Finansēšanas iespējas mājokļu energoefektivitātes paaugstināšanai Latvijā/Lina Drechsel, Ieguldījuma fonda projektu vadītāja, JESSICA, Eiropas Investīciju banka Prezentācija tika rādita 2012.gada 15.marta starptautiskajā konferencē „Daudzdzīvokļu māju pārvaldīšana un renovācija Latvijā un pasaulē”

1. JESSICA - Financing residential energy
efficiency renovations in Latvia
March 2012
European Investment Bank – JESSICA and Investment Funds 1

2. Overview of JESSICA
• A management and advisory programme, launched by the EU Commission in
collaboration with EIB, to assist Member States and regions to invest Structural
Funds in urban projects forming part of an integrated plan for sustainable urban
development (including energy efficiency)
• Overall JESSICA objectives:
 Higher productivity of Structural Funds / public funds
Increase efficiency and productivity of Structural Funds by making use of innovative
and revolving financing instruments in the urban sector (complementary to grant
financing)
 Leverage effect
Mobilise additional public and private sector resources for the benefit of sustainable
and integrated urban development (schemes)
 Expertise - new partnerships and synergies
Utilise financial, managerial and project implementation expertise from private sector
or international financial institutions such as EIB
European Investment Bank – JESSICA and Investment Funds 2

3. General JESSICA implementation model
EUROPEAN COMMISSION
Structural Funds
Grant (not repayable as long as EC Regulations adhered
to)
OTHER INVESTORS MEMBER STATE
(Public & Private) Via a designated Managing Authority
CITIES Holding Fund (HF)
optional
Contribution (repayable or non-repayable)
URBAN DEVELOPMENT FUND (UDF)
IFIs/Public
Agencies/
Investment (equity, loan or guarantee)
Banks
Projects forming part of an Integrated Plan for Sustainable Urban
Development
European Investment Bank – JESSICA and Investment Funds 3

4. State of play of existing JESSICA mandates
As of the end of 2011, EIB is managing 19 Holding Funds totaling EUR 1.75 bn of
Structural Fund commitments from Managing Authorities in 9 Member States.
1 Holding Fund was set up with a national financial institution (Estonia), investing in
2 Urban Developments Funds.
3 Urban Development Funds were established without Holding Fund
(Brandenburg/DE, East Midlands/UK and Wales/UK)
In total nearly 20 Urban Development Funds are already in operation, having a
primary investment focus on urban regeneration, as well as energy
efficiency and renewable energy investments in the urban environment.
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5. Reasons for JESSICA Study
• Limited amount of funds are available under the current grant based
renovation programme (Structural Fund grant allocation for multi apartment
block renovations are expected to be fully allocated towards the middle of
2012; ERDF funding for multi apartment block renovations is close to the 4%
limit imposed by the Structural Fund Regulations).
• Real need to renovate multi apartment buildings:
 the housing to be renovated only in Riga is 6,000 buildings with total
area of 12 million m2. Based on 2010 costs, it would require LVL 50 per
m2, which is approx. LVL 615 millions (Riga City Sustainable Energy
Action Plan for 2010-2020).
 average household energy consumption per residential area in 2009
was 285 kWh/m2, but average household energy consumption for
heating per residential area was 193 kWh/m2. These numbers are
higher than generally in Europe (Second energy efficiency action plan,
2011).
• Improvement of the energy efficiency of residential buildings is both a
Latvian and EU priority objective (Proposed EU Directive on energy
efficiency).
• Reduce energy bills for citizens, improved energy independence for the
country, and significant potential for job creation in the energy services and
construction sectors.
European Investment Bank – JESSICA and Investment Funds 5

6. Potential JESSICA loan product for Latvia
Establishment of a Pilot UDF , by selecting a financial intermediary, to provide
loans for energy efficiency in the housing sector at least until 2014.
Benefits of JESSICA loan product:
• Revolving fund – more efficient way of using scarce public sector grant
funding;
• Long repayment periods and low interest rates;
• Attract additional or complementary financing from financial institutions;
• No financial gap between current and next Structural Funds period;
• To assist transition from grant to loans, preferential terms and
complementary grant funded incentives could be included;
• Building companies familiar with financing issues;
• Energy service companies (ESCOs) could improve quality of energy
efficiency renovation works.
JESSICA loans product could be offered to:
• building managers for the benefit of apartment owners (building manager
association, co-operative society, limited liability company); or
• energy service companies (ESCOs) based on guaranteed/shared savings
model.
European Investment Bank – JESSICA and Investment Funds 6

7. Loan Product 1 - Building Managers
Parameter Description
Product Fixed interest loan and/or other preferential terms
Building manager, which is not an authorised entity, but acts for the benefit of the community of
Borrower
apartment owners
o Decision of the community of apartment owners
o Agreement with the building manager in an acceptable wording
o Energy efficiency measures project based on an energy audit report, prepared by an appropriate
Preconditions specialist and approved by competent state or municipal institution
o Multi-apartment residential building complying with certain criteria: the building divided into
apartments, non-residential area does not exceed 25% of the total area, one owner does not own more
than 20% of the total number of apartments
Payment frequency Monthly
- Public commercial pledge on the accounts receivables from the apartment owners to the building
management company;
Security
- In relation to building managers, which are not entities registered with the commercial register, a deposit
and assignment agreement
Prepayments No restrictions or added fees
Loan write-off To be discussed
oEnergy efficiency measures project reviewed by an energy auditor;
Implementation of the
oConstruction process supervised by a construction supervisor and field supervisor, both with
project professional civil liability insurance
Measures included in the project and approved by the energy audit report prepared by an appropriate
Measures eligible for specialist and measures included in the technical design or simplified renovation documentation that
financing ensures sustainability of those energy efficiency measures and approved by a competent state or
municipal institution
Self – financing Certain minimum down-payment could be required
European Investment Bank – JESSICA and Investment Funds 7

8. Loan Product 2 - Energy Service Companies (ESCOs)
Parameter Description
Product Fixed interest loan
Borrower ESCO
o Decision of the community of apartment owners to enter into EPC
o EPC between the building management company, ESCO and lending institution,
Preconditions
representative of apartment owners
o Energy efficiency measures project approved by a competent institution
Payment frequency Monthly
Public commercial pledge on the accounts receivables from the apartment owners to the
Security
building management company and on the assets of ESCO
Prepayments To be discussed
Re-financing To be discussed
Loan write-off None
o Energy efficiency measures project approved by an energy auditor;
Implementation of the
o Construction process supervised by a construction supervisor and field supervisor, both
project
with professional civil liability insurance
Measures included in the project and approved by the energy auditor and measures included
Measures eligible for
in the technical design or simplified renovation documentation that ensures sustainability of
financing
those energy efficiency measures and appropriate state and municipal institutions
Self – financing 10 – 20% of the loan amount
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9. Contact
JESSICA and Investment Funds
European Investment Bank
98-100 Bvd Konrad Adenauer, L-2950 Luxembourg
www.eib.org/jessica
Lina DRECHSEL
Holding Fund Officer,
Northern Unit
Tel: +352 43 79 82977
Mob: + 352 621 36 85 29
l.drechsel@eib.org
DISCLAIMER: The views expressed are purely those of the presenters and may
not fully coincide with an official position of the European Investment Bank
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