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ROME | VIA TIRSO 14LONDON | THE SHARD, 32 LONDON BRIDGE STREET
Financing instruments and innovative business models to boost urban regeneration
Funds and Finance Smart Cities
Alessandra Cassisi and Angelo GiordanoOfficinae Verdi Group, Financial Advisers
OV | GCA ROME | MILAN | LONDON | MADRID | BRUSSELS | AMSTERDAM | OSLO | MOSCOW | VLADIVOSTOK
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F I N A N C E S U S T A I N A B I L I T Y
E N E R G Y I N D U S T R Y
E N E R G Y E F F I C I E N C Y
R E N E W A B L E S
S U S T A I N A B L E F I N A N C I N G
C A R B O N O F F O P E R A T I O N S
S M A R T & R E S I L I E N T C I T I E S L A R G E S C A L E G R E E N I N V E S T M E N T S
S M A R T E N E R G Y M A R K E T S I N T E G R A T E D I N N O V A T I V E T E C H
OV Shareholding
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OV Business Model
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OV Background – EU Projects | Funds & Finance for Smart Cities
REMOURBAN Smart City Project
Duration: Jan 2015 – Dec 2019
Total budget: € 24.793.451,01
Lighthouse Cities: Valladolid, Nottingham,
Tepebaşı
Following Cities: Seraing and Miskolc
R2CITIES Smart City Project
Duration: Jul 2013- Jun 2018
Total budget: € 14.861.751
Lighthouse Cities: Valladolid, Kartal and
Genova
REZBUILD Project – NZEB
Retrofitting
Duration: Oct 2017 – Sep 2021
Total budget: € 9.038.209
Demo Cities: Madrid, Oslo and Venice
STARDUST - Smart City
Project
Duration: Oct 2017 – Sep 2022
Total budget: € 21.093.539
Lighthouse Cities: Pamplona,
Tampere, Trento
Following Cities: Derry, Kozani,
Litomerice and Cluj-Napoca
TRUSTEPC - Scale up investments by
Energy Performance Contracting
Duration: Mar 2015 – Feb 2018
Total budget: € 1.936.975
Countries: Croatia, France, Greece, Italy,
Portugal and Spain
+CityxChange - Smart City Project
Duration: Oct 2018 – Sep 2023
Total budget: € 24.174.347
Lighthouse Cities: Trondheim, Limerick
Following Cities: Sestao, Alba Iulia, Pisek, Voru and Smolyan
OV | GCA ROME | MILAN | LONDON | MADRID | BRUSSELS | AMSTERDAM | OSLO | MOSCOW | VLADIVOSTOK
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Funds and Finance Smart Cities
Executive summary
#1 The “Long Term Generating” concept
#2 The smart city “Ecosystem vision”
#3 The city enablers’ engagement
#4 Smart City integrated infrastructures
#5 The EIP-SCC fine-tuning of cities Domains
#6 Funding instruments
#7 Financing mechanisms
#8 Role of Private Equity
#9 Business Models and Financing Schemes customization process
#10 Emerging ESCOs Business Models
OV | GCA ROME | MILAN | LONDON | MADRID | BRUSSELS | AMSTERDAM | OSLO | MOSCOW | VLADIVOSTOK
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Funds & Finance for Smart Cities
How to finance Investment Plans ?
OV | GCA ROME | MILAN | LONDON | MADRID | BRUSSELS | AMSTERDAM | OSLO | MOSCOW | VLADIVOSTOK
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Funds & Finance for Smart Cities
Umbrella concept
1. Our ecosystem is under the Main Public Authority umbrella. They should generate and guarantee the local value chain identification/creation.
2. Deploy actions according to EIB Capital requirement especially under the EIAH umbrella, namely the URBIS <new urban investment advisory>
OV | GCA ROME | MILAN | LONDON | MADRID | BRUSSELS | AMSTERDAM | OSLO | MOSCOW | VLADIVOSTOK
NEW YORK | SILICON VALLEY | LOS ANGELES | ABU DHABI | HONG KONG | TOKYO
#1 The “Long Term Generating” concept
The LTG could be considered as a key enabler concept triggering, around a wide smart city framework, investment projects.
