1

Rahul Pratap Singh

Investment Manager of the European Energy Efficiency Fund

rahul.pratap-singh@dws.com

SUSTAINABLE COMMUNITY INVESTMENT

19-20 February 2019Brussels, Belgium

Agenda

2

The European Energy Efficiency Fund1

2 Cardenden – Heat and Power Project

3 What eeef offers ?

4 Advantages of eeef solution

Massive potential for EE, small

scale RE and Clean Urban

Transport in the European

public sector

EU-wide targets: cut greenhouse gas emissions by

40%, increase use of renewable energy by at least 27% and

improvement of energy efficiency by at least 27%

EU 2030 Framework for

climate and energy

Objectives and sponsors of the eeef

3

ESPT

FR

DE

IT

IE

GB

FI

SE

PL

AT

CZ

RO

BG

HU

LT

LV

EE

DK

NL

BE

LU

GR

CY

SK

SI HR

Background

European

Commission

(Initiator)

European

Investment Bank

(Founding investor)

Cassa Depositi e

Prestiti

(Founding investor)

Deutsche Bank

(Investor)

Sponsors

MT

eeef target

Geographical scope of the eeef

4

GERMANY

€0.9m forfaiting loan to Jewish

Museum Berlin via Johnson

Controls‘ ESCO (EE: building

retrofit)

€0.6m forfaiting loan to

University of Applied Sciences

Munich via Johnson Controls‘

ECSO (EE: building retrofit + CHP)

ITALY

€32m project and VAT bond

facility to project entity upgrading

University Hospital S.Orsola

Malpighi in Bologna (EE:

reduction of energy consumption in

the entire fluid production and

distribution systems)

€16m equity investment in the JV

“Illuminated Citites” with Siram

by Veolia for a portfolio of

investments (EE: smart public

lighting)

€7m equity investment in the JV

“Smart Hospitals &

Universities” with Sinloc for a

portfolio of investments (EE:

building retrofit)

FRANCE

€5.1m junior funds to project

vehicle to supply heat to City of

Orléans (EE: CHP/biomass)

€7.3m junior funds to project

vehicle to supply heat to City of

Rennes (EE: CHP/biomass)

€30m senior funds to Bolloré(Clean Urban Transport: electric

cars) – investment matured

€5m senior construction facility

to project vehicle of Région

Rhône-Alpes (EE: schools retrofit)

– investment matured

SPAIN

€2.5m forfaiting loan to

Universidad Politécnica de

Madrid via Enertika (EE: building

retrofit)

€9.2m forfaiting loan to City of

Santander via Elecnor SA (EE:

smart public lighting)

UK

€4.2m senior debt to project

entitiy Cardenden Heat and

Power (EE: boiler replacement and

RE: onshore wind)

NETHERLANDS

€8.5m senior debt to City of

Venlo (EE: smart public lighting)

PORTUGAL

€5.1m junior funds to PV

portfolio to be developed by

Wattosun (RE: rooftop PV)

€12.1m forfaiting facility to 14

municipalities in Alentejo region

via CIMAC (EE: smart public

lighting)

eeef investments by country with

project details

ROMANIA

€25m subdebt to Banca

Transilvania (Financial

Intermediary investment: EE, RE,

Clean Urban Transport)

Agenda

5

The European Energy Efficiency Fund1

2 Cardenden – Heat and Power Project

3 What eeef offers ?

4 Advantages of eeef solution

6

Energy efficiency upgrade of social housing homes

& new small-size wind plant – Cardenden, the UK

Project structure

− Cardenden Heat & Power Ltd

− Renewable Energy Infrastructure Fund

(REIF)

Key data:

Total project volume: €5.5m (wind component installed €2.1 m)

eeef funded volume: €4.3m via a senior loan (wind component

€1.4 m)

Duration of financing: 15 years

Highlights:

First small scale wind power project development financed by the

eeef

eeef collaborated with the Scottish community to address the

technical and financial aspects to plan and implement climate

change related project

Partners:

Measures:

Energy

efficiency /

Renewable

Energy

Wind

Results:

Gas boiler upgrade of more than 170 homes

owned by the local housing association

Construction of small size onshore wind-farms

(each 0.5MWe) in the Fife Region

Reduction of CO2e emissions of 758 t/yr, 96%

compared to baseline

Project Description

Cardenden, the UK

Cardenden

Heat &

Power

Senior loan

Equity funding

REIF

Subordinated

loan

EPC and

O&M

partners

EPC and

O&M

Ore Valley Housing Association

Location

Investment characteristics

Agenda

7

The European Energy Efficiency Fund1

2 Cardenden – Heat and Power Project

3 What eeef offers ?

4 Advantages of eeef solution

eeef investments’ scope of work

8

Public entity

ESCO, utility, facility

management company,

social housing

association etc.

Individual Project

Portfolio of projects

Public link

Primary Energy Savings or

CO2e savings ≥ 20%

eeef

Individual Project

Portfolio of projects

Debt / equity* (/guarantees )

around €5m - €25m

Financial

Intermediary

Public entities, ESCOs,

utilities, facility mgm

comp., social housing ass.

