|Assistance in the development of a new business model for several ESCOs
The Spanish ESCOs that have been involved in this process have many similarities in terms of their business characteristics, the barriers they face and the projects they develop. In general, they are SMEs, with a strong technical background and the capacity to explore new opportunities if they find reliable financial partners. The most common type of projects found is the construction of self-consumption PV systems.
Throughout the pilot process, support has been provided to individual ESCOs to analyse their financing models and assist them in their transformation towards more efficient and sustainable models through refinancing.
To this end, the types of projects offered, the financing structures implemented, the target customers and the long-term objectives of each company were analysed.
Solutions and advice offered have focused on introducing or modifying contractual stipulations to facilitate project refinancing, identifying facilitation services that can streamline project refinancing, and the analysis through the rating system tool to assess the “refinanceability” of a real ESCO projects.
The strategies proposed have been different for each company tested, but the conclusions and impressions about the main barriers encountered largely coincide.
Some ESCO projects that were presented as “energy services” were not correctly identified, these were turnkey projects where the client receives financing from a third party to pay for the intervention in instalments. There is therefore a lack of knowledge of the basic terminology that needs to be covered by training in order to be able to mainstream this type of operation.
The main barrier for most of them is to find a financial partner they can trust and that can provide them with enough flexibility to easily undertake projects without burdening their balance sheet.
There are large differences in the possibilities of access to finance between different types of projects. Projects based on energy generation (Self-consumption PV + PPA) are far more attractive to FIs than projects where the cash-flow comes from energy savings (EPC)
ESCOs are looking for reliable, stable and flexible financial partners, whether for refinancing or financing. This is currently a challenge due to the limited knowledge of the sector by traditional FIs and the limited flexibility they offer.
For more information, please contact:
Creara Energy Experts