Financing Mechanisms for Europe’s Buildings Renovation.
Assessment and Structuring Recommendations for Funding European 2020 Retrofit Targets

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By Peter Sweatman

For countries to deliver activity levels of energy efficiency refurbishment in existing buildings consistent with Europe’s strategic, economic and environmental goals for 2020, the amounts of investment flows required are in the order of 0.5-0.8% of GDP, some Euro100 billion in aggregate across Europe and more than double today’s investment rates.

This significant financing gap can only be filled with adequate and coordinated policy frameworks with subsidy programs designed to align stakeholder interests, facilitate execution and, most importantly, engage key private sector actors in the wide scale funding, distribution and sale of energy efficiency retrofit solutions to their customers.

We identify four keys to the greater involvement of private sector actors and additional private sector co-financing:

  • Improved Financing and Simplified Procedures for the Buildings Occupant
  • Explicit Valuation of the GHG Emissions Reductions resulting from Retrofits
  • Driving the Engagement of Private Sector Distribution Channels (Banks, Energy Suppliers and ESCOs)
  • Increased Focus on the value of the Other Material Co-Benefits to Refurbishment

Within each of these four areas we highlight selected policies which can complement new public funding programmes, modelled upon today’s “best in class”, and create a “waterfall effect” to unlock private financing sources and deliver the economic, employment, environmental and strategic benefits of this Euro 100 billion European marketplace.

The report was launched during the workshop: “Money Matters – How to Mobilise Private Finance for Energy Efficiency” at the Résidence Palace (Brussels) on February 2012, and can be downloaded with supporting materials through the following links:

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