Bridging the gap: a platform to connect small industrial efficiency projects with the capital markets

Panel: 5. Business models, finance and investment

Authors:
Jürgen Fluch, AEE – Institute for Sustainable Technologies
Department Industrial Processes and Energy Systems, Austria
Christoph Brunner, AEE - Institute for Sustainable Technologies, Austria
Winfried Braumann, REENAG Holding GmbH, Austria
Jason Erwin, Borg & Co AB, Sweden
Nils Borg, Borg & Co AB, Sweden

Abstract

Smaller suppliers of renewable energy (RE) and energy efficiency (EE) projects face business constraints. Smaller projects are not bankable due to a lack of standardised procedures for technical assessment, due diligence, and risk assessment in line with standard financing practice. This situation prevents project-based financing.

Smaller suppliers cannot make projects more attractive to customers by offering special payment conditions (i.e. energy performance contracts/savings arrangements), as the suppliers’ working capital would be locked into existing/delivered projects and unavailable for developing new projects. These factors dampen EE and RE project deployment in particular for SMEs.

To accelerate implementation of SME-generated projects, TrustEE (initially an EU-funded project) developed and commercialized a platform. The key features include: streamlined and standardised technical and economic assessment; risk and credit assessment procedures coupled with insurance offerings complying with standard banking practice; multi-year repayment plans for industrial end-users; and standardised preparation of the project portfolio for securitisation (a later phase).

In short: TrustEE is a new service combining project development with standardised assessment to improve the liquidity of all parties involved and deliver bankable projects to the capital markets.

Registered suppliers initiate the process by applying for project financing via the platform. If positive, TrustEE purchases the open receivables upon project commissioning. This step ensures that the supplier retains the technical risk during the operational phase, which is critical for investors. Suppliers can thus offer their industrial customers a re-payment plan over several years.

Today standardised assessment for thermal EE, solar process heat, biomass, biogas and heat pump projects are implemented into the platform. PV, optimised control systems and other technologies will be added in short-term.

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