…

*eeef doesn’t invest equity into financial intermediaries

Beneficiary Project feat.Financial

instrument

„direct“

financing

„indirect“

financing

(PPP**)

„indirect“

financing

**Generally speaking

Indirect Financing entails

a Public Private

Partnership

Project financing: i) a political decision, ii) a

question of the financial capacity

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Existing in-house capabilities to manage renovation works and O&M to assume the technical risk of installations and related energy savings realisation/ or O&M service is already run by the private company

Capacity to increase indebtedness

Existing facilities with the banks in placePotential

options

Indirect

financing

Direct

financing

Key decision factors

No internal capacities to manage renovation works /O&M

Limited or no capacities to increase levels of debts

Political will to transfer the responsibility for realisation of energy savings to the private party

Internal capacities to manage tender and selection process

New Technical Assistance facility for a higher

success rate of projects

How TA works

I. eeef selected consultants

II. eeef to match consultant with

municipality

III. Joint definition of project scope

IV. Progresses monthly

monitored by eeef

V. Bankability built all along the

development process. eeef

participating to project funding

otherwise reimbursement of

costs

Current status: selected public

authorities are Gijón (Spain),

Ferrara (Italy), the Italian

Ministry of Defence, and

Kaunas (Lithuania)

Further funding available

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COM TA: 16 TA projects in 8

countries, a total project volume

of €195m facilitated

All activities necessary to

prepare investments -

feasibility studies, energy

audits, assessment of economic

viability of investments, legal

support etc.

TA boundaries

No reimbursement required if

the agreed conditions are met

e.g. timeframe, leverage factor,

eeef (co-)funding

eeef coordination & monitoring activities and bankability-oriented TA enhance the

implementation rate of projects

How to apply as beneficiary

Background

experience

eeefTA

TA beneficiary

(public entity)

eeefeeef

consultantConsultancy Agreement

Remaining funding available on a first-come-first-serve basis

Application to submit to technical_assistance@eeef.eu

All info at http://www.eeef.eu/eeef-ta-facility.html

What is eeef looking into?

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Country Sector Technology Short Description

UK Renewable

Energy

Waste to energy The project will process an output generated from the organic fraction of

municipal waste to produce heat to supply the Council via its own district heating

network (DHN) and electricity will be sold to the grid..

Belgium Energy

Efficiency

Waste to Energy,

Biomass and District

Heating Network

The project will realize a district heating network (DHN) to connect the medium

sized city to an existing intercommunity public facility, which incinerates the

residual fraction of waste post-recycling and produces heat as a by-product.

Such a by-product is currently unused and thus goes lost. Additionally, the

project aims to realize a complementary biomass plant which will serve further

the heating needs of the area and input the DHN.

Italy Energy

Efficiency

Buildings Efficiency, PV

Solar and District

Heating Network

The project envisages renovation of public buildings, rooftop PV for self-

consumption of public and private users and district heating network within a

portfolio transaction.

Lithuania Clean

Transportati

on

Electric Vehicles The project targets to build a JV which intends to own electric buses and lease

these on the basis of long term concession agreements to public entities at costs

lower than the current costs to maintain and operate diesel buses.

Spain Energy

Efficiency

LED street lights The project targets to upgrade the street lighting infrastructure in the medium

sized city to LED and install PV ion the public buildings.

Agenda

12

The European Energy Efficiency Fund1

2 Cardenden – Heat and Power Project

3 What eeef offers ?

4 Advantages of eeef solution

If you are a

Public Entity

…similar to City ofVenlo (NL), CHAP Social HousingAssociation (UK)…

Private companyliasing with a publicentity

…similar toManutencoop (IT), Enertika (ES), Bolloré(FR), EDF Group (FR), Johnson Controls (DE)…

Financial Institution financing the above

…similar to BancaTransilvania (RO)…

Developing a project in

Renewable Energy

As we have done with: City of Orléans / Rennes (FR), CHAP SocialHousing Ass. (UK)

Energy Efficiency

As we have done with: City of Venlo (NL), Region Rhône Alpes(FR), Sant‘OrsolaHospital (IT), Universidad Politecnicade Madrid (ES), BancaTransilvania (RO), Jewish Museum of Berlin (DE), Munich University (DE), CHAP SocialHousing Ass. (UK)

Clean Urban Transport

As we have done with: Bolloré – Paris, Lyon, Bordeaux (FR)

With thesefeatures

Avoiding CO2e emissions at

least for 20% ofthe baseline

Looking for funding in a

(flexible) range between 5 and

25 €m

In one of the EU Member States

eeef can supportyour project providing

Tailor made funding

Debt e.g. City of Venlo (NL),

Bolloré (FR), Region Rhône-Alpes (FR), CHAP Social Housing Ass. (UK), Sant‘Orsola Hospital (IT)

Equity e.g. City of Rennes (FR),

City of Orléans (FR)

Mezzanine e.g. Banca Transilvania

(RO)

Forfaiting structures e.g. Universidad Politecnica

(ES), City of Santander (ES)

Technical Assistance

Added value of the eeef

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Advantages of the eeef

Know how pooled at the European level with a lean decision process

The Fund is acting as center of competence for financing of EE and RE projects with a public

link across jurisdictions –currently working with nearly

30 cities and regional authorities in Europe

Experienced professionals along the investment decision process, taking no longer than 6 weeks to reach investment

commitment

Broad spectrum of financing instruments with long maturities

Corporate and/or project finance through senior debt,

mezzanine, equity, leasing and forfaiting facilities.

Maturities up to 15 years

Fund can operate either as the sole investor to simplify

implementation and get lower execution costs or co-invest.

Equity or mezzanine capital can be provided to act as co-

sponsor

Pan-European investment approach

Risk diversification of portfolioacross EU28 Member States

All agreements for investments taking into consideration local

requirements of each European location

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Contacts

European Energy Efficiency Fund (eeef)

Lada Strelnikova

+49 (69) 910 46444

lada.strelnikova@dws.com

Rahul Pratap Singh

+49 (69) 910 42612

rahul.pratap-singh@dws.com

Paola Rusconi

+39 02 4024 6513

paola.rusconi@dws.com

www.eeef.eu

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