Scroll Top

Pilot Details
Pilot Name Refinancing business model in Latvia
Client Type LABEEF
Country Latvia
Solution Type
  • Refinancing instruments
  • Contract stipulations


During this pilot process, LABEEF explored its options for how to continue to offer its services in Latvia. In the pilot process’s scope, REFINE contract stipulations were explored and evaluated for integration under the LABEEF model.

Refinancing could play a significant role in fostering the market for renovating public buildings in Latvia. Although the public sector would have to lead by a good example and inspire the development of the rest of the market, unfortunately, we cannot see such a pattern. There are several reasons for that, starting from the state budget and debt issues to the limited capacity of the local governments to implement comprehensive renovation projects with guaranteed savings. Even though Latvia, similarly to Slovakia, has adopted Maastricht-neutral public Energy Efficiency performance contract, the public sector doesn’t have any supporting tools or guidelines for implementing such contracts and projects, including the organisation of procurements.

This pilot also presented that attracting institutional investors or financiers for providing capital or financing to a refinancing institution (in LV’s case, the EBRD) can strengthen its position and facilitate dialogue with local commercial or development banks, as the ability of a refinancing institution to attract this type of investor or financier is seen as a certain guarantee of quality and credibility.

On the one hand, given the increasing demands on commercial banks for sustainable financing and greening of loan portfolios, one might think that this would encourage commercial banks to support the creation and existence of refinancing institutions. On the other hand, in practice, we see a very cautious attitude towards this type of business model and a lack of understanding of the opportunities, and added value of refinancing for commercial banks.

Observations from discussions with the stakeholders show that the EES providers are perceived more as project financiers and risk takers, but at the same time, the value of the long-term energy efficiency guarantee provided by the EES provider for a project is not fully understood and appreciated. It is perceived as a nice bonus rather than as an instrument that can significantly influence the quality of a renovation project, especially in the longer term. In discussions, loan officers expressed concerns of losing lucrative business without seeing the size of the potential demand.

In underdeveloped EES markets, it is of paramount importance whether there is support at a political level for the efforts to build the ESCO market infrastructure and introduce new financing models/ methods.

For more information, please contact:

Funding for Future B.V.