Green Buildings MDB Stories of Impact

Transcription

1 Green Buildings MDB Stories of Impact Green Buildings Day at Annual Meeting 16 October 2017, Washington DC Romano Pehar, Principal, Energy Efficiency & Climate Change

2 Introduction to EBRD Financing Instruments and Initiatives Case Studies

3 INTRODUCTION FINANCIAL INSTRUMENTS AND INITIATIVES CASE STUDIES 3

4 Introduction to EBRD Capital base of 30 billion 8.7 billion average annual business volume in the last three years Portfolio of 40 billion

5 EBRD s integrated programme TECHNICAL ASSISTANCE PROJECTS AND INVESTMENTS POLICY DIALOGUE Technical assistance (TA) instruments include: Energy audits Feasibility studies Trainings and capacity building Energy and sustainability certification Energy management system Support with developing sustainability focused corporate policies Support from in-house as well as procured experts Well-structured financing instrument Eligibility criteria Eligible clients Energy performance criteria Financing Directly to clients Through local financial institutions (PFIs) Through energy service companies (ESCOs) Through energy utilities Policy dialogue with national authorities business and professional associations e.g. Green Building Council Help prepare primary and/or secondary legislation, or help build relevant capacity, namely: Energy Performance in Buildings Directive (EPBD) National Calculation Methodology for energy consumption. 17 October,

6 CO 2 emissions / unit of GDP Carbon Intensity 3.0 EBRD CoOs EU-28 average USA

7 Sustainable Energy Initiative (SEI) The EBRD has been engaged in sustainable energy finance since its establishment in In 2006, the EBRD launched the SEI to address the twin challenges of energy efficiency and climate change. Strong partnerships with the major international initiatives for climate change (Global Environment Facility, the Climate Investment Fund and the Green Climate Fund Sustainable Energy Initiative (SEI) Sustainable Resources Initiative (SRI) Green Economy Transition (GET) Energy Efficiency banking team Energy efficiency Renewable energy Water efficiency Material efficiency Adaptation to climate change Environmental protection Technology transfer

8 EBRD Business model ENERGY EFFICIENCY (Sustainable Energy Initiative) BUSINESS AREA Corporate energy and resource efficiency Sustainable energy financing facilities Energy efficiency in the energy sector Municipal and infrastructure energy efficiency Renewable energy Climate change adaptation CROSS-SECTOR ACTIVITIES Policy dialogue Product development WATER EFFICIENCY (Sustainable Resource Initiative) Measuring, reporting and verification Carbon market development MATERIAL EFFICIENCY (Sustainable Resource Initiative) 8

9 Green economy transition in the EBRD context EBRD region environmental challenges: High carbon intensity due to heavy reliance on fossil fuels and high energy intensity due to wasteful practices, distorted energy pricing and absence of effective regulation and standards Markets failure to internalise the cost of environmental damage Reducing the energy and carbon intensity through energy efficiency and renewable energy deployment is in line with the national security and economic interest of the EBRD region Water efficiency is an important driver of business competitiveness, especially in Central Asia and the Southern and Eastern Mediterranean region 17/10/2017

10 Definition of green economy EBRD s definition A green economy is a market economy in which public and private investments are made with a specific concern to minimise the impact of economic activity on the environment; and where market failures are addressed through improved policy and legal frameworks aiming at accounting systematically for the inherent value of services provided by nature, at managing related risks and at catalysing innovation. 17 October,

11 Mainstreaming green financing: The EBRD business model Appraise resource efficiency investment plans Technical, financial and marketing teams to support banks in developing their green financing capacity climate vulnerability risk assessments transition gaps & market scoping Direct financing (debt, equity) Indirect financing via local FI Investment grant support Blended concessional finance Address sustainability & environmental market failures Strengthen the institutional & regulatory context 11

12 Areas of cooperation Policy development Assisting in development of policies/regulations affecting through initiatives and dialogues with the authorities and industry. Financial mechanism Financing facilities through local financial institutions in countries of operations to support energy efficiency. Banks are supported by SEFF teams to identify, assess and finance projects. Direct investment in projects Project finance and corporate finance Loan and equity finance Capacity building Assisting in training and knowledge sharing Sustainability Assisting in development of sustainability standards and energy/sutainability certifications FINTECC Identifying clients with potential to invest in higher resource efficiency technologies in early transition markets, and supporting this with investment grant resources to overcome risks and affordability barriers.

