There is robust interest on the part of financial institutions to finance Energy Efficiency (EE) Projects in Europe. However, in order for these institutions to provide funding at scale, increased volume, replicability, standardisation, and aggregation of projects are critical. The shift in focus from individual projects to a portfolio approach has been successful in recent years with large renewable energy projects, and now the challenge is to extend this approach to smaller EE projects. Usually, (95% of the time) if project developers are brave enough to attempt this journey, they will discover, often not until the very end of the process, that they have neglected critical risk factors and their projects are not financeable. This can be after 2 to 3 years of work, and the associated unrecoverable costs. The non-standardised, unstructured approach to developing projects increases the project failure rate and slows market growth, for everyone, including institutions such as the European Investment Bank (EIB), as well as the project developers themselves. Indeed, these failures can lead companies to the edge of bankruptcy, and sometimes over it.
The scattered and fragmented nature of the energy efficiency market, with many small-scale projects being implemented using multiple technologies across different types of clients, makes mainstreaming EE finance challenging. The existing fractured and disorganised set of tools and materials, some of which are maintained, others not, and none of which have been designed to fit together into a holistic end-to-end service package, are utterly insufficient to meet the needs of the EE market. There is therefore a critical need for a single, holistic resource entity in Europe, which will be maintained and has ALL the critical collateral and process resources required to develop, sell, contract and finance energy efficiency projects at the scale and speed required. This is the vision for PROPEL – to set up such an entity that can provide long-lasting, continuous stimulus to the growth of the energy efficiency market in Europe.
