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SUNShINE builds a project pipeline of € 25M for deep renovation of multi-family buildings in Latvia

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Image by Peggy und Marco Lachmann-Anke from Pixabay

The SUNShINE project – funded under H2020 Energy Efficiency - has successfully set up the Latvian Building Energy Efficiency Facility (LABEEF) to support ambitious energy renovation projects in multi-family buildings using Energy Performance Contracting (EPC).

A project pipeline of over 30 buildings has been developed by the project of which five have been fully renovated. Like many other Eastern European countries, Latvia has a significant stock of multi-family buildings that were built between 1954 and the late 1980s, never fully renovated and bear huge energy saving potentials. 

 

Realising these saving potentials requires designing, financing and implementing complex energy efficiency investments. However, nearly all apartments in Latvia are privately owned.

 

Individual apartment owners are not sufficiently organised and have the capacity to manage complex energy renovations. In addition, many apartment owners are reluctant to engage in debt financing and often there is limited availability of funding for deep energy renovation.  

 

On the service supply side, energy service companies (ESCOs) can facilitate the renovation process, but have limited balance sheet capacity and are not able to support long-term debt.

 

The SUNShINE project successfully addressed all these barriers by setting up LABEEF, which supports ESCOs in implementing renovation measures in multifamily buildings based on energy performance contracting, guaranteed energy savings and quality standards in delivering the renovation works.  LABEEF forfeits the EPC contract and continues to collect the EPC receivables (payment from the apartment owners) until the renovation investment has refinanced itself. 

 

Through this mechanism, the execution risk stays with the ESCO while the financing risk is transferred to LABEEF. To be able to forfeit the EPC contracts, LABEEF has received a loan from the European Bank for Reconstruction and Development (EBRD) and can be further up-scaled through public and private investors. 

 

SUNShINE proved that LABEEF could significantly contribute towards the European renovation wave. It has fully finalised five deep renovation projects triggering over €5m of energy investments and 1.64GWh/year of primary energy savings.

 

A further 26 projects are currently in the pipeline worth €20m of energy investments, and more importantly, the concept of LABEEF is now further replicated in other Eastern European countries. 

 

More information can be found here.