ALLIES – Activating and Learning from Local Investment in Energy Savings

Context

Among the large number of funding mechanisms, such as those offered by Germany’s Federal Office for Economic Affairs and Export Control (BAFA), very few are dedicated to energy efficiency. Companies often lack the incentive to save energy costs without limiting their investments. Barriers include a lack of awareness of energy efficiency issues, insufficient knowledge of state-of-the-art efficiency technology, staff shortages, time restrictions and high cash recovery requirements.

That is where the ALLIES project’s financing model comes in. One advantage of the financing model is that investments can be realised without affecting the balance sheet structure: neither equity nor borrowing is required, which means that there are no adverse consequences for credit ratings. The investment funds freed up can be used elsewhere and organisations can take advantage of saved energy costs from the outset. In addition, companies benefit from an improved image as energy- and climate-conscious organisations.

Project

At the core of the project’s approach was the involvement of citizens and local businesses at regional level as investors and facilitators of energy efficiency projects in companies and communities. The investments generate steady returns for reinvestment and provide citizens with tools that contribute to climate change mitigation and local economic and environmental sustainability.

The ALLIES concept combined three pillars with an explicit regional focus:

1. A.U.M. future funds model (national and regional funds that can be transferred to international levels)
2. Energy-saving contracting
3. Cooperatives as social enterprises and as a means of promoting regional development

The concept is based on the REEG model (Regional Energy Efficiency Cooperatives), which was developed by B.A.U.M. e.V. with the support of the German Government. There are over a thousand energy cooperatives in Germany operating renewable energy systems, but they rarely focus on energy savings. By applying the REEG concept, their scope of action can easily be extended to include energy efficiency.

The project applied experience gained in Germany to Poland and Hungary, where it found resources and financing structures suitable for the respective countries.

Results

• In all participating countries, project partners have created conditions for stimulating local investment in energy efficiency and set up an advisory and stakeholder network.
• The project has contributed to the understanding of financing models for energy efficiency measures and has also laid the foundations for successful financing It published a White Book presenting experiences of the project and providing helpful tips on financing energy-saving measures.
• The project partner in Hungary, reached a major milestone by establishing the first ‘Locally-rooted Financing Entity for Energy Efficiency’ (LFEEE) named Lokalizáció Ltd. Five projects have been prepared with a planned amount of investment of 221,000.00 € in total.
• In Germany (Allgäu region), a marketing cooperation with strong local partners for one-stop-shopping support services has been created and shall be implemented preferably in the framework of an existing institution (eza). In close cooperation with local banks a plan to setup a regional fund or dedicated deposit mechanism was developed. By currently implementing two projects with an investment of 185,500.00 €, the Allgäu partners are creating experiences regarding the necessity of external financing and the ongoing support for the implementation.