13 * million Technical Assistance & Capacity Building The E2C2 team facilitates access to specialised donor resources for: Targeted technical assistance to complement project scoping or implementation Concessional finance to blend with EBRD financing Grant incentives for borrowers to help overcome barriers such as affordability constraints, first-mover risks, behavioural and perceived risks, low technology penetration rates Via E2C2, the EBRD partners with major providers of multilateral concessional climate finance resources Grants Concessional co-finance TC Technical Cooperation 0

14 INTRODUCTION FINANCIAL INSTRUMENTS AND INITIATIVES CASE STUDIES

15 EBRD s investments in the building sector Context The EBRD s engagement in the context of its countries of operations: high share of heavy industry ageing infrastructure high energy intensity a lack of market-based pricing for energy Response: Green Economy Transition (GET) Initiative As part of GET, the EBRD invests heavily in: Climate Change Mitigation Climate Change Adaptation Resource Efficiency Environmental Improvements Innovation in green sectors Relevance of the building sector The Building sector is the largest energy consumer in the EBRD region (around 40% of the final energy consumption) The Building sector has been one of the key priority areas for EBRD s climate actions since 2012 Over EUR 2 billion resource efficiency and green building investments since 2008 in 200+ larger size transactions Including up-grade or green construction of over 62,000 building assets GBA of about 25.5 million m 2 of up-graded or green buildings 03 October

16 Dedicated green building financing products Specific financing products: 1. Larger scale PPP framework programs (greenfield and brownfield public buildings) 2. Sustainable property funds (commercial and private residential buildings) 3. Dedicated credit lines (Financing Facilities) through local financial intermediaries (any buildings) 4. Urban regeneration projects / Green City action Plans (public and residential buildings) 5. Sustainable retail (commercial buildings) 6. Labelled green property bonds (commercial/public buildings) 7. Structured financing: EPC/ESCOs/ Forfeiting (residential, public buildings) Notes: a) Tailor-made products reflecting specifics of the EBRD region b) Specific products to tap on opportunities in market segments commercial, public and private residential buildings c) Green buildings are understood in the meaning of both greening existing buildings in a cost-effective way as well as greenfield developments built in a low-energy/carbon way, and compliant with the best industry standards 17 October,

17 EBRD Green Cities Framework A systematic approach to address urban environmental performance and barriers through: Delivery of strategy and policy support (GCAP) Facilitating and stimulating green City infrastructure investments Building capacity of city administrations and key stakeholders 17

18 Green Cities Initiative Eligibility Criteria INFRASTRUCTURE INVESTMENTS Public Building Energy Efficiency District Heating Water & Wastewater Public Transport CITIES OF 100,000 Cities with smaller population sizes can be considered on a case-bycase basis considering the needs of the cities MUST CONDUCT GCAP To initiate the Programme, and is obligatory with the Programme s initial investment

19 Green Cities Development Cycle Policy Dialogue o improved tariff structure o environmental considerations in public procurement IV. Green City Reporting I. Green City Baseline priority environmental challenges identified o energy efficiency regulations in public buildings III. Green City Implementation II. Green City Action Plan indicative investments identified 14 GCAP complete

