NAMA Facility Financing for Energy

Efficiency

What are NAMAs?

What is the NAMA Facility and what does it do?

South Africa’s NAMA Facility application to support Energy

Efficiency in Public Buildings & Infrastructure (EEPBIP)

Overview

any action that reduces emissions in developing

countries and prepared under the umbrella of a national

governmental initiative

• policies directed at transformational change within

an economic sector, or

• actions across sectors for a broader national focus

supported and enabled by technology, financing, and

capacity-building

aimed at achieving a reduction in emissions relative to

'business as usual' emissions in 2020

Nationally Appropriate Mitigation Actions

(NAMAs)

Aim

Support developing countries and emerging economies in implementing

ambitious actions to mitigate greenhouse gas emissions (Nationally

Appropriate Mitigation Actions, NAMAs). NAMAs can function as an

important vehicle to implement nationally determined contributions (NDCs)

under the Paris Agreement.

Facts about the NAMA Facility

• Multi-donor funds established by Germany (BMUB) and UK (BEIS) in

2013

• Denmark (EFKM, MFA) and the European Commission joined in 2015 as

additional donors

• Total funding made available through the NAMA Facility since its

inception: ~ EUR 262 m.

• In 4 Calls, 21 projects have been selected so far for funding

NAMA Facility

Location of NAMA Support Project (NSP)

within broader NAMA

Energy Efficiency and Demand Side

Management Flagship

Public Sector Energy

Efficiency NAMA

1. NAMAs

Implement NAMA Support Projects (NSP) as the most

ambitious part of the NAMA

Provide funding for a combination of financial and technical

measures

selects NSPs in annual bidding rounds

Key requirements for project selection

• Implementation readiness

• Mitigation potential

• Transformational change

What the NAMA Facility does

Transformational Change

• shift a sector in a country toward a sustainable

irreversible low-carbon pathway

• re-orientation of national policies towards low-carbon

path

Financial Instruments and Sustainability

NAMA Facility Portfolio (March 2017)

South Africa: Barriers to public-sector EE

implementation

Limited data on quantification of savings potential

Capacity & resource constraints within many public sector entities

Lack of access to affordable finance

Perceived payment risk with public entities for ESCOs & lenders

2. Background

Energy Efficiency in Public Buildings and

Infrastructure Programme (EEPBIP) - NSP

• Aims at unlocking vast energy efficiency potential with public sector buildings and infrastructure• Municipal

• Provincial

• National

• Building on existing national programmes (e.g. EEDSM, DPW shared savings)

• EUR 20 million funding application to the NAMA Facility

• Transforming the way public-sector energy efficiency projects are identified, developed and financed

Programme partners

3. EEPBIP

Municipalities

Provinces

• identify potential energy

efficiency projects

• procure & contract

ESCOs

• tender for projects

• secure finance

• implement, maintain &

monitor

EEPBIP Structure

(Hosted by DOE) (Hosted by IDC)

3. EEPBIP

Performance based service agreement between

ESCO & public entity:

implementation of EE interventions,

payment by public entity to ESCO over a

specified period of time

maintenance requirements

a guarantee on energy savings

Energy Efficiency Project

Support Office (EEPSO)Partial Credit Guarantee

Energy Efficiency Project Support Office

(EEPSO)

Partial Credit Guarantee“Assist in alleviating funding constraints faced by small and medium-scale enterprises (SMEs) specifically in industries or environments where short to medium-term liquidity risk is deemed to be significant”

EEPBIP PCG

• loans from IDC to ESCOs, partially backed by a guarantee

• mitigate risk of payment default by the public entity to the ESCO• Liquidity risk

• Default

• Credit risk of ESCO

• Lenders look through the ESCO to the municipality/ province/ national department to assess the risk of repayment

5. EEPBIP Financial component

Impacts• Significant reductions in energy, emissions and costs for public entities

• Supports implementation of South Africa’s Nationally Determined

Contribution (NDC)

• Performance of existing Energy Efficiency Demand Side Management

(EEDSM) Programme improved

• Significant multiplier on existing CAPEX subsidy - public and private

finance leveraged

• Increased energy management capacity within Government

institutions – reducing risks and delays on procurement and contracting

• Government leading by example on energy efficiency

• ESCO market growth and increasing competitiveness

• Framework for leveraging additional climate finance for EE (e.g. GCF)

6. Impacts

Stages of EEPBIP sustainability & growth

• Independent financing of projects

• Reduced requirement for grants and guarantee

Stage 3

• NSP ends

• EEPBIP continues as national programme

• Standardised procurement and contracting

• Risk levels reduce

• Recapitalisation of GF

• Coverage levels reduce

• Participation by commercial banks

Stage 2

• NAMA Support Project (NSP)

• Partial Credit Guarantee fund

• Extensive technical assistance

Stage 1

7. EEPBIP sustainability and growth

Thank you

Extra slides

Mexico Housing NAMA

• Improvement of capacities of federal, state and local authorities on

energy efficient and sustainable housing, as well as building codes

and the legislative framework conditions;

• Development of a local market for environmentally friendly

technologies;

• Improvement and application of existing Mexican promotion and

incentive instruments with more ambitious energy efficiency

standards at federal and state level;

• Fostering the application of more ambitious energy efficiency

standards through the provision of investment grants for incremental

costs as well as the inclusion of additional eco-technologies.

Thailand Refrigeration and Air

Conditioning NAMA (RAC NAMA)

• production and sale of green refrigeration and air

conditioning (GreenRAC) equipment;

• servicing and use;

• revisions to the policy and financial framework;

• raising awareness of benefits and the need for

behavioural change.