Energy saving and performance contracting (ESPC) is a type of financing for capital improvement in order to fund energy upgrades from the resultant cost reductions. In ESPC, an external Energy Saving Company (ESCO) implements a project to deliver energy efficiency and repay the costs of the project, which also includes the costs of the investment. In some cases, the ESCO implements a renewable energy project and the revenue from the cost savings is used to reimburse the cost of the project. Unless the project delivers energy savings as predicted, the ESCO does not receive its compensation. Oil & gas restructuring is anticipated to drive market Restructuring and liberalization of electricity and gas markets is expected to be the major driver for the energy saving and performance contracting market. The measures undertaken by private and public sector industries to mitigate climate change is another driver for the market. Lack of information related to energy efficiency and understanding of opportunities it offers is a restraint to the market. Lack of commercially sustainable and viable project financing within the banking sector due to their limited experience also restraints the market.
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