Workshop for CZ Financial Institutions: Financing Energy Efficiency & EEFIG

Workshop for CZ Financial Institutions: Financing Energy Efficiency & EEFIG Prepared by Peter Sweatman, CEO - Climate Strategy Prague Energy Efficiency Finance Meeting Updated for Monday, 8 th December 2014, Prague

Objectives for this Workshop Introduction to the Energy Efficiency Finance Challenge in CZ Buildings Energy Efficiency Financial Institutions Group (EEFIG) Approach Financial Instruments in the Context of EU Structural and Investment Funds 2014-2020 Establish a common diagnosis of the current situation and identify some key activities which can support a solution set Q&A

Climate Strategy & Partners Executive Management @ClimateSt Founded in 2009, Climate Strategy is a Madrid Spain based consulting firm specialized in energy efficiency and the transition to a low carbon economy Climate Strategy provides strategic advice and first class project execution to our clients in areas of: CS Clients Include: CS CEO = Peter Sweatman Engineer from Cambridge University 9 years at JPMorgan 5 years as Social Entrepreneur 5 years as MD for Iberia for Climate Change Capital 6 years running Climate Strategy 7x White Papers on Energy Efficiency Finance Co-author of Spanish National Strategy for Buildings Renovation 190 public lectures/ speeches 90+ press articles Energy Efficiency Clean Technology Clean Energy Policy & Finance Environment Sustainability Climate Strategy has focused on Energy Efficiency financial structures and related projects for a large part of its work over the last 6 years including 7x white papers, project structuring, policy support work in multiple countries and at EU level. In addition, CS s CEO has presented 190+ key-notes, speeches and high-level presentations on Energy Efficiency and the Transition to a Low Carbon Economy and lectures at IE University, ICAI/ Comillas and the European University Institute. Peter is also advisor to Climate Lab, Climate Bonds Initiative, Network for Sustainable Financial Markets, JCI Buildings Institute, EE Global and has generated over 90 press articles.

Part 1: Introduction to the Energy Efficiency Finance Challenge in CZ Buildings

CZ Buildings: 44% of Czech Families live in Single Family Homes in 195 million m2 SINGLE FAMILY HOMES Terraced 257,262 16% Semi-Detached 133,877 9% Total 1.5 million homes 75% Detached and mainly of 2- storeys 1.9 million apartments (ie families) approx. 100m2 per family Total of 195 million m2 25% already renovated Detached 1,163,655 75% Census and the count of houses and apartments from CCHA,2011. 4

CZ Buildings: 56% of Czech Families live in Multi- Family Apartment Blocks in 156 million m2 Pre 1919 26,077 12% 1920-1945 27,775 13% Other 4,682 2% 2001-2011 12,674 6% 1981-2000 38,042 18% Total 211,000 apartment blocks 2.4 million apartments (ie families) of 65m2. Total of 156 million m2 40% already renovated 35,000 30,000 25,000 20,000 15,000 10,000 5,000 1946-1960 30,573 15% Census and the count of houses and apartments from CCHA,2011. 1961-1980 71,429 34% 5 - # Storeys

CZ Buildings: 263 million m2 of Tertiary Buildings of which half are heated with 50% potential savings Services/ Education 19% Warehouses 11% Residential 2% Agricultural 3% Total 600,000 tertiary buildings Average floor area of 1,257 m2 Commercial 11% Livestock 2% Industrial 13% Administration 19% Total of 263 million m2 of which 49% is heated 50% of heating load (85% of energy usage per building) can be saved. Source: Chance for Buildings Renovation Strategy April 2014 Hotels 2% Shopping 8% Family Holiday 10% 6

Chance for Buildings Study of Energy Savings across Various Buildings Segments Water 12 10% Energy Savings (PJ) Lighting 3 3% Potential savings of 45-81% of Heating load for Residential buildings (77-140 PJ) Potential savings of 30% of Water heating load (12 PJ) Potential savings of 60% of Lighting (3.4 PJ) Source: Chance for Buildings Renovation Strategy April 2014 Heating 109 87% 7

