European Investment Bank

The role of the EIB

in Energy Efficiency

Investments for Buildings

BPIE European Roundtable

Milena Messori

Head of Office, EIB Bucharest

March 24, 2011

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I. Challenges

II. Instruments

1. EIB

2. ELENA

3. JESSICA

III. Conclusions

Overview

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1. EU energy policy objectives EU 20% target

Covenant of Mayors

2. Lack of funds Fiscal crisis on public budgets

Lack of appetite of commercial banks

Home owners: delaying renovations?

I. Challenges

Need to achieve maximum value for money

in publicly-supported programmes

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1. EIB

2. ELENA

3. JESSICA

II. Instruments

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1. EIB Energy lending

Four priority areas:

Renewable energy

Energy efficiency

Diversification and security of internal supply

(including TEN-E)

External energy security and economic development

Energy loans of EUR 15 bn in EU in 2010:

EUR 5.5 bn for Renewable Energy projects

EUR 1.6 bn for Energy Efficiency projects

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1. EIB: Energy Efficiency (EE)

Energy efficiency is the most cost-effective way of reducing emissions and energy demand

The EIB’s EE target areas include:

Residential, commercial and public buildings

Transport (rail, road, urban transport)

Electricity production & distribution

Industry

EE considerations are mainstreamed into all EIB operations, working with promoters to extend the EE potential of projects

To be eligible, projects need to achieve minimum energy savings in line with national legislation and Energy Efficiency at Final Users and Energy Performance in Building Directives

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1. EIB Loan Formats

The EIB offers various loan formats in support of energy investment:

Direct loans: projects with investment costs > EUR 25m

- up to 50% of the total cost

- security structure defined on a case-by-case basis

Credit lines: investment costs < EUR 25m, with banks or financial institutions as intermediaries, taking risk on SMEs (< than 250 employees), or local authorities

Mid-Cap loans: investments of up EUR 50m, in support to projects undertaken by intermediate-sized companies (< than 3,000 employees)

For EE investments, the EIB could lend to municipalities directly or finance the Government contribution

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1. EIB Project Cycle

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In 2010, the EIB signed its 1st building thermal rehabilitation

project in Romania:

Bucharest Sector 6 Thermal Rehabilitation – EUR 70m to

support a multi-annual investment programme (2011-2013) for

thermal rehabilitation of 273 blocks of flats (approx. 23,000

apartments) located in Bucharest, Sector 6

Forecast for 2011: Bucharest Sector 1 Thermal

Rehabilitation – EUR 125m to support thermal rehabilitation

of 416 multi-storey residential buildings (approx. 22,000

apartments) located in Bucharest, Sector 1

1. EIB Experience in Romania

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1. EIB: Support cities to cut carbon emissions

EE in the Province of Milan

Grant-funded programme of energy audits of public buildings in the Milan

Province (180 municipalities)

Problem

•constrained budgets at municipal level

•lack of technical capacity to develop projects

Solution

•adopt energy performance contracts

•aggregate projects

•coordinate at province level

•standardise contracts and energy cost baseline

Programme

•refurbishment of existing school buildings in some 30 to 40 municipalities

•simple technologies: lighting (compact florescent lamps, automation

systems), heating (new condensing boilers, heating system pumps), roof

insulation etc.

Implementation

•by ESCOs. Pay investments costs; provide guarantee for energy savings

(around 20%); serve debt through portion of energy savings

Finance

•provided by local Banks, supported by EIB loan, with interest rate

subsidy provided by the Province

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1. EIB

2. ELENA

3. JESSICA

II. Instruments

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2. ELENA: Overview

ELENA

(European Local Energy

Assistance) (Project Development Services)

Support to Final Beneficiaries with:

Feasibility studies

Business Plans

Technical studies (energy audits)

Procurement/tendering/contracting

Additional technical staff

Financial structuring

90% of costs

INVESTMENT PROGRAMME

EE investments in public and private buildings, including social housing and street and traffic lighting

DH networks

Decentralised CHP

Urban transport

Local energy infrastructure to support development in RES

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2. ELENA Eligible entities

Beneficiaries: local and regional

authorities or other public entities, or

groups of such entities, including those

subscribing to the Covenant of Mayors

Countries: EU, Norway, Iceland,

Liechtenstein and Croatia

All or part of the investment programme

may be implemented by bodies other than

the above mentioned entities, including

private firms

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2. ELENA: Example of hybrid buses

Beneficiary: City

Objective: replacing public buses with more energy efficient ones

Preparatory activities: identifying replacement needs and type of buses

Support required from ELENA:

Additional analyses, in particular of operational risks associated with hybrid buses

Preparation of calls for tender and negotiations with bidders

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2. ELENA: Example of infrastructure for

recharging electrically powered vehicles

City

Preparatory activities: market survey and feasibility

study

Support required from ELENA:

Setting up an implementation unit

Detailed research

Selection of procedure for implementation

of investments

Preparation of calls for tender and

negotiations with bidders

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1. EIB

2. ELENA

3. JESSICA

II. Instruments

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3. JESSICA: The role of the EIB

EIB taking a leading role, alongside DG-REGIO, in

promoting and developing JESSICA instruments in

MS

SF Regulations specifically provide for EIB to act as

Holding Fund (on a not-for-profit basis)

Technical assistance and dissemination of best

practice, based on established expertise in lending to

urban renewal/regenerations projects across the EU

Providing complementary loan financing for urban

development projects

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3. JESSICA: What types of projects are appropriate?

Rules on the eligibility of project expenditure are the same as those

applying to the use of Structural Funds

Eligible target projects:

Urban infrastructure, including transport, water/waste water, energy

Heritage or cultural sites, for tourism or other sustainable uses

Redevelopment of brown-field sites, including site clearance and

decontamination

Office space for SMEs, IT and/or R&D sectors

University buildings, including medical, biotech and other

specialised facilities

Energy efficiency improvements

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Large challenges

Programme design key (ELENA)

Tailored financing solutions (JESSICA)

EIB willing partner in this process

IV. Conclusions

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For more information…

http://www.eib.org/

messori@eib.org

Tel: (+40) 21 208 64 00

Fax: (+40) 21 317 90 90