FRANFINANCE ENERGY EFFICIENCY PF4EE CA

Private Finance for Energy Efficiency (PF4EE) collateral agreement for energy efficiency projects promoted by Franfinance via leasing in France in conjunction with a framework loan operation 2021-0142.

The operation, a guarantee to Franfinance under the Private Finance for Energy Efficiency (PF4EE) programme, will support the installation of energy-efficient equipment and renewable energy generation capacity on business premises. The operation supports investments leading to energy savings, renewable energy generation and enabling infrastructure for electric vehicles, thus helping to achieve national and European targets for energy efficiency, renewable energy and low-emissions transport. It will deliver CO2 emission reductions, while also contributing to the security and diversification of energy supply in the EU. In addition, a significant share of the investment will be in cohesion regions, thus supporting their development.

The project provides a first loss guarantee to Franfinance for a portfolio of newly generated lease and loan financings under the Private Finance for Energy Efficiency (PF4EE) initiative supported by the EU. The operation aims to significantly stimulate the deployment of energy efficient equipment and renewable energy systems in tertiary buildings and premises in France by way of leasing and performance contracts for corporate clients. Energy efficiency offers an attractive ERR due to the reasonable investment payback, as well as good social benefits (ERR-FRR) since it will accelerate and catalyze the market. The project addresses negative climate and environmental externalities through the reduction of carbon and air pollution emissions. The promoter has the necessary financial capabilities and is working in partnership with leading technology manufacturers and suppliers, who will originate the investments, thus ensuring that the on-lending and energy targets are met. Overall, the operation will contribute to developing and expanding the national market for energy efficiency in tertiary buildings and premises, which faces significant barriers around fragmentation (e.g. SMEs) and access to finance of the final beneficiaries.

Through the PF4EE guarantee the promoter Franfinance will offer a new line of financing proposals with tenors and other conditions adjusted to Energy Efficiency equipment. Financing will be offered with longer maturities and on an unsecured basis, since the assets will in most cases be fully integrated in the building/equipment of the final beneficiaries. These financing solutions would not be offered to SMEs and other Final beneficiaries without the support of the PF4EE guarantee.

The project is aligned with EU and French national policy and regulation regarding environmental sustainability and more specifically with the Energy Efficiency Directive (2012/27/EU and as amended 2018/2002/EU), the Energy Performance of Buildings Directive (2010/31/EU and as amended 2018/844/EU), and the Renewable Energy Directive (2009/28/EC and as recast 2018/2001/EU). The Promoter will be required to adhere to any other environmental regulation affecting the operation such the Environmental Impact Assessment (EIA) Directive 2014/52/EU amending the EIA Directive 2011/92/EU.

The operation will target corporate clients in France as the final beneficiaries. Much of the procurement will take place under private sector conditions, however some public procurement may occur for public entity clients who will follow French and EU public procurement rules. Under these conditions, the procurement procedures to be followed by the Promoter are suitable for the project and satisfactory to the EIB.