National Energy Conservation Agency (Poland)

Challenge

The technical condition of buildings in Poland requires a significant improvement due to their age and non-compliance with energy standards, and often non-ecological energy supply. Even though there is potential for energy performance contracts (EPCs) to improve these conditions, a lack of effective regulation, coherent and tailored financing systems, as well as technical and institutional capacities prevent their dissemination.

Innovative approach

The National Energy Conservation Agency (NAPE) of Poland submitted a proposal to the City Finance Lab for the development of an Energy Performance Contracting (EPC) scheme to stimulate deep retrofitting of buildings in cities. Previous financing for the energy modernisation of public and residential buildings in Poland involved private capital, to a small extent. The use of EPC schemes limits the debt barriers of local and private building owners, also reducing the complex administrative process to secure public financing. Still, local regulation, high transaction and project preparation costs, and lack of capacities amongst participants prevent further adoption of EPCs.The proposed scheme aims at providing a financial instrument and building capacities amongst the local government and energy service companies (ESCOs) to finance, adopt and monitor EPCs. The scheme would consist of four elements: standard EPC contracts and retrofitting measures; energy audit grants; loans for investments from local financial institutions; guarantees from international financial institutions. The objective of the scheme is to scale private investment in deep retrofitting of buildings, reaching the entire Polish territory. Building retrofits has been identified by the European Union as a pillar of their efforts to reduce greenhouse gas emission, hence there is a high replication potential for the scheme in other European countries.

City Finance Lab activities

Identifiy standards, procedures and contract models for Energy Performance Contracting applicable to the Polish context.
Develop functional specifications for a user friendly software to support municipalities during implementation.
Structure standard loans for investment from domestic financial institutions.
Develop counter-guarantees in partnership with development banks or domestic financial institutions.