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(*) ‐ A large number of the Municipalities do not record, or often adopt rather arbitrary accounting systems of their O&M costs. 8
Spring 2010 –
‐ at that time, Things looked promising ‐ Some local banks claimed to be able to offer around 1% spread on EIB funding
‐We followed the directions of the EIB, preparing a tender to select an intermediary bank on the basis of the published EIB list.
‐The call envisaged the offer of a comprehensive spread for EIB funding, graduated for 4 levels of risk (however, above the fateful BBB rating), and a spread for any equity share borne by the ESCo.
October 2011: … I think that bankers are still laughing … We also thought it was a joke made by the EIB … Energy Efficiency ? … What is it?
‐ Cashed the shot, we down graded the ambitions, eliminating the supply of equity, since Banks complained complete lack of money and also remodelig the all inclusive spread.
April 2012 – after second shot, we started a long and tiring journey (one year), supevised and coordinated directly by the EIB offices in Rome and we finally found a bank willing to mediate the entire supply.
The position of the banks was always: Before you select the ESCOs, then we decide whether and how to finance them.
On May 2013 the EIB signed the contract with MedioCredito Italiano – part of Intesa 9
Sanpaolo Group
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1. The Eurostat decision (feb‐11‐2004) states that the assets can be accounted off‐
balance sheet, for the purposes of public deficit and the "Stability Pact", only if there is strong evidence that the private partner is bearing the majority of all the risks attached to the contract. Therefore the fee paid by the Administration to repay the investment of the private shall be not fixed , but vary according to the outcome of the contractually agreed performance.
2. Directive 18/2004 as transposed in the National Procurement Code
With hindsight we should have used the competitive dialogue, but at that time there was not enough experience on it.
3. First typically legal‐admin; the second more technic‐economic.
4. The standstill is a legal requirement which the Public Administration must comply with. It consistsin in 35 day pause between contract award decision and the formal award of the contract. It applies to all procurements covered by the full scope of the EU Procurement Directives. The period allows unsuccessful bidders to obtain more information on the award of the contract. Unsuccessful bidders can take appropriate action if they believe they have been treated unfairly.
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From early on in the process, financing needs to be an integral part of project development...
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1. The Italian association of major ESCOs (AGESI) claims to control 95% of italian
public market.
2. These Majors are able to offer very competitive contracts for the PA based on
deep monetary discounts (also 20%) + 20% of the contract value for making
interventions of regulatory compliance, maintenance, and ... energy efficiency.
Of this 20%, 10% is typically included in the annual fee and a further 10% extra
fee ... both without burdening the PA with long and complex tenders.
3. Loans are still largely bound to the classical counter‐guarantees (capital stock,
mortgages, sureties, etc..).
4. in banking terminology, there is not enough financial pulling, since there are not enough "track records" or series of consolidated cost / benefit of the EPC
5. Insurance guaranties for Energy Efficiency programmes do not exist in Italy. (Only Bank Sureties) This lowers the efficiency of risk allocation, reducing the attractiveness of some interventions that might be viable in a more fully developed market. 15
1. ‐‐‐
2. Munis Inadequacy. In fact, in recent decades there has been a loss of knowledge with the dissemination of all‐inclusive contracts
The improvement in Governance is met by:
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Perform Independent Baselines Identification and Assessment.
Implement and Maintain a Performance Monitoring & Verification
Protocols (ISO 50.001)
Because of the information/knowledge asymmetry between the Client and the ESCOs, it is important to initially support the Municipalities involved, in order to make sure that the Public Administration interests are safeguarded. 16
ERDF – European Regional Development Fund
FESR – Fondo Europeo di Sviluppo Regionale
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