Despite – or perhaps because of – the acute economic recession in Ireland, the Irish government has earmarked USD 45 million in seed capital for a new energy efficiency fund to help reduce the cash-strapped nation’s energy consumption by 20%.
On 28 February 2013, Irish Energy Minister, Pat Rabbitte formally announced a €70m Energy Efficiency Fund (EEF) that he says will “dramatically improve energy efficiency savings in public and commercial buildings right across the country.” Minister Rabitte added, ‘“We see a significant win in terms of jobs and energy savings by placing an increased focus on energy saving in the public and commercial sectors. We want to trigger large investments through this fund.”
Projections are that the EEF will deliver up to 675 jobs, direct and indirect, for every €10 million expenditure.
The €70m Energy Efficiency Fund is created using matching private sector investment to a minimum Fund value of €70m (with €35m from the Government). There is a “good degree of interest from the market” according to a government source, including from ESCOs and investment fund managers. It is intended to commence lending in 2013.
The Energy Efficiency Fund will be available to both the public and private sectors, and will be available to fund projects outside the Energy Performance Contracting (EPC) model. However it is expected that EPC structures will form a significant component of the fund’s activities.
An ESCO or host can potentially borrow up to 100% of the funding required to invest in the project. The percentage of project funding will vary depending on the credit risk and circumstances of the ESCO and the host organisation. The loan payback period can range from 3 to 15-20 years.
Dr. Motherway, CEO of the SEAI remarked “Energy efficiency is all about stopping sending money abroad to import energy, and spending it instead on technology and labour in the local economy. It creates jobs, keeps business competitive, and brings social and environmental benefits. The new energy efficiency fund is a great opportunity.”
The Fund is a cornerstone of Ireland’s second National Energy Efficiency Action Plan. The National Energy Efficiency Action Plan (NEEAP) outlines how Ireland will deliver the national 2020 energy saving target. A key focus of the second Action Plan is for the public sector to act as an exemplar in how it uses and procures energy.
Commenting on NEEAP, Minister Rabbitte said “The potential impact of energy efficiency on the Irish economy cannot be overstated. The NEEAP represents a huge opportunity to reduce energy bills for consumers, businesses and the public sector. When we deliver the 20% energy saving target in 2020 we will have taken a €2.4 billion energy burden out of the economy – the benefit of which will be felt throughout the length and breadth of the country. However, energy suppliers must play their part in this and some more than others need to intensify their efforts to offer a much wider range of affordable energy services to their customers.”