LAUNCH: sustainable energy assets as tradable securities

Project Information

LAUNCH

Grant agreement ID: 847048

DOI

10.3030/847048

Project closed

EC signature date 11 April 2019

Start date 1 May 2019

End date 31 October 2021

Funded under

• SOCIETAL CHALLENGES - Secure, clean and efficient energy

Total cost

€ 1 409 070,00

EU contribution

€ 1 409 070,00

Coordinated by

JOULE ASSETS EUROPE GROUP SRL
Italy

Periodic Reporting for period 2 - LAUNCH (LAUNCH: sustainable energy assets as tradable securities)

Reporting period: 2020-11-01 to 2021-10-31

Summary of the context and overall objectives of the project

In order to reach Europe’s 2030 energy efficiency and carbon reduction targets, large-scale finance of SEA projects is necessary. Investments to improve the energy performance of buildings must be increased and financial capital mobilised at a much larger scale. There an interest on applying a portfolio approach to smaller SEA projects, through standardised contracts and risk assessment protocol able to help with the market growth, in order to accelerate the scaling of project finance and the development of SEA as tradable securities.

Small project sizes (20-200k€ of investment at a time) and SMEs in the energy efficiency sector struggle particularly hard to access affordable third-party financial sources. The key aim of LAUNCH was to enable the standardized processing of energy efficiency investments with a set of new industry-tested tools (end client EaaS contract, risk assessment protocol, etc.) to allow the aggregation and securitization of energy efficiency project investments.

The specific objectives of LAUNCH are:
a) refining the off-balance sheet SEAD-End client contract and tests the market acceptance in cooperation with financial funds, retail banks and SEADs, to encourage project aggregation across pools of investments;
b) compiling and refining generic risk assessment methodologies in cooperation with financial funds and SEADs, resulting in a user-friendly, standardised protocol to encourage project aggregation across pools of investments;
c) working with private equity investors and SEADs to create a set of standardised presentation templates (financial spreadsheets and investment pitch presentation), allowing quick and accurate assessment of SEAD companies as potential investment opportunitiess by PE funds. A standard investment memorandum outline template was created to enable the creation of investment funds with the ultimate objective to provide finance also for smaller SEADs;
d) supporting SEAD sales growth, and accelerating SEA volume. SEADs different End-Client segments were identified and suitable value propositions and corresponding marketing messages were developed.

In order for these tools to have real value and to really create uptake in the market, the interaction with hundreds of stakeholders (project developers, ESCOs, financial funds, banks) helped co-create and test them.

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

For each Work Package, the following work and results have been produced.

WP1: the project was adequately co-ordinated and organized at strategic level, assuring an interface between the Consortium and EC. Policies related to project management and data access were set-up, as well as the day to day project management, project reporting, IRP management and participation in common dissemination activities.
Main outputs:
- Creation of Project Manual and Project Website
- Progress Report submitted in M9
- Period reports in M18 and M30

WP2 aimed to refine and standardise an off-balance sheet SEAD-End Client contract. The objective was reached by contracts comparison and development of 2 drafts of a standardise contract.
Main outputs:
- A final draft of an off-balance sheet SEAD-End Client contract, working as a hybrid form between an EnPC and an as-a-service agreement.
- Contract translations into 6 languages and transpositions into 9 European languages
- Key specifications for the setup of a transfer agreement for securitising receivables from EE projects

WP3 looked to create and finalize a standardised Risk Assessment Protocol (RAP) covering 17 different risk types. The final version of the RAP was translated into different European languages: Italian, German and Dutch.
Main outputs:
- A final version of the Risk Assessment Protocol, including 17 different risk types, among which an ESG questionnaire that is fully integrated with the requirements of the EU Taxonomy

WP4 supported the SEAD in making their outreach and presentation to Private Equity investors as well as with an array of sales tools, value propositions and marketing messages for their end-client relationships.
Main outputs:
- Standardized financial representation spreadsheets
- Company representation templates for private equity investors
- Investment Memorandum Template
- Report on SEAD business models and end-customer segmentation
- Value propositions and key marketing messages to support SEADs' sales

WP5 focused on piloting and testing materials developed in WPs 2, 3 and 4. During the Pilot design phase, the LAUNCH Consortium decided to create the Launch Education Program, in order to help project developers to actively apply the LAUNCH standardised materials and share best practices among each other.
Main outputs:
- Report on main findings for the introduction of materials
- Report on main findings from piloting of the materials
- 22 (17 project developers and 5 investors) tested and piloted the LAUNCH materials in active energy efficiency and clean energy projects
- The work with Pilot Programme participants has triggered a substantial amount of (potential) investment: 2,1M€ in Closure; 30,9M€ in Processing; 118M€ in Exploring.

WP6 aimed to develop dissemination, communication and education materials related to the project, and engage project stakeholders in various activities.
Main outputs:
- Key materials including a brand guide, maintenance of project website, Twitter account and mailing list, investor forum video and printed material.
- Establishment of the Investor Board representing funds, banks and investment firms
- Establishment of the SEAD Stakeholder Group
- Creation of the LAUNCH Learning Hub
- Implementation of the LAUNCH Education Programme
- Engagement of 460 stakeholders across Europe

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

Both the standardised end-client contract and the risk assessment protocol represent first-of-their-kind tools for energy efficiency project finance in Europe. At the end of the LAUNCH project and several cycles of feedback and testing, the LAUNCH consortium has translated and transposed these materials into several additional languages and jurisdictions, covering a geographical area inhabited by more than 320 million Europeans. The last 12 months of the project focused on the application of these and other LAUNCH materials in real-life projects, an ambitious piloting effort for which the groundwork had been laid in the first reporting period. 22 (17 project developers and 5 investors) tested and piloted the LAUNCH materials in active energy efficiency and clean energy projects (consisting of either as-a-service or with energy performance components), and in financing deals between investors and project developers. LAUNCH, together with these Pilot Programme participants, has triggered a substantial amount of (potential) investment: 2,1M€ in Closure; 30,9M€ in Processing; 118M€ in Exploring. Overall, more than 460 project stakeholders were reached by LAUNCH communication and dissemination activities, and an Investor Board created with 12+bn € of assets under management. The LAUNCH education programme has proven a great success and will continue to educate SEADs across Europe in accessing growth capital and accelerating deal closure with their clients and investors alike. These learnings, the strong pan-European stakeholder network and the impact of our work, has inspired the LAUNCH consortium to continue the work on financing Energy Efficiency through the H2020 PROPEL project, and establishment of the European Sustainable Energy Finance Association (SEFA).

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