20 INTRODUCTION FINANCIAL INSTRUMENTS AND INITIATIVES CASE STUDIES

21 Integrating sustainability in building design of hospitals in Turkey PROJECT A consortium between a Turkish property company and an international Equity Fund will design, build and manage a new hospital campus in Adana, with several buildings and 1,500 beds. The project is part of a 12 billion Turkish government programme to build and expand 60 hospitals under publicprivate partnership (PPP) arrangements. INVESTMENT PLAN EBRD loan of which green financing IFC loan Other syndicated loans Sponsor contribution Total project value 115 million 75 million 56 million 287 million 92 million 550 million SUSTAINABILITY FOCUS Project will include measures above national practice: Advanced thermal protection, low-emissive glazing Building integrated solar thermal and solar photovoltaics installation Efficient boilers and chillers and waste heat recovery On-site combined cooling, heating and power generation Water saving techniques: water saving sensor control taps, rain water harvesting. TECHNICAL ASSISTANCE An EBRD assignments conducted for the Ministry of Health under the umbrella of the hospital PPP programme, assessed energy and water efficiency opportunities for one of the hospitals. This provided benchmarks for the cost-benefit analysis of improvement opportunities for the programme as a whole. PROJECT IMPACT 60,000 tonnes CO 2 estimated annual emission reductions compared to baseline project design Energy savings at 25% better than the national benchmarks (savings equivalent to annual energy use by 6,560 households in Turkey) Water savings equivalent of 4.6 Olympic size swimming pools. 21

22 Hines Poland Sustainable Income Fund PROJECT AND CLIENT EBRD is supporting Hines, a privately owned global real estate investment firm with locations in 185 cities in 19 countries. Hines has a commitment to sustainability. EBRD helped develop, and invested in this Fund it is the 1st Green Property Fund in the EBRD region. Investing in commercial property in Poland, the Fund will create value through active asset management, including systematic introduction of sustainability measures and sustainability certification. FINANCIAL STRUCTURE EBRD equity investment (in EUR): Fund Value at final closing TECHNICAL ASSISTANCE 50 million 155 million Support in setting up green lease policies Identifying cost-effective sustainability measures within the Sustainability Management Plan for selected assets. INTEGRATING SUSTAINABILITY MEASURES IN MANAGED ASSETS building infrastructure upgrades and improvements professional facility management with strong focus on energy/water saving and waste reduction Tenant engagement through green lease policies and dedicated Building Management Committees Sustainability policies embedded in Fund management, with qualitative and quantitative targets LEED/ BREEAM certification Sustainability performance will be linked to the Management Company s remuneration. 22

23 Green Economy Financing Facility (GEFF) GEFFs are a good example of products that blend both public and private finance. Through GEFFs the EBRD extends credit lines to local financial institutions seeking to develop sustainable energy and resource financing as a permanent area of business. Local financial institutions on-lend funds to small and medium-sized businesses, corporate and residential borrowers. Finance is provided for energy efficiency and smallscale renewable energy, water and waste efficiency projects. GEFFs establish project implementation teams who support local financial institutions and their clients. GEFFs are effective in reaching a wide range of small and medium-sized business and residential clients.

24 GEFF key characteristics Key beneficiaries 1 Individuals or groups of individuals, condominiums or housing cooperatives 2 Construction Small and Medium Enterprises 3 Vendors of Sub-project eligible technologies 4 Housing management companies 5 Energy service companies Key benefits and value added Reaching markets that can not be financed directly (SMEs, small projects, projects in remote areas) Providing dedicated long-term financing Mobilizing private sector investment and leveraging donor funding Helping overcome barriers, raising awareness and passing on knowledge and promoting high efficient equipment.

25 GEFFs in residential building sector MunSEFF: Slovakia, Hungary ( ) EBRD financing: EUR 90 M Total of 402 sub-projects 219 residential 114 municipal building EE 69 municipal infrastructure EE Out of 183 municipal projects, 46 implemented by ESCOs Delivered energy savings (heat and electricity) of 58.1 GWh/year Portfolio-wide primary energy saving cost of EUR 54/ MWh SlovSEFF: Slovakia ( ) EBRD financing: EUR 190 M 500 sub-projects Grant Incentives 10-15% of loan amount Average Savings 34% Total Share of CO 2 Emissions Reduction 23% Eligible Sub-projects: Financing Housing Associations and Housing Management Companies for retrofit of apartment buildings Small-size renewable energy projects REECL: Bulgaria ( ) EBRD financing: EUR 110 M 53,300+ sub-projects Grant Incentives 10-20% of loan amount Eligible Sub-projects: Products, materials and technologies from a preapproved list of products, compliant with requirements beyond national regulations Individual dwellings (family houses and apartments) EE techniques in green-field residential developments (EPC of B+, A, A+) EE improvements in SMEs

