Revolving loan funds

Financial incentives such as grants, guarantees or soft loans for energy renovation could motivate homeowners to make the investment decision more easily.

Generally speaking, local and regional authorities in cooperation with financing institutions can offer to homeowners of private residential buildings other financial instruments like soft loans or loan guarantees.

• Soft loans are loans with interest rates below standard market conditions and longer payback periods, including eventually other advantages (e.g. grace period, lower administrative or insurance costs)
• Loan guarantees in a form of buffer by first losses of non-payment are incentives triggering investments in energy renovation.⁹

As a result, towns, cities, regions or provinces can decide to support energy efficiency in the form of so called “revolving loan funds” which may vary significantly regarding internal conditions of their utilisation, resources used or actions supported. There is probably not possible to indicate a universal scheme of these funds, therefore two options are introduced which were identified by BOOSTEE-CE consortium:

• Regional financing scheme including the support for individuals KAWKA - liquidation of the local heat source fired with solid fuel - the city of Jelenia Góra, Poland (KAWKA)
• Energy Fund - Multyscope Regional Fund of public financing in Emilia-Romagna, Italy

KAWKA (Poland)

The main objective of the program is to reduce people's exposure to the impact of pollution, in particular PM10, PM2.5 and benzo(a)pyrene, threatening the health and life of people in zones in which there are significant exceedances of permissibleand target concentration levels of this pollution and for which air protection programs have been developed.

The beneficiaries of the majority of projects are self-governments, which allocate funds for the elimination of coal-fired heat sources in municipal buildings and houses belonging to individuals and housing communities. In many projects, the partners were local heating companies.

In most cases, the projects concerned connecting consumers previously using coal-fired boilers and ovens to urban heating, and replacing coal (individual and central) heating with gas heating. In many cases, multi-family buildings have also been subjected to thermo-modernization in order to achieve savings in energy consumption and reduce heating costs.

It is the program also targeted at individuals. It allows for support and includes a package of incentives available where the individual heating system is the main source of low emissions. The beginning of the program was preceded by an information and promotional campaign, including:  publishing a brochure, organizing meetings, broadcasts on local radio and television, advertisements in the local press and on the website of the city of Jelenia Góra.

General scheme of KAWKA financing

The whole description of this best practice is available on OnePlace Platform / EE Financing Module, the Factsheet #8 - KAWKA - liquidation of the local heat source fired with solid fuel- the city of Jelenia Góra – regional financing scheme including the support for individuals.

Multyscope Regional Fund of public financing (Italy)

This fund is a revolving fund of soft loan financing, privately-funded for the purpose of providing loans at a reduced rate. Beneficiaries are SMEs and large companies closely specified by the terms and conditions of the Fund.

Among eligible interventions to reduce the Energy consumption belong:

• Thermal insulation
• Replacement of transparent closures and fixtures
• Replacement of winter air conditioning systems
• Redevelopment of lighting systems
• Installation of automatic management and control technologies for thermal and electrical installations
• Installation of solar thermal collectors
• Installation of photovoltaic systems
• Industrial heat recovery
• Efficiency of refrigeration systems
• Efficiency and replacement of machinery
• Efficiency of the electric engine park of the production site
• Energy Reduction of compressed-air compression plant
• Savings in pumping systems
• Cogeneration plants

General scheme of the Multyscope Regional Fundfinancing in Emilia-Romagna

The whole description of this best practice is available on OnePlace Platform / EE Financing Module, the Factsheet #2 - Energy Fund  - Multyscope Regional Fund of public financing in Emilia-Romagna, Italy.