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Scaling up Public Energy Efficiency Investments via Standardising Citizen Financing Schemes

Periodic Reporting for period 1 - CitizEE (Scaling up Public Energy Efficiency Investments via Standardising Citizen Financing Schemes)

Reporting period: 2019-05-01 to 2020-10-31

The energy transition causes significant challenges in the building sector, which demands profound changes not only on the economic perspective, such as implementing innovative financial models to overcome financial barriers, but also fostering cooperation between all actors involved, paying particular attention to citizens and communities.
It is essential to advance the business cases for energy efficiency measures and to increase support for respective projects, by standardising citizen financing in investment programs. Therefore, there is a need to consider the role of different actors, such public authorities, financial institutions and project developers, and the interactions with innovative citizen models, particularly at the regional and national scale.

The main objective of CitizEE is to support European public authorities to scale up funding for energy efficiency in the building sector by attracting citizen private investments.
CitizEE will address this objective by means of integrating tailored and widely adopted crowdfunding and cooperative financing schemes with adequate available or to be developed Public Financing Instruments (PFIs). As a result, CitizEE will enable the set-up of large-scale community energy efficiency programs while strengthening know-how of regional/national key stakeholders.

Citizen financing schemes (CFs), crowdfunding and cooperative models alike, have been a success in financing renewable energy projects. However, citizen access to such alternative financing mechanisms is still far from having reached its full potential, especially when energy efficiency projects are the ones seeking funding.
The development of Citizen Financing Schemes for Energy Efficiency projects (CFs4EE) is, in fact, a relatively new concept, in some cases, with limited capacity to increase investments levels due to unfavourable boundary conditions.
CitizEE’s ambition is to put in place a sound enabling legal, financial and operational environment aimed at: (i) making a more efficient use of public funds (ii) mitigating performance & credit risks, (iii) closing financing gaps, (iv) enlarging citizen access financing, (v) reducing transaction costs (vi) enhancing capacity of local crowdfunding operators and cooperatives and (vii) stimulating the required investment towards higher renovation rates and thus a more efficient building stock.

To meet its ambitious goals the work has been structured for achieving the following objectives:
1. Prepare the groundwork for the establishment of Citizen Investment Platforms.
2. Evaluate competitiveness of the CFs4EE Financing Schemes (CFs4EE + PFIs) to be developed by the project.
3. Demonstrate the viability and market potential of CitizEE’s CFs4EE Financing Schemes.
4. Develop recommendations for improving the market and regulatory framework.
5. Enhance the in-house capacities of the relevant stakeholders.
6. Promote the project concepts and its advantages among those who could support citizen financing schemes deployment.
1. For preparing the groundwork for the establishment of Citizen Investment Platforms, the following work was done:

- a comprehensive report on the institutional, organizational and procedural aspects of ensuring an effective set-up of EFSI-backed Citizen Investment platforms and an action plan for the establishment of the Citizen Investment Platforms in each pilot regions
- a sound review of regulatory & legal investment frameworks for the project pilots
- a market barriers analysis and market segments evaluation
- regular working meetings with the Pilot Regions.

2. For the competitiveness evaluation of CFs4EE Financing Schemes (Citizen Financing & PFI), the following work was done:

- a benchmark study of existing and addressable Public Financing Instruments
- a methodology to address Structured Financing solutions
- a Citizen funding market assessment report is currently under development in order to analyse existing experiences with citizen funding in the energy sector
- a study on behalf of FI Compass on the use of financial instruments to support the development of crowdfunding in the social sector via the European social fund
- a financial simulation tool based on the characteristics of the structured financial solutions and specific financing instruments to be used under the Pilot Regions CFs4EE Scheme including two capacity building workshops.

3. Demonstration of CFs4EE Financing Schemes viability and market potential

Currently, a common framework of analysis and a template to be used by the Pilot Regions is under development in order to:
- design the CFs4EE Financing Scheme in each Pilot Region
- implement the CFs4EE Financing Schemes
- identify and perform a risk mitigation strategy related to the implementation of the CFs4EE Financial Schemes
- supervise the implementation of the CFs4EE Financing Schemes to ensure the good execution of the pilot countries/regions target EE investment programs and the achievement of the KPI.

4. Enhance the in-house capacities of the relevant target group and stakeholders & dissemination objectives to support citizen financing schemes deployment
Communication & Dissemination activities include disclosing the project results to the target group through appropriate means and mediums were done through:
• launch and continuous update of the project website
• development of the project identity, leaflet and poster
• dissemination through LinkedIn, Twitter
• participation to workshops, fairs and conferences
• publication of articles, newsletters
• establishment of the advisory board.

In addition, a continuous monitoring of the project activities is being carried out, a preliminary list of experts has been collected and a preliminary schedule for the expected capacity building workshops and webinars has been prepared taking also into considerations the project delays due to COVID-19.
The outcomes from the CitizEE project are expected to deeply modify the current paradigm by contributing to improve citizen participation in the clean energy transition while transforming our energy system to a more secure, sustainable, renewables based, affordable and competitive one.
A successful citizen involvement will rely on various factors, two of the most decisive ones are the economic perspective as well as social aspects. CitizEE will address this challenge by (i) implementing innovative financial models to overcome financial barriers; and (ii) fostering cooperation between all actors involved, paying particular attention to citizens and communities. Based on this, CitizEE estimates that 18.6 million EUR of investments and 10 GWh in terms of energy savings will be triggered by the implementation of the scheme. CO2 emissions will be reduced by around 2,987.50 Tons.

Finally, a strong exploitation strategy including capacity building activities will be carried out. The goal will be to deliver specific training to regional/national stakeholders and to promote the outcomes and replication potential of the schemes developed.