26 Residential energy efficiency investments in Bulgaria- Project Veolia CLIENT AND PROJECT Through Residential Energy Efficiency Credit Line 3, the EBRD is assisting Veolia Energy Bulgaria, a private district heating company in energy efficient modernisation of over 500 residential buildings, reaching out to over 10,000 apartments. This will be the first GEFF sub-project where the sub-borrower is a district heating company that passes the benefit of investment incentive to residents. INVESTMENT PLAN EBRD loan (in EUR): PROJECT IMPACT 5.8 million Hot water losses reduced by 30%, Heating losses reduced by 20%, Electricity price reduced by 6-9% for end customers, Heating payments based on meters. Improved service, transparent and lower energy bills motivate the customers to stay connected to the district heating network, avoiding installation of individual electric boilers for heating and reducing the CO2 emissions. Investment incentive up to EUR 500,000 will be passed to the end beneficiaries the residents in the form of free-of-charge pipes and installations. ENERGY EFFICIENCY MEASURES Hot water: replacement of worn-out uninsulated hot water pipes with high-quality thermally insulated pipes; installation of water circulation system and individual water consumption radio meters. Heating: replacement of vertical heating units with horizontal units; installation of individual apartment heating meters. Solar energy units: installing roof-top photovoltaic units on residential buildings for combined electricity and heat supply to inhabitants to reduce the energy bills. The maximum installation capacity is 21 kwp. It is suggested to install such units on few buildings to demonstrate the positive effect of a comprehensive energy management approach. 26

27 Integrating resource efficiency and climate resilience in buildings in Jordan CLIENT A Jordanian shareholding company, majority owned by a leading private real estate developer in the MENA region, and partially by a state-owned corporation established to drive urban regeneration projects. PROJECT Support for the construction of a retail and entertainment centre as part of the larger Abdali Urban Regeneration Project in Amman. This is the largest mixed-use development undertaken in Jordan. EBRD involvement contributed with special emphasis on climate resilience and sustainable resource use: Energy efficient design: highly efficient heating and cooling system design, use of natural light. Materials efficiency: use of GGBS concrete (groundgranulated blast furnace slag, a metallurgical byproduct), recyclable polyester roofing; Water efficiency: rain water harvesting, grey water recycling. INVESTMENT PLAN EBRD loan of which environmental financing External Total project value US$ 80 million US$ 52 million US$ 239million US$ 319million IMPACT OF PROJECT Advanced efficiency measures in electrical systems and district heating and cooling design will lead to 6,000 tco 2 emission reductions annually. The mix of materials used will result in an overall carbon footprint 10% lower than common practice. Water efficiency measures enhance regional resilience to increasing water stress. Water savings amount to 2,400 m 3 /year Energy savings amount to 19,200 MWh/year 27

28 Sustainable Retail: Schwarz Green Stores Program in Poland and Serbia PROJECT AND CLIENT EBRD is supporting Lidl (Serbia) and Kaufland (Poland), which are part of Schwarz Group. The project focuses on green retrofits of stores in Poland and new green stores as part of business expansion in Serbia. FINANCIAL STRUCTURE EBRD loan (in EUR): of which green financing 200 million 130 million TECHNICAL ASSISTANCE Assessment of Kaufland and Lidl store models to evaluate Best Available GET Technologies. Supply chain sustainability gap analysis, scoping and delivery of technical support to local suppliers (and potential suppliers) for Lidl in Serbia EXPECTED IMPACT Energy savings: 23,600 MWh/year Emission reductions: 20,200 tonnes of CO 2 /year GREEN ECONOMY ELEMENTS LEED Gold certification for logistics centre in Serbia LED lighting and EMS Cascade cooling systems Refrigeration with heat recovery 28

29 Supporting ESCOs in Latvia using innovative forfeiting mechanism THE PROBLEM ESCOs are typically paid back through energy bills over a number of years This can however leave them short of cash with which to do more projects Typical bank debt helps only partially as it is short-term, borrowing capacity is reached quickly THE INNOVATION A fund specifically set up to purchase the receivables Receivables are from projects where the ESCO has begun to receive its payments from end-client Through the sale the ESCO has the cash needed to invest in further projects The ESCO is provided a fee to cover its maintenance and guarantee obligations under its contract with the endclient THE EBRD S ROLE Helped develop the financing structure Intend to provide debt financing to the fund purchasing the receivables

