ESCO in Latvia
ESCO basis for the development of Latvia
Key growth factors for the development of ESCO
Constant increase in energy prices; Legislation - EU Directive 2010/31/EU - renovated energy-efficient buildings at least 3% annually / energy certificates / = new buildings which are zero energy buildings; Constant quality level for construction and engineering services; Market pressure - building total rental amount; The abolition of subsidies and liberalization of energy markets; Growth of the energy taxation
The main barriers for the development of ESCO
Insufficient quality of public information on the ESCO; Lack of client confidence; Concept of excessively high technical and business risks; Lack of adequate legislation on public procurement; Generally accepted, the lack of standard savings measurement and verification process; Lack of appropriate funding sources; Small size of projects; Unclear ESCO partner status for apartments in the housing sector; Energy efficiency is not in the daily routine/agenda; Low energy prices - this obstacle in Latvia has been corrected!
ESCO could be the company with the necessary skills and resources (including financial resources) to work on energy efficiency
ESCO provided energy services:
Energy Audit; Energy efficiency improvement measures or set of measures (project) development, financial assurance, implementation or monitoring; Distribution equipment, installation or maintenance; Energy savings guarantee or monitoring; Public education on energy efficiency
The key challenges
There is no legal framework for ESCO certification, so there is no functioning ESCO certification system; There is a need to establish clear qualification requirements for ESCO: now following requirements should be the invitation to tender or should take into account when concluding a contract with the ESCO; ESCO activity may interfere with the energy supply companies, which do not have an economic interests in reducing energy consumption; ESCO system is important for the effective functioning dispute settlement - many issues related to contract - are technical and complex, which have to be solved in the short term.
Funding for Implementation of industrial energy efficiency projects (Citadele Bank)
Priority sector for crediting – agriculture, manufacturing, wholesale, transport. Indicative funding conditions for industrial energy efficiency projects Form of financing: credit, leasing Amount: Up to EUR 10,000,000 Term: up to 10 years in real estate and up to 5 years for equipment Collateral: Real Estate, Equipment Other conditions: It is desirable to obtain EU funds, co-CCFI Each energy efficiency project separately must have a positive cash flow Prerequisites for a loan - transparent financial and clear business plan, ability to implement a business plan.
REFERENCE: International scientific conference CIVIL Engineering ’13; Passive House Latvija,Krišjānis Kalnciems, 17th May 2013, Jelgava, Latvia
Renesco in LATVIA
RENESCO Ltd. (initially - Sun Energy Baltic) was founded in 2008 as a subsidiary company of the Dutch company ZON Energie, and its business is development of energy efficiency projects for residential housing.
•is the first energy service (ESCO) company in Eastern Europe offering comprehensive renovation of apartment buildings;
•invest 100% of its own capital into existing privately owned multi-family apartment buildings on the basis of future energy savings;
•combines experience of foreign and local experts in energy efficiency, renewable energy, project finance and project management;
•works together with international finance institutions (European Investment Bank, IFC, EBRD) and local and national government institutions to address the huge and urgent task of transforming Soviet-era housing stock.1
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