|Pilot Name||Sports Facility Management Institution|
|Client Type||Public Sector|
|Solution Type||Rating System|
The Sports Facility Management Institution manages and maintains the sports facilities of the City of Zagreb and was formed at the end of 2013 from the former Subsidiary Management of sports facilities, which was part of the Zagreb Holding.
It is composed of 3 business units – PJ SPORTS HALLS, PJ OUTDOOR FIELDS AND PJ POOLS. Institution manages almost 30 different sport facilities located in City of Zagreb. Yearly operating budget of institution (data from 2021) is just over 20 mil EUR of which around 3,6 mil EUR was the cost of energy consumption. With over 15% of share in total operating cost, cost of energy consumption has significant impact on operating expenses of the institution. With energy prices rising significantly in 2022 and with forecasts that this situation will go on trough 2023 and further, reducing overall costs of energy is essential in managing overall costs within the Institutions budget.
Institution is funded from City of Zagreb budget transfers and from revenues earned on market. Depending on years, around 20% of budget is funded by earned revenues while the rest is funded from City budget.
Following work done on EPC project in streetlighting in City of Zagreb, Sports Facility Management Institution has decided to develop its project of reconstruction of indoor and outdoor lighting systems in their sport facilities using EPC model. For that purpose, a draft of EPC contract, developed under streetlight EPC project of City of Zagreb was used.
Oppose to payment method and monitoring period used in streetlight EPC project, newly developed EPC contract for purpose of reconstruction of indoor and outdoor lighting system of sport facilities was structured so that monitoring and verification periods used to define energy savings are on yearly frequency. Due to this, a fixed payment in form of advanced payments is used for monthly payments to EES provider which are then recalculated on yearly basis. This method of calculating fee makes for biggest change in draft of EPC contract which should also have effect on risk score of project making it more suitable for refinancing then streetlight EPC project.
Rating system was used to rate the project and compare rating score to rating score of streetlight EPC project. Results are that risk score of projects contract clauses was 5 (low riks) oppose to risk score of streetlight EPC project contract clauses were risks score was 2 (high risk) due to one must have contract clause missing.
Project has been tendered just before the period of high inflation and raising of interest rates has begone and consequently, selected bid was favourable in respect to capital costs and financing costs. EES provider is not currently seeking for refinancing and will reconsider refinancing of the project after design and implementation stage of project are complete and when initial savings are verified.
Rating system used to calculate the risk specific project can be used to speed up the process of “due dilligance” of EES projects that are being considered for refinancing but they are quite specific for refinancing concept developed under REFINE. It is possible that EES project, that is in operating phase and is quite profitable for EES provider, can be rated as high risk for refinancing under this rating system. It would be useful to revise rating system in order to rate the success of ongoing project which should have effect on the overall risk score.
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