Chance for Buildings Estimates of Total Funding 1.5 bn per annum to Renovate CZ Buildings 30 Total Expenditure for Renovation (by Type, Euro billions) To renovate CZ buildings over 30-40 years requires Euro 1.5-2 bn investment each year: Recommended Standard = Euro 1.05bn (RES) and Euro 0.37 (TER) 40 years Passiv Standard = Euro 1.55bn (RES) and Euro 0.37 (TER) 40 years. 25 20 15 10 5 0 SFH ENVELOPE SFH TECH Passiv MFH ENVELOPE Recommended MFH TECH TERTIARY Source: Chance for Buildings Renovation Strategy April 2014 8

Part 2: Energy Efficiency Financial Institutions Group ( EEFIG ) Approach

EnergyEfficiency-the first fuel for the EU Economy How to drive new finance for energy efficiency investments Part 1: Buildings (Interim Report)

Introduction The Energy Efficiency Financial Institutions Group( EEFIG ) was established as a permanent working group by the European Commission, in late 2013 as a result of the dialogue between DG Energy and UNEP FI, as both institutions were engaging with financial institutions to determine how to overcome the well documented challenges inherent to obtaining long-term financing for energy efficiency. EEFIG aims to create dialogue between policy makers and representatives of the financial sector as well as energy efficiency experts, and ultimately increasing energy efficiency finance. The group is currently comprised of 51 individuals representing 30 institutions. EU Commission tasked EEFIG to deliver an Interim Report which addresses three key questions: 1 2 3 What are the most important challenges to overcome? Who would be the right party to address them? What should the European Commission/EU do? Interim report summarizes work and thinking over 6 months - October 2013 and March 2014 EEFIG will deliver a final report in November 2014 which will deepen its work in the buildings sector and also consider energy efficiency investments in Small and Medium Sized Enterprises (SMEs) and Industry in Europe. 11

EEFIG Members Allianz Real Estate ASN Bank Bank Nederlandse Gemeenten(BNG) BNP Paribas Investment Partners Buildings Performance Institute Europe(BPIE) Caisse des Dépôts Cassa Depositi e Prestiti S.p.A. CDC Climat Cecodhas Housing Europe Climate Strategy and Partners Deutsche Bank Group E3G European Commission EBRD EIB Energy Managers Association EuroACE EUROBANK ERGASIAS SA European Association of Public Banks(EAPB) Hermes Real Estate Institutional Investors Group on Climate Change(IIGCC) ING Commercial Banking KfW Bankengruppe Netherlands Enterprise Agency(RVO.nl) NRW.BANK Royal Institution of Chartered Surveyors(RICS) Société Générale Triodos Bank UniCredit Group United Nations Environment Programme(UNEP) and its Finance Initiative(UNEP FI). 12 EEFIGis supported by Climate Strategy and Partners (www.climatestrategy.com) which was contracted to support the coordination and drafting of this report on behalf of EEFIGand whose Chief Executive is also a member of the group. EEFIG meetings are convened and chaired by DG Energy

Background / Framework Rationale for scaling up Energy Efficiency Investments in Europe: Energy Efficiency is described as the EU s biggest energy resource One of the most cost effective ways to enhance the security of its energy supply and decrease the emissions of greenhouse gases and other pollutants Energy efficiency investments are characterisedby: a. Their capacity to bring direct energy returns b. Bring additional value streams to private owners and asset operators c. Significant public benefits in terms of: Increased employment Lower emissions Increased energy security and reduced dependence on foreign energy imports Improvements to a country s fiscal balance Key Facts a. 2011, global energy efficiency investments across all sectors totaled $300bn b. A 2012 Eurima report estimates that 60-100 billion is needed to be invested annually in EU buildings to achieve Europe s 2020 energy efficiency targets c. A 2014 Ceres report denotes that the additional investment required beyond business as usual to limit temperature rises to a 2⁰C scenario are up to another $300 billion per annum between 2010 and 2020 d. Europe s Energy Efficiency Plan expects to deliver 2 million jobs Potential annual financial savings estimated at Euro 1,000 per European household 13

