Sustainable Energy Finance

Challenges

Economies in emerging markets increasingly need to implement energy efficiency (EE) measures in the face of rising energy prices and potential energy shortages. Outdated generation facilities need to be upgraded in order to avoid energy losses and ensure an ongoing energy supply despite increasing demand. Meanwhile, end users still deploy outdated equipment and technologies, leading to further energy waste and CO2 emissions. Experience shows that investment in EE is the most advantageous way of saving energy. Such investments have short payback periods, attractive return rates, and debt service can often be covered by energy cost savings. Given increasing energy prices worldwide, companies that recognize the importance of energy efficiency today will have a competitive advantage tomorrow.

The recent global economic slowdown has had a continuous and direct negative impact on investments, causing banks to be reluctant to finance EE and renewable energy (RE) projects. Further obstacles preventing such projects from being financed include legislative and regulatory frameworks, particularly for RE development, a lack of economic incentives due to artificially low energy tariffs, limited local capacities to prepare project proposals, and companies’ lack of awareness of the benefits of implementing EE measures. Often, companies are simply not aware of the benefits extending from EE measures, or lack the corporate capacity needed to prepare project proposals. Many companies shy away from initial investment costs and remain unaware of the long-term commercial benefits. Moreover, many banks are unfamiliar with EE/RE financing, and perceive EE/RE lending to be a risk rather than a means of diversifying their portfolio. 

 
GFA Concept and Services

GFA’s Financial Systems Development department supports local partner financial institutions in the launching and marketing of EE/RE facilities and assists in the development of EE/RE lending as a sustainable banking business.

Our EE/RE experts offer field-proven concepts, ensuring the application of best practices in EE/RE finance. 




Marketing   GFA ensures a timely launch of the facility and prepares a marketing concept with partner financial institutions. This includes a well-designed, user-friendly facility website, media work and promotional materials such as brochures, leaflets and case studies. We also offer portfolio screening support to identify potential sub-borrowers in the existing client database, organize public events dedicated to industrial modernization and EE to attract new clients, and stakeholder relationship management.

Project identification and portfolio development   GFA supports companies in the identification of energy losses, conduction of EE assessments, and identification of technical solutions. Our experts assist in the search for suppliers, in technical and financial project assessment, and in the preparation of bankable project proposals, both independently and in cooperation with consortium partners. 

Capacity Building   GFA offers and organizes training and skill transfers to relevant stakeholders. Standardized training modules for bank officers incorporate sales techniques, portfolio screening, project appraisal, and risk analysis. Technical staff is trained in energy audit and project management.

Project Management   GFA mobilizes highly qualified expert teams matched to each project’s specific needs. GFA consultants closely monitor and coordinate project activities and implement knowledge transfers from similar programs, reflecting the key to the company’s approach to EE/RE financing.