A loan for an energy project, such as insulating the walls of a small business or improving a company’s heating system, can require a lot of work and expense for a lending bank. The loan appraisal needed to verify a project’s design and energy savings can take a lot of time and make the transaction costs high for banks and their clients.
To speed up the loan process and make it less complicated, the European Investment Bank developed a new tool, the Energy Efficiency Quick Estimator, or EEQuest. This tool estimates the savings potential for about 20 typical energy efficiency projects, such as replacing a boiler or adding LED lights and solar panels. Clients enter basic technical data, such as the project’s location and whether solar panels will be integrated into a new building or added to an old building, and the tool estimates energy savings, cost savings and carbon emission reductions.
More lending in energy efficiency
The EEQuest tool was developed under the EU bank’s Private Finance for Energy Efficiency programme. This programme, supported by the European Commission, offers loans and credit-risk protection to partner banks to encourage energy efficiency lending.
One of these partner banks, Spain’s Banco Santander, launched a loan product earlier this year to increase its energy efficiency lending. To help this product succeed, the European Investment Bank loaned €50 million to Santander as well as giving credit-risk protection. Santander will use this money to make small loans for a wide range of energy efficiency projects. To simplify the loan application under this new product, Santander is using a customised version of the EIB’s new EEQuest tool.