Drivers of Demand for and Supply of Energy Efficiency Investments in EU Buildings Methodology Step 1 Identification of the key drivers to convert energy efficiency into a preferred investment area Step 2 Step 3 Prioritisation of the importance ofthedriversthroughasurveyto allow EEFIG members to rank them Distinguishing between policy led vs. market led activities D r iv e r s EEFIG members made over thirty written submissions containing examples and analysis of existing and emerging financial instruments The group discussed and identified drivers affecting: demand(25) and supply(23) 14

Drivers of Demand for and Supply of Energy Efficiency Investments in EU Buildings EEFIG ranking of key drivers affecting demand and supply of energy efficiency investment by market segment Demand Supply All Financial Intitutions Only All Financial Intitutions Only 1 Standardization 1 Buildings Regulation, Labeling and Energy Performance Certificates 1 Standardization 1 Regulatory Stability 2 Clear Business Case 2 Clear Business Case 2 Regulatory Stability 2 Standardization 3 Effective enforcement of regulation 3 Standardization 3 Increased Investor Confidence & Change in Risk Perception 3 Use of MFF structural funds 4 Awareness at Key Decision Maker Level & Leadership 4 Transaction costs / simplicity 4 Transaction costs / simplicity 4 Measurement, Reporting & Verification (MRV) and Quality Assurance 15 5 Buildings Regulation, Labeling and Energy Performance Certificates 5 Effective enforcement of regulation 5 Measurement, Reporting & Verification (MRV) and Quality Assurance 5 Transaction costs / simplicity

Recommendations and Conclusions Summary of EEFIG Recommendations: 1 Thefullbenefitsofenergyefficientrefurbishmentsofbuildingsmustbecapturedandwell-articulated, with evidence, and as a priority, to key financial decision makers(public authorities, buildings owners and managers and for householders) 2 ProcessesandStandardsforEnergyPerformanceCertificates,EnergyCodesandtheirEnforcement need to be strengthened and improved 3 Itmustbeeasytogettherightdatatotherightdecisionmakers 4 Standardsshouldbedevelopedforeachelementintheenergyefficiencyinvestmentprocess 5 Priority and appropriate use of EU Structural and Investment Funds and ETS revenues through public-private financial instruments from 2014-2020 will boost investment volumes and help accelerate the engagement of private sector finance through scaled risk-sharing 16

Recommendations and Conclusions Recommendations and conclusions to Policy Makers: 1 2 3 4 5 6 Existing Buildings Regulations should be fully implemented, harmonized and consistently enforced across EU Member States Future Regulatory Pathways for EU Buildings should provide concerted and consistent regulatory pressure to improve buildings efficiency: High quality decisions and low transaction costs can only be delivered by easily accessible data and standard procedures Reporting, accounting and procurement procedures must facilitate, and not hinder, appropriate energy efficiency investments in public buildings The at-scale energy efficiency upgrade of residential buildings can only happen with a concerted address of the specific investment demand and supply drivers of this segment and the engagement and alignment of retail distribution channels The targeted address of energy efficiency investment supply and technical assistance through the smart deployment of Structural and Investment Funds 2014-2020 and Horizon 2020 17