30 Selected case studies Marina Dalmacija is the largest Croatian marina EBRD supported the project of refinancing and refurbishment of the marina. The project is raising the quality of the nautical infrastructure and is also providing training. City Centre Mall, Split, Croatia The Bank provided energy performance assistance, capacity building and sustainability certification Registered for BREEAM certification; Class A+ passive energy building Advanced technologies used (Solar-BIPV over 1,000 sqm, Heat pumps, heat recovery, BMS) Better by 60% than national standard requirements; Sustainable energy investments of EUR 4.6 million out of EUR 31 million EBRD financing

31 Jadranka Hotels, Croatia Energy and resource efficiency Dedicated energy performance assessment conducted by the Bank Use of BAT energy and resource efficiency techniques (e.g. LED lighting, high efficiency HVAC, renewable energy, integrated BEMS, water saving facets etc.) Energy and carbon performance lower by 31% compared to the energy baseline Professional facility management with focus on resource efficiency (monitoring and targeting) Awareness raising activities on environmental protection for guests CAEPC Physical impact Incremental green investments: ~ 2 million Primary energy savings: 1,100 MWh/year Energy performance (average): 180 kwh/m 2 (compared to baseline of 264 kwh/m 2 ) Carbon reductions: ~ 300 tco 2 per year

32 Case study - Kyrgyz Republic POLICY DIALOGUE ACTIVITIES Comprehensive assistance to prepare: Primary Law on Energy Performance of Buildings, introducing responsibilities of building owners and instruments to promote EE in buildings Secondary legislation on energy performance certifications and regular inspections of boilers and heating systems Tertiary legislation on harmonising technical standards (on thermal protection of buildings, heating networks, water supply, etc.) REGULATORY RESULTS The new legislation transposes all key provisions of the EU Directive on Energy Performance of Buildings (EPBD) up to the best practice level in EU countries. Primary law was approved by Parliament and signed by the President of the Kyrgyz Rep. in It defines legal obligations related to energy efficiency of building owners, public bodies and state authorities. Secondary legislation introduces minimum mandatory energy efficiency requirements, a methodology for energy performance assessment (in compliance with ISO EN 13790/2008) and for certification of buildings. WIDER MARKET DEVELOPMENT Legislative upgrades incentivize developers, owners and residents to invest in thermal rehabilitation and equipment upgrades. Policy dialogue part of wider, integrated, market development approach related, investment-focused activity has been the parallel launch of the Kyrgyz Sustainable Energy Financing Facility. KyrSEFF offers credit lines to 4 partner banks to on-lend to energy efficiency projects in the business and residential sectors. Commercial funding is complemented by incentive grants and technical assistance from the EU. 32

33 Green Buildings An opportunity for cooperation In order to scale up and achieve better outcomes, the Bank is working with a wide range of professional and institutional partners: MDB Climate finance methodology, IFI Green Building Alliance Climate Bond Initiative (Technical working group (TWG) for Buildings and potentially other sector TWG) World Green Building Council World Business Council for Sustainable Development UN World Trade Organisation on sustainable tourism European Facility Management Network Industry professional associations across Europe 17 October,

34 EBRD Model Loan applications can be general or already energy efficiency focused The bank conducts the normal credit analysis of the company Add-on energy efficiency components are agreed for financing Usual credit assessment cycle Energy efficiency scoping Loan application Initial screening Bank Credit Analysis Full energy assessment Client accepts additional investments Enhanced financing package Clients are Priority investment initially screened measures are for (additional) recommended energy efficiency based on potential technical and financial analysis The Client accepts the recommended measures based on the calculated financial returns 34

35 FOR MORE INFORMATION PROJECTS TRADE FACILITATION PROCUREMENT Contact Details Romano Pehar Energy Efficiency and Climate Change Department tel: peharr@ebrd.com European Bank for Reconstruction and Development One Exchange Square London, EC2A 2JN United Kingdom