How professional energy assessments help to grow Green Lending portfolios
Besides providing investment products, responsAbility offers technical assistance designed to support investee companies in their growth. To illustrate how this can work, Eva Tschannen, Head of Technical Assistance, explains how, in the area of green lending, financial institutions can benefit from external energy assessments financed through Technical Assistance to identify suitable green projects and to help scale a green lending portfolio. Who is the target audience for this type of technical assistance? In the area of green lending, we predominantly work with partner financial institutions who on-lend to their clients. Where partner banks have little experience of lending in this sector, we deploy consultants to guide them on-site. For our investees, our support to get their green lending programmes off the ground is key. What challenges are these partner institutions facing? The challenges include low awareness and understanding of the benefits and market potential of energy efficiency/renewable energy (EE/RE) both within their institutions and among end clients. Many times, banks also lack experience in identifying and evaluating the risk and return of EE/RE investment opportunities. This makes technical assistance vital to develop green lending in these markets. What is the purpose of energy assessments by external experts? On the one hand, they help partner banks to identify whether a suggested loan to one of their clients qualifies as “green” by our fund’s strict standards. On the other, they assist partner institutions in monitoring and reporting the energy savings and CO2 emission reductions of climate loans. How does this help banks to grow their green lending portfolios? Energy assessments help partner institutions identify eligible energy efficiency measures that can be suggested to end clients. This is how they serve to broaden the range of potential measures for increasing energy savings – growing the bank’s portfolio while contributing to the mitigation of climate change. Are Technical Assistance services available for all investee companies? We have Technical Assistance offerings relating to energy and agricultural projects and activities. The types of advisory support that can be provided vary greatly. Technical assistance is always tailored to our clients’ specific needs and defined in close cooperation with our investees, the responsAbility Technical Assistance team and our investment teams.
“By providing integrated funding and technical assistance, we aim to support partner institutions in developing their energy financing.”
Benefits for the bank:
Identify a catalogue of loan offerings that qualify for climate funding
Position your company as a green lending leader in your market
Provide technical assessments and suggest additional measures
Benefits for the bank's clients:
Develop a better understanding of current energy usage and costs
Identify potential for energy and costs savings through investments
Obtain free advice from an independent, qualified energy expert
Learn about additional ways to reduce energy costs
To find out more about energy assessments and other advisory services offered through responsAbility-managed Technical Assistance facilities, contact Eva and her team at: technical_assistance@gcpf.lu.
1, 2 World Bank 3 responsability Investments AG, Micro- and SME-Finance Market Outlook 2017