What are the solutions to the municipal budget cuts? How can the cities finance their energy transition? What can we do to make it a driving force to boost the local economy and job creation? What are the new financial cash flows for this new economy?
One of the solutions is to rethink financing solutions, and the local authorities that are engaged in energy transition are the best placed to do so !
Many front-running Covenant signatories dedicate their human resources to financial engineering and creation of innovative financing schemes that will help them keep the money spent on energy near home. They strive for sustainable, longterm financing solutions capable to generate large-scale investments.
Indeed, financing energy transition will require strong technical, financial, legal and coordination skills and expertise in local authorities.
The financing schemes have been selected with the aim to present a myriad of different solutionsthat are implemented to address the same problem.
The Less Carbon Climate Fund
Almada’s municipality range of competences and responsibilities imply the development of activities aiming at reducing energy consumption and greenhouse gas emissions (GHG). In 2009, Almada’s City Council created the Almada Less Carbon Fundin order to reduce its carbon footprint via investments in energy efficiency and renewable energy. The financial sources of the fund are based on a simple economic valuation and monetisation of the GHG generated by the City Council’s regular activities which feed the fund. The fund is a voluntary scheme of the municipality and it is a one-of-a-kind initiative in Portugal.
The Brussels Green Loan Scheme
Buildings are responsible for 72% of the energy consumed in the area of Brussels-Capital Region. Since 2004, the Brussels Region has experimented different tools to improve the energy performance of buildings on large-scale in order to test and demonstrate the capacity of the city’s stakeholders and citizens to make use of them. One of the tools is the Brussels Green Loan Schemefor Brussels’ residents – private housing owners and/or tenants.
A semi-public company: SEM Energies Posit’IF
In 2013, the Ile-de-France Region took a strong political decision and launched a public-private operator whose aim is to facilitate energy renovation of multi-residential buildings (condominiums) and social housing organisations, deployment of renewable energy technologies and innovative financing. The operator has a status of a semi-public company (in French: Société d’Economie Mixte –SEM) called Energies POSIT’IF. The status of a semi-public company requires 51 to 85% of the capital to be held by public authorities and at least one private person to contribute to the capital (this can be another SEM).