Backed by €1.92 million of Horizon 2020 funding, the Investor Confidence Project (ICP) Europe released its first draft protocols on 14 September 2015 and is inviting comment prior to the final version in October. The protocols are the first component of the ICP System which standardises how energy efficiency projects are developed and measured.
Building owners, project developers, finance and energy service providers, insurers, local authorities and utilities all stand to gain from the ICP system, which is aimed at unlocking access to financing for the building renovation market.
Originated by the Environmental Defense Fund, ICP is already attracting big name investors in the banking world. The Energy Efficiency Financial Institutions Group (EEFIG), a group including Deutsche Bank, ING, Allianz and BNP Paribas, has cited investor confidence as the top priority for transforming the energy efficiency market and highlighted the work of ICP as a model that Europe needs to follow to unlock investment.
Until now, limited actuarial-quality project data and industry fragmentation have discouraged investors from putting their cash into energy efficiency. To remedy this, ICP Europe is forging strategic alliances with the financial and efficiency sectors to develop project development and underwriting standardisation through its Energy Performance Protocols and embed the protocols into their partners financing processes for renovation projects.
By streamlining transactions and increasing the reliability of projected energy savings, ICP Europe intends to build a marketplace for standardised energy efficiency projects. The individual projects can then be aggregated and traded by institutional investors on secondary markets – just like mortgages or other asset-backed securities.
Dr Steven Fawkes is a Senior Advisor for the project and a member of the Investment Committee of the London Energy Efficiency Fund with 30 years’ experience of energy efficiency, including founding two energy service companies. “Governments and NGOs have for years been talking about how energy-efficiency is the low hanging fruit, which can bring a healthy return on investment,” says Steven. “But, despite the actions of a few market leaders, investing in it is not as easy as it’s made out to be, otherwise everybody would be doing it. We want to change that. We want to make it become a standardised product and then an indispensable part of every institutional investor’s portfolio.”
Until 2 October, ICP Europe is looking for feedback on the first draft protocols. Stakeholders are invited to contribute through the Technical Forum and to participate in unlocking the potential of energy efficiency as a global asset class by joining the ICP Europe Ally Network. https://europe.eeperformance.org/