Recommendations and Conclusions What should the European Commission/ EU do? 1 2 3 4 5 6 Ensure effective transpositions of the existing EU Directives and effective local enforcement procedures regarding energy performance in buildings(incl performance certification) Deliver regulatory stability for EE investment in building by providing long term regulatory visibility re energy efficiency especially in the context of the 2030 Climate and Energy package Address the need for high quality buildings performance data and standards through Commission support of best practice policies and initiatives within Member States Initiate process to remove accounting, reporting and procurement hurdles for investment in energy efficiency investments; create standard procurement procedures for EU public buildings Benchmark and compare relative success of retail residential Energy Efficiency investment programmes in the Member States to ensure sharing and replication of standards and best practices Ensure that MS connect the funding streams for national Buildings Renovation Roadmap(EED Art. 4) with financial instruments available in the context of structural funds/horizon 2020 to support energy efficiency, funds deriving from Energy Efficiency Obligation Schemes(Art. 7 EED) and funds from ETS 18

Links for more information This report can be downloaded at: ec.europa.eu/energy/efficiency/studies/doc/2014_fig_how_drive_finance_for_economy.pd Commissionwebsiteonenergystrategy: http://ec.europa.eu/energy/index_en.htm Pleasedirectyourcommentsto: feedback-effig-report@ec.europa.eu This document has been prepared for the European Commission by the members of the Energy Efficiency Financial Institutions Group ( EEFIG ) as listed herein. The views and opinions expressed herein are wholly those of the EEFIG group reached by consensus at the time of writing and do not necessarily reflect those of the Commission, the institutions which EEFIG members represent nor are necessarily fully those of the individual members of the group. These views and opinions are subject to change without notice. The EEFIG, The Commission, Climate Strategy nor any individual member of EEFIG can be held responsible for any use which may be made of the information contained herein. In addition, the examples and case studies described in this document represent the views of the members of EEFIG and are based on information gathered by these members; the references used to develop these illustrative examples (and which are quoted in this study) should always be considered as the most accurate and complete source of information. 19

Part 3: Financial Instruments in the Context of European Structural and Investment Funds 2014-2020

Financial Instruments in EU Terminology Definition Union measures of financial support provided on a complementary basis from the budget in order to address one or more specific policy objectives of the Union. Such instruments may take the form of: equity or quasi equity investment, loans or guarantees, or other risk sharing instruments, and may, where appropriate, be combined with grants. * Regulation 966/2012, Title I of Part One. Art. 2 (p) (own accentuation) Essential Requirements 1. Should focus on situations of market failure and imperfect market conditions (ie where projects that are principally bankable receive no funding because they are perceived to be too risky) 2. Should not crowd out private finance * Regulation 966/2012, Title I of Part One. Art. 140 (2) 21

2007 2013, Lessons learnt Positive Negative Need for + Leverage of private finance, positive effects on access to finance during financial crisis + Additional levers for EU policy objectives + Provision of experts skills capacity building across governance scales + Revolving funds improve the quality of projects and fiscal discipline - Inconsistencies and overlaps - Concerns about the additionality of actions (deadweight situations) - Lack of capacity and resistance due to perceived complexity and difficulty - Lack of information, visibility and acceptance need for cultural change underestimated 1.Clear, coherent regulatory framework 2.Fewer instruments with streamlined and simplified implementation modalities 3.Greater visibility and transparency 4.New risk-sharing agreements to leverage higher finance volumes Financial instruments are no silver-bullet 22

CZ Lessons Learned: Czech Republic Green Investment Fund Overview Between 2009 and 2012 the Czech Republic invested about 550m ($710m) in the Green Investment Scheme which provides grants covering up to 50 percent of residential insulation costs A new Green Investment Scheme was launched in January 2013 (2013-2020 period) 70 percent of the overall volume of funds is earmarked for the comprehensive refurbishment of private buildings, Results as of 2012 250,000 houses improved CO 2 emission reduction of 1.1 Mt annually Energy savings 6.3 PJ (1.75 TWh) annually 3.7 PJ (1 TWh) heat generated from renewable sources 2.2 kt reduction in fine particle matter 30,000 jobs created or retained and the remaining 30 percent will be used for public service buildings 23

