EEFIG Underwriting Toolkit

Leading financial institutions are increasingly active in energy efficiency: There are four main reasons for this:

  • it represents a significant new business opportunity.
  • it can reduce client risk through improving cash flow and reducing the risk of stranded assets through tightening energy efficiency regulations.
  • it delivers environmental objectives which are a key component of Corporate Social Responsibility programmes.
  • banking regulators are increasingly looking at climate risks and energy efficiency is a major factor in mitigating those risks.

These four reasons should encourage other financial institutions to enter the market.

The EEFIG Underwriting Toolkit is designed to assist financial institutions to scale up their deployment of capital into energy efficiency. It was compiled with several objectives in mind:

  • to help originators, analysts and risk departments within financial institutions better understand the nature of energy efficiency investments and therefore better evaluate both their value and the risks.
  • to provide a common framework for evaluating energy efficiency investments and analysing the risks that will allow training and capacity building around standardised processes and understanding.
  • to help developers and owners seeking to attract external capital to energy efficiency projects to develop projects in a way that better addresses the needs of financial institutions.
  • to foster a common language between project developers, project owners and financial institutions.

Although the focus is on value and risk appraisal, additional material on the size of the potential market, methods of financing and the project life cycle have been included to give a fuller picture and help build capacity within financial institutions.

The authors would like to acknowledge all members of EEFIG for their input and specifically the following organisations which have made direct contributions to the writing of this Toolkit: ABN Amro, Adelphi, Amber Infrastructure, Ameresco, Aon, Aurubis, Barclays, BASE, Belifus, Berlin Hyp, Better Building Partnership, BMGI-Consulting, BPCE, Bulgarian Energy Efficiency and Renewable Sources Fund, Caisse des Depots et Consignations, Carbon & Energy Fund, CEN/CENEC, Cycle 7, Danfoss, DENEFF, Deutsche Bank, DG Energy, EFIEES, EEIP, EEP University of Stuttgart, EEVS, Eiffel Fund, EESL, EuroACE, European Energy Efficiency Fund, Eurima, European Investment Bank, Finerpol EPC, Green Investment Bank, Hermes, IFFR, Investor Confidence Project, ING, Italcogen, KEA Baden-Wurtenberg, Komercni banka, LABEEF, Lux Nova Partners, M√ľnchener Hypothekenbank, PACENow, PIB Insurance, PostBank, OpenExp, RdA Climate Solutions, Romanian Green Building Council, Saint-Gobain, Santander Group, Serimus, SUSI, Tera srl, The Carbon Trust, The CO Firm, The Curve, Triodos, Turboden, UK Department for Business, Energy & Industrial Strategy, UNEP FI, University of Geneva, University of Stuttgart, Verco Advisory Services, Vesta Conseil & Finance, VIPA.