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1

EUSEW

Developing and financing local and regional sustainable energy investments

Juan Alario

Associate Director

European Investment Bank

Local and regional renewable energy investment 2020 and beyond: the need for a level playing field

Committee of the Regions27 June 2013

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2

Large investment potential in low carbon technologies at local and regional level

• From EU Commission, about 50bn EUR/year for RE and 85 bn EUR/year for EE

• A substantial part of the EE and small scale RE investment potential needs to be developed

• RE investments declining

• EE investments low today, but the new EE directive should boost them

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3

EE and RE contribute to key objectives

• Key sectors to achieve the EU energy and climate objectives

• Contribution to economic growth and particularly to employment generation

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4

Regional and local authorities can play a substantial role to promote EE and small RE

• Lowering the barriers to these investments, in particular providing information, TA or regulatory measures (split incentives, etc.)

• Contributing to developing local capacity to deliver these investments, particularly by SMEs

• Facilitate financing, including grants, when required

• Developing large investment programmes, mainly in the public sector

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5

Developing large local/regional EE&RE investment programmes requires:

• Creation of a project implementation unit

• Improve project’s bankability:

– Reduce risks– Bundle small projects– Standardisation– Improve profitability: lower transaction costs and

use grants only when required

• Facilitate the financing of these schemes

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6

The EIB is supporting local and regional initiatives

• Global and framework loans for small projects through Financial Intermediaries

• For large projects direct loans from the EIB

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7

EIB develops joint initiatives with the Commission

• Elena: TA to support local regional authorities for project preparation

• EEEF: Investment fund to support Elena type projects

• Jessica: urban development funds using Structural funds

• New initiative: Deep Green platform: different financial instruments to support EE and small RE

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8

Example: Framework loan for small EE&RE

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9

Example: JESSICA / ELENA - London

• London Energy Efficiency Fund (100M GBP)– Waste Urban Development Fund (UDF)– Energy Efficiency UDF (mainly RE:FIT)

• ELENA supports RE:FIT– ELENA supports 2.9 M EUR– Develop contractual framework for ESCOs

public buildings– Target investment: 115 M EUR

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10

Conclusions

• Local and regional authorities can play a substantial role to develop the large EE&RE investment potential

• However, they need to develop new approaches in order to mobilise the substantial investments required

• EIB can contribute with its finance and expertise