According to our experience, 5-to-20 ys is the right lapse able to generate benefits for both financing investors and social welfare.
Funds & Finance for Smart Cities
OV | GCA ROME | MILAN | LONDON | MADRID | BRUSSELS | AMSTERDAM | OSLO | MOSCOW | VLADIVOSTOK
NEW YORK | SILICON VALLEY | LOS ANGELES | ABU DHABI | HONG KONG | TOKYO
#2 The SC “Ecosystem vision”
Successful case studies underlines the establishment of a
well-functioning Ecosystem architecture as a key issue for
a real-life city investment plan activation.
Literature is currently focused on the Quintuple Helix
engagement, covering all local society involvement. Emerging
instruments are social innovations and gamification tools
Funds & Finance for Smart Cities
OV | GCA ROME | MILAN | LONDON | MADRID | BRUSSELS | AMSTERDAM | OSLO | MOSCOW | VLADIVOSTOK
NEW YORK | SILICON VALLEY | LOS ANGELES | ABU DHABI | HONG KONG | TOKYO
#3 The city enablers’ engagement
An emerging case study in US is the creation of a local Venture Smart Group. A platform built for co-design the local smart city
vision, sharing data and information.
The objective is to establish a co-thinktank approach involving policy decision making, citizens, technology providers, financial institutions in order to adopt smart city local medium/long term vision. <2030..>
Funds & Finance for Smart Cities
OV | GCA ROME | MILAN | LONDON | MADRID | BRUSSELS | AMSTERDAM | OSLO | MOSCOW | VLADIVOSTOK
NEW YORK | SILICON VALLEY | LOS ANGELES | ABU DHABI | HONG KONG | TOKYO
#4 Smart City integrated infrastrs.
Currently, EU cities infrastructures need massive reinvestment and modernization. Up-to-date SCs trends focus on city infra/structures
and info/structures at integrated level.
But, there is a need for financial engineering allowing smart cities capturing conventional funding and un-conventional financing, even
trespassing the stability pact rules and other constraints.
Funds & Finance for Smart Cities
OV | GCA ROME | MILAN | LONDON | MADRID | BRUSSELS | AMSTERDAM | OSLO | MOSCOW | VLADIVOSTOK
NEW YORK | SILICON VALLEY | LOS ANGELES | ABU DHABI | HONG KONG | TOKYO
#5 The EIP-SCC city domains
EIP-SCC Marketplace, coordinated all the co-funded FP7 SCs and H2020 LCs, individuates validated/experienced smart cities’
domains.
Smart Lampposte-Mobility
Social HousingUrban Platform
Funds & Finance for Smart Cities
OV | GCA ROME | MILAN | LONDON | MADRID | BRUSSELS | AMSTERDAM | OSLO | MOSCOW | VLADIVOSTOK
NEW YORK | SILICON VALLEY | LOS ANGELES | ABU DHABI | HONG KONG | TOKYO
#6 Funding instruments* *Triggering an innovative investment pool for smart city program, requires creative thinking overcoming the
traditional models of infrastructure fund.
- EU/EC co-funding initiatives and programs (ERDF, H2020/HEurope, etc. fulfilling the investment projects funding gap)
- tools by which project costs are repaid by the city through mechanisms such as: property taxes, business taxes, municipal income tax, user charges, pay-for-performance models, asset
disposals, etc.
Funds & Finance for Smart Cities
OV | GCA ROME | MILAN | LONDON | MADRID | BRUSSELS | AMSTERDAM | OSLO | MOSCOW | VLADIVOSTOK
NEW YORK | SILICON VALLEY | LOS ANGELES | ABU DHABI | HONG KONG | TOKYO
#7 Financing mechanisms * *Triggering a comprehensive
investment pool for smart city program deployment requires creative thinking overcoming the traditional models of infrastructure financing.
Project promoter’s contribution Private contribution under a PPP
Bond financing bond options issued by states, local authorities, or corporates to finance different projects
Pension fund private placement bonds financing, capital to invest through non-public
Equity investment and infrastructure fund managers investments as part of diversified securities portfolio
Venture capital invest in companies in exchange for equity in the companies they invest in
Crowdfunding enables groups to support a solution by pooling their resources
Venture philanthropy private investors, foundations or private-equity firms using VC approaches to provide financial support to viable projects with high
levels of social interest.
