50% of total
4. Loan to the apartment associations. Commercial Bank takes the risk of the lenders
State guarantee
Banks selection• Tender for the banks, criteria:
– Rating at least Baa 3 (Moodys) or BBB (Fitch or Standard & Poors)
– Respond to credit institutions act and have license
– Budget over 15 billion EEK – Bank has at least 1 year experience with
financing multi-apartment buildings– Bank accepts loan-maturity for 20 years
Steps to implement• Terms of measure
• Approval from European
Commission
• Tender for the banks
• Agreements with banks– Terms for buildings, monthly reports– Terms for financing (tranches, interest rate,
risk margin, auditing etc)
• “Work” with end-beneficiary
Process for end-beneficiaries• Decision in General Assembly• Self-financing part (own funds or usual loan)• Energy audit for the building• Building design documents – approved by
energy auditor• Building permit • Credit from banks• Tender and agreements with builders• Guarantee (state) from KredEx if needed – up to
75% of loan amount• Construction with owner supervision
SF loan vs usual loanSF loan
• Interest: – Fixed for 10 years– Between 3,9 – 4,4%– Interest on 64 000 € loan
4,01% 10 years 13 731 €
• Contract fee:– 0,5% - 0,75% from loan
amount
• Maturity:– Up to 20years
Usual loan
• Interest– Fixed for 5 years or floating– Interest ~ 7-10% (fixed)– Interest 64 000 € loan 7%
10 years 25 137 €
• Contract fee :– Up to 1% from loan amount
• Maturity:– Average 2008: 11,8 years
Burden of payments – building 3000 m², saving 30%, loan 3 mln EEK, interest 4,0%
Status quo• Start 24.06.2009
• 31.03.2010:
70 contracts with
multi-apartment buildings, total 5,1 mln € (average 74 400 €, 2035 apartments, saving 33%)
• Interest is there, but under current economical situation the self-financing part is the problem and also people are careful with loans
Information to market participants• Press-conference on 25.05.2009,
coverage on biggest newspapers
• 67 (2009) presentations to end beneficiaries, builders, energy auditors, project designers, local municipalities
• Advertisements in local and Estonian newspapers, magazines, internet, direct mailing, articles
Campaigns 2009
Financial support to end-beneficiaries
• State grant (ERDF) from KredEx for:– Energy audit – 50%, max 10 000 EEK
(640 €)– Technical inspection – 50%, max 10
000 EEK (640 €)– Building design documents - 50%, max
50 000 EEK (3 195 €)
Lessons learned• Preparation takes long time – for Estonia
2 years
• Many different partners to negotiate – parallel negotiations
• Economical situation in the country can change dramatically
• Legal framework to support the measure
• Combine different measures
• Information to market participants and end-beneficiaries
Contact:
Credit and Export Guarantee Fund KredEx
Mirja Adler
Hobujaama 410151 Tallinn, Estonia
Tel: +372 6 674 100Fax: +372 6 674 101
E-mail: [email protected]