Potential Buildings Investment Funds from ESIF 2014-2020 an estimated CZK 8.1-8.6 bn p.a. Program Name Green Savings program (for SFH, source: EU ETS revenues) Estimated Allocation 2014 2020 bn CZK 15-20 (?) OP Environment (for public buildings, schools, etc.) 14 OP Enterprise, Innovation, Competitiveness (for industrial, commercial buildings) total allocation 20, perhaps 10 into buildings Integrated regional OP (for MFH) 17 OP Prague (for public buildings in Prague) 1 TOTAL CZK 57-62 bn

Buildings Stakeholders see the Engagement of Private Sector Finance as KEY to deliver x4.5-6 leverage To renovate CZ buildings over 40 years requires leverage of public funds of between x 4.5 (recommended) up to x 6 (Passiv) Standards. 9 8 7 6 5 4 3 2 1 0 Investment for Renovation 2014-2020 (Euro billions) x4.5 x6 PUBLIC FUNDS RECOMMENDED PASSIV Residential Tertiary Source: Chance for Buildings Renovation Strategy April 2014 25

Clearly, Different FIs are needed for Different Market Segments Define the types of final recipients Private Public Households Companies Administration buildings (e.g. local, regional national authorities) Housing (e.g. social housing) Other public buildings (e.g. schools, hospitals) Multi-apartment buildings Small building / houses Optimal financing instruments Preferential loans Renovation loan Grants + loans Guarantees Preferential loans Grants + loans Guarantees Preferential loans Guarantees Equity EPC Preferential loans Guarantees Equity EPC Preferential loans Grants + loans Preferential loans Guarantees Equity EPC Project examples KredEX (Estonia) Jessica Fund (Lithuania) REECL (Bulgaria) Retrofit South East (UK) SlovSEFF (Slovakia) Enegies POSIT IF (France) CEEF (Hungary KfW (Germany) REECL (Bulgaria) CEEF (Hungary) BgEEF (Bulgaria) SlovSEFF (Slovakia) FIDAE (Spain) CEEF (Hungary) EESF (Bulgaria) Re:FIT (UK) BgEEF (Bulgaria) REDIBA (Spain) ELENA Modena EESF (Bulgaria) Use of ERDF for social housing, France Re:FIT (UK) BgEEF (Bulgaria) EESF (Bulgaria) 26

And while some of the Barriers are Financial others are lack of drivers in some Market Segments WhiletheEUpolicy contextiscreating stronglegislative driversforaction,a largenumberof barriersexisttose financing in buildings 2 3 Particular Barriers Affecting the Renovation Market in Regions / Countries 1 Financial Barriers Institutional and administrative barriers Information and awareness barriers Limited access to finance, high upfront costs, relatively long pay back periods, higher perceived credit risk associated with SE investments, and competing priorities for property owners Such as regulatory and planning issues, and Complexities due to the variety of stakeholders involved Due a general lack of understanding and expertise regarding SE Financing and its benefits amongst the various players (MAs, financial institutions, public and private final recipients) 4 The issue known Distribution as the Channels and split incentive Partners facing landlords and their tenants as well as other investors and which leads to a disconnect between those making the investment and those benefiting from the energy savings 27

Member State Process Steps for Engagement same for Rejuvenating Examples: 1 2 3 4 5 Identify which projects and therefore stakeholders are likely to benefit from ESIF finance Identify the core communication issues and processes Engage Thoughtleaders in the Development of Solutions Ensure that Sector Solutions which can be funded by ESIF are well researched Note the differences between ex-ante assessments and EED processes Buildings Refurbishments (by segment): Stakeholders: Regional Housing Authorities, Refurbishment teams inside Construction Companies, Installers, Buildings Owners, ESCOs etc Which have been highlight by prior EE-funds or past experience and ensure NGO community is onpoint and taking an interest in new ESIF design. and their pro-active Engagement in ESIF FI design and (ideally) proven in practice. The ex-ante assessment may identify a huge market for EE renovation in Buildings but the OP may not dedicate appropriate funds to address it. 28