EIF – VentureEU €2.1 billion to boost venture capital investment in Europe’s innovative start-ups
Funds & Finance for Smart Cities
OV | GCA ROME | MILAN | LONDON | MADRID | BRUSSELS | AMSTERDAM | OSLO | MOSCOW | VLADIVOSTOK
NEW YORK | SILICON VALLEY | LOS ANGELES | ABU DHABI | HONG KONG | TOKYO
#7 Financing mechanismsBond, green bond
Funds & Finance for Smart Cities
OV | GCA ROME | MILAN | LONDON | MADRID | BRUSSELS | AMSTERDAM | OSLO | MOSCOW | VLADIVOSTOK
NEW YORK | SILICON VALLEY | LOS ANGELES | ABU DHABI | HONG KONG | TOKYO
Funds & Finance for Smart Cities
#7 Financing mechanismsBond, green bond
OV | GCA ROME | MILAN | LONDON | MADRID | BRUSSELS | AMSTERDAM | OSLO | MOSCOW | VLADIVOSTOK
NEW YORK | SILICON VALLEY | LOS ANGELES | ABU DHABI | HONG KONG | TOKYO
#7bis Financing mechanisms
Up to date there are convenient forms of debt, equity and guarantees, which could income from public financial
institutions: The EIB* Financial Instruments, possibly blended with EC grants, such as: Investment loan, Mezzanine and Senior loan Framework loan, Equity investment, Intermediated
loans, Investment platform.*the largest supranational borrower and lender in the world and the only international financial institution politically
accountable to the EU
Funds & Finance for Smart Cities
OV | GCA ROME | MILAN | LONDON | MADRID | BRUSSELS | AMSTERDAM | OSLO | MOSCOW | VLADIVOSTOK
NEW YORK | SILICON VALLEY | LOS ANGELES | ABU DHABI | HONG KONG | TOKYO
#7ter F&F mechanisms
Funding and Financing instruments are the vehicle used to pay for and generate revenue to service costs related to traditional
infrastructure development and transitions.
Case study: - IoT and Blockchain cryptocurrency transactions for energy
- Car2go business model vs City net revenues- Monetizing BigData revenues
Funds & Finance for Smart Cities
OV | GCA ROME | MILAN | LONDON | MADRID | BRUSSELS | AMSTERDAM | OSLO | MOSCOW | VLADIVOSTOK
NEW YORK | SILICON VALLEY | LOS ANGELES | ABU DHABI | HONG KONG | TOKYO
#8 Role of Private Equity
According to latest financial literature “Private Equity is the new black”.
The biggest firms might become the new banks. They are not linked with deposit and short-term funding, but they raise money from
long term investors such as insur. co. or pension funds.Over the last 10ys private credit is the most performing, vice versa
Real Estate and Venture Capital are the worst.
Funds & Finance for Smart Cities
OV | GCA ROME | MILAN | LONDON | MADRID | BRUSSELS | AMSTERDAM | OSLO | MOSCOW | VLADIVOSTOK
NEW YORK | SILICON VALLEY | LOS ANGELES | ABU DHABI | HONG KONG | TOKYO
#9 BMs&FSs customiz. process
SC renovation process in business model will encompass the creation of new
types of jobs and a green local value chain, as a baseline milestone of a valuable
and bankable platform for innovation.
Disruptive business model will be not only on canvas but bankable, having
evaluated since the co-design phase the gap analysis, underpinning all the
constraints and all the bottlenecks (regulatory, financial, technological and
social). The feature is scalable and replicable ready-to-market business model,
crossing investor’s sentiment, duly highlighting the de-risk of the implemented
technologies.
Funds & Finance for Smart Cities
OV | GCA ROME | MILAN | LONDON | MADRID | BRUSSELS | AMSTERDAM | OSLO | MOSCOW | VLADIVOSTOK
NEW YORK | SILICON VALLEY | LOS ANGELES | ABU DHABI | HONG KONG | TOKYO
#9 BMs&FSs customiz. process
Funds & Finance for Smart Cities
OV | GCA ROME | MILAN | LONDON | MADRID | BRUSSELS | AMSTERDAM | OSLO | MOSCOW | VLADIVOSTOK
NEW YORK | SILICON VALLEY | LOS ANGELES | ABU DHABI | HONG KONG | TOKYO
#9 BMs&FSs customiz. process
We are still committed is setting a customized financing schemes settled for the integrated infrastructure use.
