Objective of the fund
As energy demand in the Member States of the European Union continues to rise, mitigation of climate change by improving energy efficiency and renewable energy to reduce greenhouse gas emissions remains increasingly important. The growing energy demand of private households and the transport and service sectors is a driving force of CO2 emissions in the European Union economies that needs to be addressed. The EU countries have agreed on the 2030 climate and energy framework, including EU-wide targets and policy objectives for the period between 2020 and 2030. As part of the European Green Deal, the European Commission proposed in September 2020 to raise the 2030 greenhouse gas emission reduction target to at least 55%. These targets aim to help the EU achieve a more competitive, resource-efficient and sustainable system and to help Europe become the first climate-neutral continent by 2050 – an economy with net-zero greenhouse gas emissions – by increasing the use of renewable energy by at least 32% and improving energy efficiency by at least 32.5%.
The European Energy Efficiency Fund (eeef) therefore aims to support the climate goals of the European Union (EU 2030 framework for climate and energy and the climate-neutral objectives of the European Green Deal) to promote a sustainable energy environment and foster climate protection by enabling projects in European cities, regions and communities to build resilient infrastructure. The Fund’s objectives are:
Contribute to the mitigation of climate change and transitioning to resilient, energy-efficient and green infrastructure
The eeef contributes to enhancing energy efficiency and fostering renewable energy in the form of a targeted public–private partnership, primarily through the provision of dedicated financing via direct finance and partnering with financial institutions. The eeef facilitates sustainable investments in the public sector, where projects are often hindered or decelerated due to budget restrictions and lack of experience with this kind of investment. On the targeted impact level, the eeef invests at the city, region and community level in the EU Member States by financing technologies in energy efficiency, small-scale renewable energy and clean urban transport, with all projects to achieve annually a minimum of 30% primary energy savings or greenhouse gas savings compared to the baseline. The eeef may only invest when the project’s energy or carbon savings, among other investment criteria, are fulfilled. As part of the Fund’s due diligence and for the duration of each individual investment, the Fund periodically evaluates and monitors the carbon emissions and primary energy savings performance in alignment with the International Performance Monitoring and Verification Protocol (IPMVP), which requires every project to establish a baseline energy consumption and then conduct a post-project implementation assessment.
The Fund has also registered its partnership with the UN on the Sustainable Development Goals (SDGs) partnership platform. The fund has been contributing effectively to three of the 17 SDGs: Goal 7 – Ensure access to affordable, reliable, sustainable and modern energy for all; Goal 11 – Make cities and human settlements inclusive, safe, resilient and sustainable; and Goal 13 – Take urgent action to combat climate change and its impacts.
Achieve environmental and economic sustainability for the Fund
The eeef pursues its environmental goals by offering funding for energy efficiency and small-scale renewable energy projects. The Fund observes the principles of sustainability and viability, combining environmental considerations and market orientation. It does so by financing economically sound projects, allowing for a sustainable and revolving use of its means.
Build public–private partnerships for climate financing
By achieving the first two objectives, the eeef aims to attract additional capital into climate financing. The environmentally and socially responsible way of conducting its business, the innovative public–private partnership structure and the experience of its stakeholders will be used to bring more capital into an area whose financial means are currently insufficient to strongly contribute to the mitigation of climate change.