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February 2015
Ways to Drive More Finance for Energy Efficiency Investments

EEFIG report identifies success factors, new policies and financing solutions

| Brussels, Belgium, 26 February 2015 | Today, the Energy Efficiency Financial Institutions Group (EEFIG) co-convened by the European Commission and UNEP Finance Initiative (UNEP FI) launched its final report “Energy Efficiency – the first fuel for the EU Economy: How to drive new finance for energy efficiency investments”. The EEFIG report identifies the critical success factors, policies, market instruments and financing solutions to increase energy efficiency investments in Europe in the buildings, industry and SME sectors. The international landmark study is the result of 16 months of work of more than 120 active participants representing finance, policy makers, the buildings sector, industry, SMEs and energy efficiency market participants.

European Commission Vice President, Maroš Šefčovič welcomed the launch of the report with the following words: "Investing into energy efficiency measures in buildings, industry and in SMEs is fundamentally important for Europe. I will strive to ensure that energy efficiency investment financing is looked at in our forthcoming policies and that this Report will be used as inspiration for our further work."

Under Secretary-General of the United Nations and Executive Director of UNEP, Achim Steiner underlines that: "Scaling up energy efficiency investment has become an economic imperative with a strong social, environmental and competitive rationale. And while European industry remains a global leader in energy efficiency, investment flows in the sector remain sub-optimal. Only half of the estimated 60 -100 billion Euros annual investment required to achieve Europe's 2020 energy efficiency targets in buildings is being met. The joint efforts by the EU and UNEP’s FI to build a healthy dialogue among stakeholders and disseminate know-how have the potential to unleash private investment to the scale required to meet future ambitions and obligations."

EEFIG Underscores the Strategic Relevance of Energy Efficiency for Europe

EEFIG’s report states that energy efficiency investment is the most cost effective manner to reduce the EU’s reliance, and expenditure, on energy imports costing over €400 billion a year. Today, this makes energy efficiency investments strategically important due to high levels of energy imports, energy price instability and the need for Europe to transition to a competitive low carbon and resilient economy. EEFIG’s members see energy efficiency investing as having a fundamental and beneficial role to play in the transition towards a more competitive, secure and sustainable energy system with an internal energy market at its core.

EEFIG Sees Priority Role for Energy Efficiency Investments in EFSI as a Pillar of Energy Union

EEFIG participants believe that the European Fund for Strategic Investments (EFSI) should put energy efficiency first and that it is essential in the context of the Energy Union to reframe the role that energy efficiency plays in how Europe plans for, finances, and constructs its energy system.

Member States have a clear role to play in pursuing the necessary structural reforms, exercise fiscal responsibility, provide regulatory certainty and boost investment in support of jobs and growth. In this context, energy efficiency is the first fuel because it is competitive, cost effective to produce; it is widely available and delivers multiple benefits to project hosts and national economies. For these reasons, EEFIG considers that the Investment Plan should include a clear focus on improving the energy productivity of Europe as a key driver of growth. In doing this, Europe can unlock the multiple benefits of energy efficiency investments including energy security, competitiveness, social and territorial cohesion, job creation, well-being and greenhouse gas emissions reductions.

A Historic level of Public-private Collaboration is Required

EEFIG Rapporteur Peter Sweatman underlined that a historic level of public-private collaboration is required to deliver multiples of existing energy efficiency investment flows by 2030: “The EEFIG report identifies various financial instruments that need to be scaled up, and makes a strong case for using public funds to blend with private sector investment to address the risks and achieve the scale of financing needed”; he added “Our report connects the right financial instruments with enabling policies in specific sub-sectors for EU buildings, industry and for SMEs.”

Presently, there are insufficient public and private investments in energy efficiency in buildings, industry and in SMEs. If this trend continues then EU Member States are at risk of missing their 2020, and longer-term, energy efficiency targets and their economies will be deprived from the boost energy efficiency investment can provide. EEFIG estimates that a five-fold increase in private energy efficiency investments in European buildings is required by 2030. The scale-up of smart financial instruments is required and that they must be tailored, by sub-sector, to encourage a long-term and cost effective reduction of energy use in Europe’s buildings, industry and SMEs.

EEFIG’s Report Presents 19 Recommended Market and Policy Actions in Four Strategic Areas

In its report EEFIG identifies the need to engage multiple stakeholder groups, scale-up the use of several financial instruments within a clear and enforced “carrot and stick” legislative framework and identifies 19 recommended market and policy actions in four strategic areas:

  • Market
  • Economic
  • Financial
  • Institutional

Many specific approaches and instruments that have proven to encourage investments and overcome market barriers are identified and developed within the chapters of the EEFIG report both for buildings and industry which directly address the concerns of financial institutions and markets participants and also focus on the needs of SMEs. The scaling up of these successful approaches and removal of these barriers will require an active structural reform agenda, as well as parallel market participant engagement, that can deliver economies of scale to drive down costs and improve supply capacity and ensure new opportunities for business and investment growth across all Member States.

Furthermore, the EEFIG report identifies 15 financial instruments for energy efficiency investing and assesses their use and potential in the various buildings and industry sub-sectors together with relevant case studies that illustrate best practice applications of each instrument within EU Member States as well as highlighting certain key benefits and challenges which each of the instruments face.

The EiiF is member of the Energy Efficiency Financial Institution Group and it was amongst the different stakeholders and organizations who participated in the report. 
  • Download a copy of the report by clicking here.

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