Immature private sector ESCO Can address financing Need to create a Where will such a Ukraine Public 4. Public ESCO or super industry, but interest/demand to issues and build ESCO new organization public ESCO be ESCO (EBRD) ESCO develop ESCO industry capacity located? Croatia HEP ESCO Need to provide (WB/GEF), Contracting between public ESCO funding Will donors be Armenia, Uruguay, and public sector entities may be interested in Needs to operate EESL (India) easier than with private sector service funding such an efficiently and providers entity? avoid acting as monopoly Underdeveloped public/ municipal Builds commercial Relies on strong Is there a suitable Brazil 5. Dedicated credit line credit market lending market by banking partner development India (municipal with development bank demonstrating public with incentive and bank? High commercial bank lending rates infrastructure fund) agencies can repay ability to proactively and low tenors How many public Mexico develop pipeline Allows public agencies to agencies can Existence of credible development Turkey (proposed) and offer good undertake own borrow and are bank willing to lend for EE and financial products procurement and creditworthy assume repayment risks implementation Serves only Municipalities must have ability and creditworthy Allows for lower interest willingness to borrow municipalities rates Public agencies able to retain energy Some development Funds can revolve cost savings banks do not making it more conduct proper risk sustainable assessments and appraisals Well-developed banking sector, Leveraging of private Needs Will the KfW credit line in 6. Dedicated EE credit willingness of banks to accept risks funds municipalities or participating Serbia line with commercial and EE as line of business ESCOs that have financial Utilization of existing Hungary financial institution(s) borrowing capacity institutions provide Sufficient market activity to develop banking infrastructure for China (credit and loans to municipal project pipeline financing public sector Turkey collateral) utilities & public Need for parallel TA to develop strong Ukraine agencies? need to be demand, create sustained quality Uzbekistan willing to lend to How many public pipeline public sector agencies are creditworthy and have borrowing capacity?
4. Public ESCO or super ESCO Immature private sector ESCO industry, but interest/demand to develop ESCO industry Contracting between public ESCO and public sector entities may be easier than with private sector service providers Can address financing issues and build ESCO capacity Need to create a new organization Need to provide funding Needs to operate efficiently and avoid acting as monopoly Where will such a public ESCO be located? Will donors be interested in funding such an entity? Ukraine Public ESCO (EBRD) Croatia HEP ESCO (WB/GEF), Armenia, Uruguay, EESL (India) 5. Dedicated credit line with development bank Underdeveloped public/ municipal credit market High commercial bank lending rates and low tenors Existence of credible development bank willing to lend for EE and assume repayment risks Municipalities must have ability and willingness to borrow Public agencies able to retain energy cost savings Builds commercial lending market by demonstrating public agencies can repay Allows public agencies to undertake own procurement and implementation Allows for lower interest rates Funds can revolve making it more sustainable Relies on strong banking partner with incentive and ability to proactively develop pipeline and offer good financial products Serves only creditworthy municipalities Some development banks do not conduct proper risk assessments and appraisals Is there a suitable development bank? How many public agencies can borrow and are creditworthy Brazil India (municipal infrastructure fund) Mexico Turkey (proposed) 6. Dedicated EE credit line with commercial financial institution(s) Well-developed banking sector, willingness of banks to accept risks and EE as line of business Sufficient market activity to develop project pipeline Need for parallel TA to develop strong demand, create sustained quality pipeline Leveraging of private funds Utilization of existing banking infrastructure for financing public sector Needs municipalities or ESCOs that have borrowing capacity (credit and collateral) need to be willing to lend to public sector Will the participating financial institutions provide loans to municipal utilities & public agencies? How many public agencies are creditworthy and have borrowing capacity? KfW credit line in Serbia Hungary China Turkey Ukraine Uzbekistan