EPC and why public authorities shouldn’t shy away from it – New Guide on EPC Accounting Rules released


Publication date

May 14, 2018

As follow-up to the EUROSTAT accounting rules decision last year, a new guide has been published by EIB, Commission and Eurostat : “The Practitioners’ Guide on the Statistical Treatment of Energy Performance Contracts in public accounts”. It explains in detail how Energy Performance Contracts work and gives a clear overview of the potential impact on government finances.

Download the guide.

EPC and why public authorities still shy away from it
EPC stand for Energy Performance Contracting, which is an attractive financing model that uses cost savings from the project to finance the construction work, sometimes with no upfront cost. So-called Energy Performance Contracts, or EPCs for short, can help mobilise private investment and expertise in energy efficiency in public sector buildings. Energy Performance in buildings is part of the legislative package “Clean Energy for all Europeans”– a key element for achieving a resilient Energy Union and a forward-looking climate change policy.

The public sector’s decision to procure energy efficiency projects as EPCs, however, is sometimes influenced by expectations as to their statistical treatment (i.e. impact on government debt and deficit figures). Uncertainty in how to assess the statistical treatment of EPCs can therefore create difficulties and delays in the various stages of preparation and implementation of investment projects.

A guide for preparing and financing energy efficiency projects
“This new guide aims to help public authorities to prepare and finance projects, by mobilising private capital and expertise for the benefit of the public sector under Energy Performance Contracts. This is one of many steps the EIB is taking through our joint “Smart Finance for Smart Buildings” 
initiative with the European Commission to unlock more energy efficiency investments in public and private buildings.” said Andrew McDowell, EIB Vice-President with oversight for Energy.

The guide explains in detail how Energy Performance Contracts work and gives a clear overview of the potential impact on government finances. This will help Member States and other stakeholders to better understand the impact that the different features of these contracts have on the classification of the investment undertaken, on or off government balance sheet, and will assist public authorities in taking better-informed decisions when preparing and procuring their EPCs. This Guide is also a helpful tool to provide clarity to public and private promoters in the context of the Investment Plan and remove perceived barriers to investment.

The Guide also explains how to make use of technical assistance resources from the European Investment Advisory Hub (EIAH).

For specific background on financing of energy efficiency measures of public and residential buildings, you may have a look at the INFINITE Solutions guidebookdeveloped by Energy Cities.

Background information :

Investment is a key priority for Europe. This is why, with the EIB as its strategic partner, the European Commission launched the Investment Plan for Europe in November 2014. Energy Cities’ issued a position paper to the Plan
The Investment Plan – the Juncker Plan – focuses on boosting investment to generate jobs and growth by making smarter use of financial resources, removing obstacles to investment, and providing visibility and technical assistance to investment projects. The European Fund for Strategic Investments (EFSI) is the main pillar of the Juncker Plan and provides first loss guarantees, enabling the EIB to invest in more projects that often come with greater risks.

Read also about Energy Cities’ meeting with the EIB in February
All ears, the EIB Board of Directors was listening to and debating with the locally experienced such as Energy Cities’ president and Lord Mayor of Heidelberg, Eckart Würzner.