Financing Industrial Energy Efficiency
EEIPFin Discussion, Hannover Fair, 24 Apr 2012
MOBILIZING PRIVATE CAPITAL
Financing is often seen as the main barrier to achieve a more energy efficient industry in
Europe. To address some of the challenges, the EEIP Finance Consortium (EEIPFin), part
of the Energy Efficiency in Industrial Processes (EEIP), a neutral, not-for-profit platform
for business and policy in Europe, is facilitating a dialogue between private investors,
banks, companies and EU policymakers. The goal is to promote the “business case” for
industrial energy efficiency investments.
Following the EEIPFin roundtable in Brussels on 10 November 2011, the Hannover Fair
2012 panel discussion was intended to broaden the debate with a specific focus on
access to external financing for SMEs. The event was hosted by Hannover Fair Global
Business & Markets and supported by Siemens Industry, Thomas Industrial Media,
DENEFF, Finnfjord and Elkem.
Building on the three insights from the November 2011 roundtable (Awareness,
Customer Orientation, Financial Mechanism), the panel discussion highlighted a fourth
– the “Expertise Layer”.
Conclusions as summarized by Mr Rod Janssen, EEIPFin Chairman.
Awareness => Education
Awareness => Education
• More than just awareness of energy
efficiency benefits is needed. Further
focus is welcome on education of tools,
opportunities, technologies, costs and risk.
• EU and national policymakers should
give more attention to communicate and
educate businesses on benefits and financial
solutions alike leveraging the broad range
of financing options already in existence,
from equity investments to leasing.
Customer Orientation R
• SMEs need special attention when it comes
to cross-regulations and more ‘horizontal’ 1. One third of SMEs
have difficulties in
policies that touch upon different aspects of accessing capital for
business operation as this could negatively improving their energy
affect energy efficiency receiving deserved
attention. Their technical capacity is much
EVID performance, and this has
become more acute during
more limited than large industry and their the current financial crisis
focus has understandably been more on
market growth than on cost and efficiency 2. Innovative financing tools and
effective interfaces between
improvements. financers and companies
are key – better financial
• Energy Management Systems (EnMS) engineering
could drive energy efficiency awareness
and have positive impact on financing by 3. Banks often need to “fix”
using standards and benchmarks. However, own issues / balance sheets
regulators need to be aware on SME limiting credit availability
for energy efficiency
sensitivity to potential disproportionate
administrative burden and therefore models
with LEEN* need to be assessed.
• The EU should evaluate new risk mitigating
models in addition to the current grant
model, especially frameworks to initiate an
energy efficiency bond market.
• EU, member states and the financial sector
need to assess the impact of Basel III and
Solvency II regulations on energy efficiency
risk assessments and related credit
• EU and member states should deliver a long-
term vision on energy efficiency policies as
predictability is key for financial market and
business investment decisions alike.
• The European Commission should search
for “multiplier-solutions” to better leverage
their financing programs.
• Private banks need to develop better energy
efficiency expertise to be able to evaluate
12 energy efficiency projects and to provide
customized financial solutions as businesses
being more and more concerned about the
impact of energy costs.
4. The policy framework
at both the EU and • Publically supported initiatives such as the
national levels needs to German local energy efficiency networks
be more predictable and (LEEN) need to be linked to financial
stable institutions to combine energy efficiency
benefit assessments and project support
5. There is a considerable with financial solutions.
amount of capital in the
market place. What is needed
are people to structure the • New approaches such as the UK’s Green
financial arrangements Investment Bank need to be explored to
bridge the gap between energy efficiency
6. Even with the obstacles, projects and financing.
energy efficiency is still the
cheapest “energy” source • Investment funds and financial advisory
and the most cost-effective service firms combining energy efficiency
way to reduce greenhouse
gas emissions project evaluation expertise with access to
financial markets should be supported and
7. There is a need for potentially act as a good practice for public
leadership and and private banks to build the expertise
Discussion panelists were:
Georgios Lemonidis, Deputy Head of Unit “Financing Innovation
& SMEs”, DG Enterprise and Industry, The European Commission
Roland W. Chalons-Browne, CEO, Siemens Financial Services
Manuel Dueñas, Deputy Head of Division, Climate Change &
Environment (NPST), European Investment Bank (EIB)
Gil Levy, Partner, Sustainable Development Capital LLP
Simone Loefgen, Business Development, Commerzbank
Energy Efficiency in Industrial Processes (EEIP) is a neutral
not-for-profit platform for business and policy in Europe. Any
in Industrial Processes
views or opinions presented in these conclusions are sole re-
sponsibility of EEIP and do not necessarily represent those of
all the Participants. The discussion was conducted under the
Chatham House Rule. The Participants served in their person-
al capacities and their views do not necessarily concur with
the views of their organisation. www.ee-ip.org
There is much work for all stakeholders to do to address these financing concerns.
But there is a ray of hope at the end of the tunnel.
From governments at all levels, there is a need for a more stable policy framework
and better support mechanisms such as improving technical knowledge
(technologies and financial). There is also a need for clear leadership to explain
convincingly the importance of and the benefits from improved energy
From the financial community (public and private), there is a need to do more
financial engineering to find innovative ways to structure loans and equity
investments in order to increase investments in energy efficiency. Commercial
banks should develop in-house capacity to assess the quality of potential energy
efficiency investments. These financial packages should be better promoted.
This also includes better sharing of best practice examples.
Finally, there is a need for all relevant stakeholders to work together to create a
synergy affect that will convince SMEs and others of the importance of energy
EEIP brought together a wide range of these actors. The debate has only begun.
EEIP continues to discuss and engage on financing
industrial efficiency via EEIP open social media
channels. With a community of more than 10.000, and
voices and opinions from private business and financial
sector alike, the discussion is already making positive
“Europe will never achieve its energy savings targets impact in the EU policymaking circles. Join us on one
until we come to grips with a better investment of EEIP channels.
approach. The discussion showed that there is a
way – that it is less about the funds available than
the financial engineering and the education that
is needed for the full range of stakeholders. It also Don’t forget to save the date for the next EEIP
proved that we need a combination of public support Financing roundtable which will take place in Brussels
and private activity together with a consistent, on 29 November 2012 (date to be confirmed).
predictable policy framework if there is to be long-
EEIPFin Chairman, Rod Janssen