CROENERGY.EU
About this good practice
The primary objective of the platform is to promote and maximize the use of this innovative financing mechanism in Croatia through mutual cooperation and dialogue with key market stakeholders (ministries, development agencies, NGOs, energy cooperatives). Currently, the platform provides donation and reward based funding models while crowd lending and crowd investing models would be added gradually, as the market becomes more mature and ready. The platform acts as a match-maker for raising funds to avoid potential financial risks and is open to public sector fundraisers due to legal issues with involvement of private companies and physical persons. Campaigns are pre-selected as fundraisers’ background is checked, including feasibility of the investment.
Development of the platform required significant investment costs, considering there were no “off the shelf” website solutions. A custom CMS web application was made with an online payment gateway. Not using the third party payment systems such as Paypal caused high financial transaction costs for platform managers but provided a much simpler interface for project backers.
Croenergy platform has had success with development and funding several pilot projects. Success can mostly be attributed to a very solid marketing strategy, constant presence in the media and local community that recognized the project and was willing to back it up.
Expert opinion
Significant financial resources need to be mobilised if we are to meet our energy targets, and regions must explore innovative funding mechanisms to encourage private investments. Crowd funding is an increasingly popular method of raising funds, though mostly related to start-up capital for businesses. This practice is an interesting approach that allows public sector organisations to raise funds for energy interventions. Campaigners are pre-selected by the organisation, to ensure that the projects are legitimate, and the platform has successfully funded pilot projects that are beneficial for local communities, mostly related to improving energy performance in local schools. It is a practice that can be taken as an inspiration for many other regions.
Resources needed
5.000,00€
2 experts (financial, communication)
Evidence of success
In total 10 crowdfunding campaigns have been launched using the croenergy.eu platform, with the goal to collect in total
1.795.000,00 HRK (243.874,29€) for the 10 different projects . Those are small projects mostly related to kindergartens and schools (energy renovation, equipping the cabinets, sports ground renovation, etc.)
- 6 of them are successfully finalized (funds are collected), In total: 453.516,00 HRK (61.616,10€).
- 4 of them (182.258,19 €) are still ongoing.
Potential for learning or transfer
Entrepreneurs, and especially start-ups have an opportunity to test their ideas before investing significant financial resources. Key advantages of crowdfunding campaigns lie in the small size of its donations and dispersion of potential risks for their backers.
- Crowdfunding also promotes the use of modern technology, social media and online payment options which helps with overall digitalization levels of the community.
- Crowdfunding is available and interesting model for financing sustainable energy projects since it enables citizens to become investors or contributors to its own community infrastructure or innovative projects.
- Crowdfunding campaigns also provide an opportunity for cities and municipalities to closely work with citizens and involve them in the planning phase of projects that have an added social dimension.