VIPA has developed several financial instruments (financing schemes) in energy efficiency financing sector:securitization model; established investment platform
The Energy Efficiency Directive is the main policy instrument at the EU level to reach the 20 % energy saving goal in 2020. Problem faced in Lithuania was that usual financing sources like commercial banks, are risk averse and conservative, especially when it comes to energy efficiency projects. Financing period, interest rated and collateral requirements introduced by banks are too short for the investments for energy efficiency projects. VIPA has developed several financial instruments in energy efficiency financing sector:
- securitization model to attract financing to apartment building modernization program from international capital market;
- proposing asymmetric sharing solutions/ schemes for capital market players;
- established investment platform (in the form of private equity fund) which main target is to achieve energy savings while financing different energy efficiency measures.
253 million EUR (from multi-apartment building modernization investments,from green bonds issue in multi-apartment building modernization investments, from additional investments attracted to multi-apartment building modernization investments)
Evidence of success
2 innovative financial instruments were developed.
1 innovative public funds leveraging technique is under development.
Development of new innovative Financial instrument resulted in high interest among all stakeholders, which envisaged to develop in new project pipeline.
Market players are not familiar with new FI features (challenging promotion). The need of highly qualified employees to develop innovative instruments. Some innovations generate high initial costs, (although relatively low compared to the attracted amounts).
Potential for learning or transfer
Developing new financial instruments (financing schemes) in energy efficiency financing sector might help to achieve energy efficiency obligations from The Energy Efficiency Directive and to save energy for all the EU member states.
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