How do you finance energy efficiency renovations in buildings? CITYnvest provides the answer

We want to tell you the story of CITYnvest and how we are making a change in thinking about financing buildings renovations. We all know the stats; buildings are responsible for 40% of European primary energy consumption and 36% of CO2 emissions. What’s more, European climate and energy targets for 2050 require energy savings of up to 80% in the building sector. But let’s be frank, often municipalities believe that they don’t have enough money to work on energy efficiency renovations. The truth is that the money is there, but every day it is being wasted on energy costs.

We can clearly see at  local level,  municipalities and regions lack the real expertise to deeply renovate buildings in their local area. Not only the technical expertise but also the competence on how to find the right institution to advance the money to make the necessary energy efficiency investment. Filling this gap in knowledge and capacities of local authorities lies at the heart of this project.  Thanks to CITYnvest, local governments finally have access to know-how on financial resources to retrofit buildings and organising renovation processes in the most efficient way.

In practical terms, it all started when the Climate Alliance’s expert group on local finances and GRE-Liège came together. The expert group came with the knowledge of many good, but isolated examples of municipalities and regions, which implemented retrofits thanks to innovative financing. On the other hand, GRE-Liège had already started with the process of convincing municipalities that investing in energy efficiency pays off for the local economy. The Belgian regional development agency also learned that it takes a lot of time and effort to persuade local politicians to take an innovative approach to energy efficiency investments. The conclusion was simple: politicians need proof that innovative models work. And CITYnvest aims to provide evidence to convince even the most sceptical.

This is why in our consortium we gathered experts from different fields. We got on board experts in Energy Performance Contracting (Energinvest) and in cooperative models (REScoop), and regional partners (SEC, InfoMurcia, GRE-Liège) to test the innovative models on the ground, as well as an association of local and regional authorities (CEMR), who were able to reach out with CITYnvest expertise to over 130 000 local governments. We also took on a multi-level approach. First, we researched, analysed and compared existing best practices in innovative financing for energy retrofits. Then, we started testing selected solutions in three pilot regions in Bulgaria, Belgium and Spain. Finally, we started spreading the knowledge garnered by the project to enable the training of local and regional governments in 10 European countries. 

Sounds complex? Recently we came up with a short video explaining how we work. You can watch it below:

Now it’s time to get to the technical details and explain what we mean by innovative financing and operational models. These are mechanisms and instruments, which can provide adequate and sustainable financing solutions to make large scale and deep energy efficiency renovations in buildings happen. We could list schemes here such as Energy Performance Contracting, including third party financing, revolving funds, cooperative models, green bonds etc. The innovative models can make use of one financing scheme or a combination of different ones, according to what best fits the context. However, the most innovative aspect of those models lies in the catalyst role of local and regional authorities. Municipalities and regions are the ones defining the broader vision and policy goals, leading the renovations process itself and mobilizing all partners and collaborators.  

And finally, a couple of words on what is going on at CITYnvest right now. So far, we have developed three tools to assist local governments in financing renovations of buildings in a way that best suits their own needs:

1. “Increasing capacities in cities for innovating financing in energy efficiency” reviews innovative financing and operational models for large-scale retrofits and explains instruments that could be used by municipalities to carry out renovations of their building stocks.
2. Recommendations Decision Matrix contains a set of questions, which help to choose the most suitable financing and operational energy retrofits model.
3. “A guide for the launch of a One Stop Shop on energy retrofitting” clearly explains how to start a project and identifies main challenges and success factors. This toolkit addresses practical issues and offers step-by-step guidance for private and public actors.

Since the beginning of 2016, we have been organizing capacity-building workshops in our Focus countries. Workshops in Latvia, Lithuania, Hungary and Italy have already taken place. France, Romania, Austria, Belgium, Spain and Bulgaria are coming soon.

We are running and constantly updating www.citynvest.eu. There you will find information on CITYnvest and external events on financing for energy retrofits, all toolkits, good practices, guidelines and glossaries produced by the project and materials from the capacity building workshops.

What else is coming in the future? Well, more tailored guidance materials are on their way. Besides, in the end of 2017 you can expect the final conference of the project. The event will give an opportunity to summarize our experience and share our recommendations with policy makers at the European level. If you wish to stay informed about our developments and new materials and events developed by CITYnvest, sign up to our newsletter and we will keep you posted!