tHE POTENTIAL OF REFINANCING SCHEMES IN THE eUROPEAN EES MARKET
sUMMARY OF REFINE MARKET SURVEY
October 20th 2022
In the course of identifying and developing pilot applications for refinancing of EES, financial institutions expressed their interest to learn more about the market potential related to the acquisition of receivables from ongoing and/or future EES projects across Europe. Actually, it is clear that refinancing may support EES providers in overcoming financial bottlenecks and to gain leeway for the expansion of their business more easily. However, there a no market data available that provide information of the current and expected future size of this business approach across Europe.
Therefore, the REFINE-team decided to implement a market survey that addressed EES providers exclusively (ESCOs) and asked for more information about their (potential) interest in selling receivables from ongoing or future EES projects. The sample contains 48 observations from 10 countries. As figure 1 shows, the main financing instruments applied by the surveyed EES providers is credit financing and grants/subsidies. However, also sale of receivables and equity is used quite commonly as financing instrument. The survey also shows that among the surveyed EES providers the interest in sales of receivables is high (see figure 2).
Figure 1 Financing instruments used by responding EES providers
Participants that were interested in sales of receivables as a financing instrument are to a large extend SMEs (see Table 1). Furthermore, as Table 2 indicates some of the Italian participants guess that the average yearly volume of receivables that can be sold from future EES projects (with a perspective over the next 5 years) are higher than 1 million € up to higher than 4 million €. Similarly, also the Spanish participating EES providers estimate the average yearly volume of receivables that could be sold by them above 1 million € and higher.
To summarize, the following findings can be concluded from our EES market survey on refinancing schemes:
- For many EES providers credit financing is the most used financing instrument for EES providers. However, also refinancing approaches are commonly used among some participating EES providers (see figure 1).
- A clear majority of all participants is (generally) interested in financing current or future EES projects by sales of receivables (see figure 2).
- Participants that were interested in sales of receivables as a financing instrument are to a large extend SMEs (see table 2).
- Especially the participants from the Italian and Spanish market estimate the average yearly volume of receivables that can be sold by them from future EES projects above 1million € up to over 4 million € (see table 1).
Figure 2 General interest in sales of receivables reported by responding EES providers
Table 1 Estimated average yearly volume of receivables that can be sold from future EES projects
Table 2 The interest of SMEs and Non-SMEs in refinancing schemes
Read the full market survey summary here.
Author: Klemens Leutgöb, e7 energy innovation & engineering