Policy Pathways Brief - Joint Public-Private Approaches for Energy-Efficiency Finance 2017

Public-Private Financing of Energy Efficiency Projects

Key Challenges

• Limited Technical Expertise: Insufficient knowledge in identifying energy efficiency opportunities.
• Inadequate Financial Know-how: Lack of understanding in financial aspects.
• Restricted Access to Capital: Limited availability of funds.

Critical Factors for Success

• Technical and Financing Skills: Availability of capital and expertise.
• Enabling Environment: Creation of a favorable ecosystem for public-private partnerships.

Policy Pathway

1. One Size Does Not Fit All

   • Structure agreements tailored to local conditions.
   • Ensure flexibility to adapt to changing markets.

2. Roles and Responsibilities

   • Public Sector: Determine implementation steps and manage the process.
   • Private Sector: Lead in implementation.

3. Third-Party Evaluation

   • Independent assessment of the partnership design and implementation.
   • Evaluate performance and lessons learned.

4. Risk Mitigation

   • Public sector should consider the cost of risk versus the value of services delivered.

Implementation Steps

1. Plan

   • Identify Market Segments: Where energy efficiency needs improvement.
   • Choose Public-Sector Interventions: Select appropriate mechanisms.
   • Structure Agreements: Between public and private partners.

2. Establish Financial Barriers

   • Identify Sectors: Face financial barriers.
   • Set Goals: Short and long-term based on alleviating barriers.

3. Cost-Benefit Analysis

   • Compare Options: Ensure the selected mechanism is the most effective.

4. Project Design

   • Implementation Conditions: Include tendering routes.
   • Tendering Route: Finalize project details.

5. Implement

   • Define Steps: Including lending and risk management processes.
   • Capacity Building: Requirements and communication needs.
   • Feedback Mechanisms: For both private partners and the market.

6. Monitor

   • Contract Management: Ensure service delivery.
   • Performance Assessment: Against agreed standards.

7. Evaluate

   • Independent Review: By third-party organizations.
   • Evaluation Parameters: Define key indicators.
   • Document Lessons Learned: Positive and negative factors.

Case Studies

• Global Examples: Provide insights from various regions.

Resources