Proposals should set up an innovative financing scheme leveraging private finance for investments in energy efficiency, potentially combined with renewables and energy storage.

The financing scheme should be established in at least 1 eligible country under the LIFE programme, in order to ensure the development of a sound and robust investment pipeline.

The financing scheme should be operational by the end of the project, with credible access to financing sources and a prospective pipeline of investments. The related investments may be implemented after project completion, but proposals are expected to pilot test the financing scheme during the project time.

The financing schemes can involve, for example, but are not limited to:

• equity and debt, potentially combined with non-reimbursable grants (“blending”), in particular for low income households or SMEs;
• local or regional investment funds blending public grants and private finance, e.g. in the form of loans;
• guarantees, risk-sharing, insurance or other de-risking instruments;
• energy services such as energy performance contracting, efficiency as a service, and variants thereof, if used to finance the investments;
• on-bill, on-tax and building-based financing, where the debt is attached to the energy meter or the building rather than the household or company;
• schemes complementing, with a dedicated financing component, already existing local and regional technical assistance facilities, in particular integrated home renovation services;
• schemes targeting the secondary market, including refinancing mechanisms, specialised securitisation vehicles and green bond schemes;
• local investment structures, including citizen financing (e.g. crowdfunding) for energy efficiency;
• market-based instruments relevant for sustainable energy (e.g. carbon finance instruments, energy efficiency obligations, etc.);
• brokering, aggregation or clearing houses, which facilitate matching of demand and supply of sustainable energy finance.

Proposals should take into account all the following elements:

• Establish an innovative, operational financing scheme supporting investments in energy efficiency, potentially combined with renewables and energy storage, in at least 1 eligible country. Proposals can build on and/or upscale innovative financing schemes successfully tested previously.
• Address the provision of finance as well as ensure the availability of demand in the form of a project pipeline complying with the requirements of the scheme, in particular at regional and national level.
• Define the targeted region(s) and sector(s) and justify how the proposed scheme is innovative and complements available funding schemes.
• Clearly demonstrate the business case and financial viability of the proposed scheme (including e.g. market analysis, investment sizes targeted, transaction and management costs, expected energy/cost savings and other returns, etc.).
• Plan replication and/or rollout of the scheme envisaged beyond the region(s) targeted for the establishment, including the analysis of legal and market conditions for replication.
• Demonstrate support of the targeted stakeholder groups and present in a detailed manner how they will be involved throughout the project.
• Demonstrate the additionality of the proposed financing scheme compared to market practices.
• Coordinate with and potentially participate in the national hubs of the European Energy Efficiency Financing Coalition, when relevant.