Most Successful EE Funds take many iterations to work well: CZ is already in this process There is no right answer for ESIF and what is right in one country can at best serve as a guide for others requiring much tailoring and adjustment to fit a different market. 1 2 3 4 5 ESIF FI strategy for the MS: High Level Position/ Messaging Context NEEF Goals and Outcomes: Financial Product Distribution Channels and Partners What are the target political and physical outcomes targeted by the FI and how do these fit the national MS context. Describe the investment climate in the market segment at which the NEEF is targeted and what the gap is that FI fills. What does success for the FI look like and what does that mean in terms which stakeholders can understand (political objectives met, business objectives met, client objectives met). What financial product(s) does the Fund offer? How will the ESIF FI build its pipeline and connect to its end-clients? 29

Structural Components of National Funds for Buildings Renovation Mix & Match Alternative Finance Structure Example 30

General Conditions of Off the Shelf Financial Instruments for 2014-2020 for MFH Draft Outline of Off-the-Shelf FIs and the Renovation Loan (from July 2013 Draft Standard T&Cs) Easier to Execute FI = Off-the-Shelf The off-the-shelf instruments are designed using the limits imposed by the different regulations, in particular state aid; If the MA wants to set-up an instrument with different conditions, it has to be tailor made and the MA has to check if it is done accordingly with different regulations; Considered as a good starting point to develop other financial instruments and approaches. Five initial off-the-shelf Financial Instruments: 1. Loan for SMEs based on a portfolio risk sharing loan model ( RS Loan ) 2. Guarantee for SMEs (a partial first loss portfolio or Capped guarantee ) 3. Equity Investment fund for SMEs and start-up companies based on a co-investment model ( Co-investment Facility ) 4. Loan for energy efficiency and renewable energies in the residential building sector ( Renovation Loan ) 5. Loan for sustainable Urban Development ( UD Fund ). 31

Introduction to the Renovation Loan OTS FI for Multi- Apartment Buildings Draft Outline of Off-the-Shelf FIs and the Renovation Loan (from July 2013 Draft Standard T&Cs) Grants Financial Instruments Renovation Loan: An FI made available by the MA in the framework of the operation which is part of the priority axis defined in the programme funded by the ESIF and defined in the context of an ex-ante assessment: FIs at EU level FI at national / regional level Primarily aimed at multi-apartment buildings Complementary grant assistance; Off-the-shelf Customized Long term subsidised loan conditions; and/or Upfront advisory support and funding to prepare and implement full envelope building renovations. H2020 / COSME Renovation loan Preferential loans Credit guarantees Assumes two key conditions in Member State: A financing market in which banks are essentially the only source of funding, but where this funding is either too little, too short term, too costly or otherwise inappropriate for the long term payback nature of the projects being financed; Equity An inefficient system of identifying and procuring the works on behalf of multiple apartment owners; 32

Some of the Observed Success Factors among existing FIs Successful Energy Efficiency Funds for Buildings Renovation have certain common characteristics which are listed here: 1 2 3 4 Success Factors: Tailored FI for Market Segment Integrated and Local Targeted Marketing Swift and Easy one stop Broad Distribution Specific FI designed for a particular, well identified market segment (eg. Low income, Multi-family Apartments in blocks) needs LT, low interest plus grant Local marketing with well trained Energy auditors, licensed to discuss integrated finance package and using peer-to-peer techniques based upon local culture. Whole renovation and finance provided in a one stop swift and easy process without delay/ large amounts of paperwork. Strong connection to local Energy Auditor networks. Multiple and broad distribution channels through networks directly connected to and near the targeted communities and owners. 5 Long-term Commitment and Visibility Market demand takes time to build-up and takes time. Multiannual commitments with sufficient funding is necessary. 33

