1European Investment Bank / ELENA Facility
ELENA: A PROJECT PREPARATION SCHEME
Juan Alario, Associate Director
European Investment Bank (EIB)
Regions for Economic Change
Brussels, DG REGIO 21 May 2010
2European Investment Bank / ELENA Facility
Summary
1. Why ELENA?
2. Issues to prepare a city energy programme
3. What is ELENA?
4. Conclusions
3European Investment Bank / ELENA Facility
4European Investment Bank / ELENA Facility
1. Why ELENA?
Urban areas account for about 70% of the EU energy consumption and GHG emissions
Substantial investments required to reduce GHG emissions, notably in EE/RE in buildings and sustainable
urban transport. However, limited action at this stage.
ELENA aims at accelerating development of this investment potential
ELENA aims at developing more efficient ways to develop the potential, that can be replicated
5European Investment Bank / ELENA Facility
2.1 Conditions for launching a city energy programme
1. Willingness to embark on a challenging new task?
2. Prepare a plan: go for a large programme to reduce transaction costs and attract investors’ interest
3. Think how to make projects bankable right from the beginning
4. Dialogue with potential investors and financers from the beginning
6European Investment Bank / ELENA Facility
2.2 Sectoral focus of the city plan
Buildings:
Some RE can be developed in cities using existing support mechanisms to RE, such as PV
Part of the EE potential can be developed without grants (around 20% EE gains), but for the rest (building envelope) grants are needed.
Sustainable transport:
Generally, substantial grants are needed, e.g. for high efficient buses or electric cars
7European Investment Bank / ELENA Facility
2.3 The approach
Creation of a Project Implementation Unit, focusing on investment implementation
The most promising approach seems to be using ESCOs
Ensure access to financing: the availability of grants influences project scope
8European Investment Bank / ELENA Facility
2.4 Needs of technical assistance
Additional staff for the Project Implementation Unit
Technical studies: feasibility studies, energy audits,…
ESCO approach and contractual aspects
Preparation of tender specifications and tender negotiations
9European Investment Bank / ELENA Facility
3.1 ELENA: Eligible entities
Beneficiaries: local and regional entities, or other public entities or regroupings thereof, including signatories of the Covenant of Mayors.
Eligible countries: EU, Norway, Iceland, Liechtenstein and Croatia
Part or all of the programme can be implemented by other entities than the above-mentioned, including private companies.
10European Investment Bank / ELENA Facility
3.2 ELENA: Eligible investments in buildings
Public and private buildings, including social housing,
Street and traffic lighting,
RE in buildings,
Heat and cooling networks based on CHP or RE
Small CHP for buildings
11European Investment Bank / ELENA Facility
3.3 ELENA: Eligible investments in transport
Increase EE or integration of RE in urban transport:
High EE buses, including hybrids,
Electric cars,
Investments to facilitate new, more energy efficient solutions to improve freight logistics;
12European Investment Bank / ELENA Facility
3.4. ELENA: Eligible investments in local infrastructures to improve EE or use RE
Smart electricity grids
ICT
EE urban equipment
Inter-modal transport facilities
Refueling infrastructure for alternative fuel vehicles, including charging infrastructure for electric cars
13European Investment Bank / ELENA Facility
3.5 Investments not eligible for ELENA
Investments related to industry; reductions of GHG emissions related to industrial relocalisations
14European Investment Bank / ELENA Facility
3.6 Minimum conditions to apply for ELENA
Need first to have identified an investment programme in the eligible areas
Bankability of the potential investment programme
The ratio between investment and ELENA assistance has to be minimum 25
15European Investment Bank / ELENA Facility
3.7 Costs eligible for ELENA
Additional staff hired by the beneficiary
Feasibility studies
Energy audits
Tender and contract preparation
Other TA needed to implement the programme, excluding hardware costs.
ELENA funding can cover maximum 90% of TA costs
16European Investment Bank / ELENA Facility
4.1 Conclusions (1)
Need to explain how ELENA works as it is innovative
ELENA has raised substantial interest
At present most of the ELENA pipeline is in public buildings and using ESCOs
Complementing ELENA with financing instruments to enlarge ELENA scope to other sectors:
Transport projects
Social and private buildings
ELENA projects have substantial opportunities to be replicated and to help spread good practices
17European Investment Bank / ELENA Facility
4.2 Conclusions (2)
Few public entities have the willingness and capacity to implement large EE/RE city/regional programmes: need to exchange experiences
To be effective TA has to be linked to implementation (investments)
Project preparation support (botton-up) is a necessary complement to legislative and financing support (top-down)
18European Investment Bank / ELENA Facility
To get more information…
http://www.eib.org/elena
Thank you for your attention