Basically, it is a Revenue Sharing Stabilization Mechanism, enabling new public private partnership models for front-end investment and revenue sharing,
including pay-for-performance related to service improvements or access to services.
Funds & Finance for Smart Cities
OV | GCA ROME | MILAN | LONDON | MADRID | BRUSSELS | AMSTERDAM | OSLO | MOSCOW | VLADIVOSTOK
NEW YORK | SILICON VALLEY | LOS ANGELES | ABU DHABI | HONG KONG | TOKYO
#9 BMs&FSs customiz. process
Emerging ESCOs Business Model are deploying local value chains and new risk, financing and revenue allocation among players: enablers, Esco, TSO/DSO/SMO,
local authorities.
The scientific literature has identified the most common identified barriers:
- Market- Information
- Financial barriers- Institutional, administrative and structural
Funds & Finance for Smart Cities
OV | GCA ROME | MILAN | LONDON | MADRID | BRUSSELS | AMSTERDAM | OSLO | MOSCOW | VLADIVOSTOK
NEW YORK | SILICON VALLEY | LOS ANGELES | ABU DHABI | HONG KONG | TOKYO
#10 Emerging ESCOs BMs
Innovation in ESCOs Business Model is currently underpinning four main domain as the key umbrella enabling system.
1. The Value proposition2. The Revenue model
3. The Customers and market segment4. The Risks
Funds & Finance for Smart Cities
OV | GCA ROME | MILAN | LONDON | MADRID | BRUSSELS | AMSTERDAM | OSLO | MOSCOW | VLADIVOSTOK
NEW YORK | SILICON VALLEY | LOS ANGELES | ABU DHABI | HONG KONG | TOKYO
Funds and Finance Smart Cities
#10 Emerging Esco BMs
Funds & Finance for Smart Cities
#10 Emerging ESCo BMs
Through One-stop-shop ContractingWith performance and credit risk
Through Energy Performance ContractingWith performance and credit risk
OV | GCA ROME | MILAN | LONDON | MADRID | BRUSSELS | AMSTERDAM | OSLO | MOSCOW | VLADIVOSTOK
NEW YORK | SILICON VALLEY | LOS ANGELES | ABU DHABI | HONG KONG | TOKYO
Funds and Finance Smart Cities
#10 Emerging Esco BMs
Funds & Finance for Smart Cities
#10 Emerging ESCo BMs
Through Energy Performance ContractingWith performance, energy price and credit risk
Through Energy Performance ContractingWith performance and credit risk
OV | GCA ROME | MILAN | LONDON | MADRID | BRUSSELS | AMSTERDAM | OSLO | MOSCOW | VLADIVOSTOK
NEW YORK | SILICON VALLEY | LOS ANGELES | ABU DHABI | HONG KONG | TOKYO
Funds and Finance Smart Cities
#10 Emerging Esco BMs
Funds & Finance for Smart Cities
#10 Emerging ESCo BMs
Underlining the innovation in distributed energy resources and smart meters operators
OV | GCA ROME | MILAN | LONDON | MADRID | BRUSSELS | AMSTERDAM | OSLO | MOSCOW | VLADIVOSTOK
NEW YORK | SILICON VALLEY | LOS ANGELES | ABU DHABI | HONG KONG | TOKYO
Muchas Gracias
Alessandra CassisiAngelo Giordano
Officinae Verdi GroupFinancial AdvisersROME | VIA TIRSO 14
LONDON | THE SHARD, 32 LONDON BRIDGE STREET
OV | GCA ROME | MILAN | LONDON | MADRID | BRUSSELS | AMSTERDAM | OSLO | MOSCOW | VLADIVOSTOK
NEW YORK | SILICON VALLEY | LOS ANGELES | ABU DHABI | HONG KONG | TOKYO
[email protected]@ovaerdi.com