Part 4: Establish a Common Diagnosis and Solution Set and Q&A for CZ

Example: Estonia s KfW the KredEx Revolving Fund Estonian Housing Stock - Overview 75% population lives in multi apartment buildings These are of low quality and low energy efficiency Buildings account for 40% of energy use Average energy consumption per year in buildings which have not been renovated 200-220 kwh/m 2 KredEX Financial Measures Grants From state From municipalities Low interest rate loan Beneficiaries can combine the measures ERDF to fund equity 17,7 mio Fund 72 mio Favorable funding to the commercial banks State guarantee CEB loan 28,8 mio State loan 16 mio KredEx funds 9,5 mio Credit from Fund to the Bank Credit to 2 banks Maturity: 20 years Annuity loan Maximum limit of risk margin for Banks Terms for credit to multi-apartment buildings Fixed interest rate for end-beneficiaries Bank is responsible for credit risk of multi-apartment buildings 35 EE loan to HOA, Commercial bank takes the risk of lenders

KredEx Revolving Fund Multi-family dwelling targets with Loan + Grant & Guarantees Renovation Loan Multi-apartment buildings: at least 3 apartments Main purpose - energy efficiency (at least 20% energy saving for the buildings up to 2000 m² or 30% for bigger buildings) Self-financing 15% (grant or own funds or loan) Energy audit is obligatory, renovation according to energy audit Supervisory is obligatory Loan maturity: up to 20 years Interest: from 2013 ~ 3,5%, before up to 4,5% fixed for 10 years, average 4% No collateral is needed, credit against cash flow Grant for Reconstruction Fund for the grant from Green Investment Scheme (selling AAU) An Assigned Amount Unit (AAU) is a tradable 'Kyoto unit' or 'carbon credit' representing an allowance to emit greenhouse gases comprising one metric tons of carbon dioxide equivalents calculated using their Global Warming Potential In total 30 million ~ 140 million for investment Goal is to renovate multi-apartment buildings completely, to achieve: energy saving from heating costs, considering all requirements for indoor climate Achieve higher energy class To increase use of renewable energy Decision by buildings: at least 50% +1 one owner at general assemble, decision with simple majority 36

Estonia Good results from small beginnings Results combined as of 2013 635 buildings, 23 500 apartments, 54 000 inhabitants Ca 1 550 000 m² (6,7% from total ap. m²) Total 49 mio credit, 20,8 mio grant Investment 87,2 mio, average 137 000 Expected saving 39%, 75 GWh per year (1 year production of Kuressaare Soojus) Expected saving 20 years 1 500 GWh 390 renovated, ca 110 in process Changes in behavior: From single works to complex renovation Heating costs are measured by apartments 37

Further Details on the Structure of an OTS Renovation Loan Draft Outline of Off-the-Shelf FIs and the Renovation Loan (from July 2013 Draft Standard T&Cs) Long term, low interest funding provided using European Structural and Investment Funds (ESIF), with an appropriate level of risk sharing by the financial intermediary determined through a competitive process and provided in the form of a shared loss component; Hands-off Management: MA represented in supervisory committee of the Renovation Loan but not participating directly in individual decisions. Transparency and Market Practice: Renovation Loan shall have a governance structure that allows for decisions concerning credit and risk diversification to be made transparently and in line with relevant market practice. Can be used together with grants assuming final beneficiary benefits. 38

What discussion topics result? Ensuring EE is adequately supported within the context of EU Structural & Investment Funding 2014-2020 under Thematic Objective 4; Questions regarding an Ex-Ante Assessment for the use of Financial Instruments; Models which work, and some which may not in the local context; Identify the most active success features of existing energy efficiency investment programmes; Work to build confidence and capacity in energy efficiency investments at managing authority level; Focus on optimal Energy Efficiency and Energy Savings Criteria as opposed to Minimum Standard Start where it s easier and build-up 39

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