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Pilot Details
Pilot Name Refinancing of a Building in Latvia
Client Type N/A
Country Latvia
Solution Type
  • Refinancing instruments
  • Rating System
  • Contract stipulations
  • Facilitation services

The only refinancer in Latvia, Latvian Building Energy Efficiency Facility (LABEEF), represented by its management company – Funding for Future B.V., was part of this pilot as well as an ESCO currently active in Latvia from which the building would be refinanced.


During the pilot process, all involved parties explored how to structure a deal of refinancing for a building renovation project, which involved different kinds of facilitation services, applying the rating system, and examining the contracts.

The whole financing ecosystem has to be improved by introducing new financial instruments that support the refinancing process or compliment the existing ones. Moreover, the introduction of WC loans and WC guarantees can play a significant role across the project partner countries to foster refinancing models/ schemes. While in Latvia, the market might be too small to introduce such tools at this moment due to lack of potential uses, which most likely will be the case until growth-supporting mechanisms are introduced for the EES market.

This pilot also proved that refinancing institutions can emerge and expand their activities in the developed energy efficiency markets where at least several EES providers are presented and actively delivering projects to the building owners.

Refinancing should be considered as a part of the comprehensive process of financing the deep renovation of residential/public buildings. It has a significant role; however, without having a full range of complementary financial instruments available in the market, it can’t solve alone all the issues. The renovation market requires not only demand from building owners but also experienced and qualified service providers. In addition, the payback of the deep renovation projects is more than 15 years. Thus, to stimulate the EES providers’ growth, appropriate financial instruments have to be in place, e.g., seed or equity funds for developing EES providers; WC loans for financing the project development; guarantees for performance and client payment risk; and finally, refinancing institutions capable to uptake the market needs by refinancing the projects.

We see fragmented initiatives to develop the EES providers’ market. They mainly address the industrial sector and SMEs’ needs, while in the building sector; nevertheless, the current EU-funded state support program for the deep renovation of residential buildings is compatible with the ESCO model, there is no support for the development of the ESCO market itself which results in having only a few ESCOs interested in deep building renovation projects.

Refinancers should already have investment-ready capital before an EES project is found to ensure a fast refinancing process and satisfied clients – EES provider. While during the pilot process, it can be concluded that in cases where such an option is not possible, facilitation services are needed and should be comprised of leveraging capital for each project.

For more information, please contact:

Funding for Future B.V.