Isra-Mart srl: EU targets public sector with €265m energy efficiency fund

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Isra-Mart news:

A €265m market-based fund to finance European energy efficiency projects could rise to as much as €800m if the EU can attract further investors.

Unveiled late last week by the European Commission, the European Investment Bank (EIB), state-backed Italian bank Cassa Depositi e Prestiti (CDP) and Deutsche Bank, the European Energy Efficiency Fund (EEEF) will be primarily financed using unspent EU funds.

The bloc has a target of reducing member states' energy consumption by improving energy efficiency 20 per cent by 2020, but it was recently forced to unveil new measures, including an expanded programme of refurbishment for public buildings, when it became clear that current policies were not going to meet the target.

The commission said the EEEF will target the "substantial potential" for energy efficiency in the European public sector, leveraging funds for projects that might have otherwise struggled for investment. Investments will be made either directly in projects or through financial institutions.

"We expect the fund to focus on smaller scale investments by local authorities or energy service companies (ESCOs), thereby complementing the larger scale finance that the EIB already offers for energy efficiency investments throughout the European Union," said Philippe Maystadt, EIB president.

Monies are primarily coming from the European Commission, which is investing €125m and partly assuming the economic risks associated with the investment projects.

However, the EIB is committing €75m, CDP €60m and Deutsche Bank, which will also act as the fund's investment manager, €5m.