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EEFIG Underwriting Toolkit

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EEFIG Underwriting Toolkit: Value and Risk Appraisal for Energy Efficiency Financing

 

The EEFIG Underwriting Toolkit is designed to assist financial institutions to scale up their deployment of capital into energy efficiency. The objectives of this Toolkit are:

 

  • to help originators, analysts and risk departments within financial institutions better understand the nature of energy efficiency investments and therefore better evaluate both their value and the risks;
  • to provide a common framework for evaluating energy efficiency investments and analysing the risks that will allow training and capacity building around standardised processes and understanding;
  • to help developers and owners seeking to attract external capital to energy efficiency projects to develop projects in a way that better addresses the needs of financial institutions.
  • to foster a common language between project developers, project owners and financial institutions.

Although the focus is on value and risk appraisal, additional material on the size of the potential market, methods of financing and the project life cycle have been included to give a fuller picture and help build capacity within financial institutions.

 

The EEFIG Toolkit addresses several audiences involved in the provision of energy efficiency financing including:

 

  1. Senior Management and decision makers
  2. Origination teams and project developers
  3. Project developers and risk teams
  4. Risk teams, project developers and originators

The Toolkit also includes an on-line Resources section which can be used to access more detailed information on specific topics. This Resources section is a “living document” which can be expanded as the energy efficiency financing market develops.

 

The project life cycle and value and risk appraisal approach described within the Toolkit apply equally to private providers and to public bodies deploying capital into energy efficiency – even if capital is being deployed at below market rates or in the form of grants – and therefore the Toolkit should also be of assistance to those developing publicly supported energy efficiency programmes. In addition, the Toolkit aims to assist project developers and project hosts to develop projects that are more in line with the requirements of financial institutions.

 

Furthermore, the Toolkit could also be useful to Chief Financial Officers and financial teams within corporates who are looking at funding energy efficiency projects using corporate balance sheet funds. In considering proposed energy efficiency investments corporate financial decision makers often face many of the same issues as providers of external finance, including a lack of confidence in the projected results and a lack of capacity to properly evaluate investment projects.