BORDEAUX METROPOLE ENERGIES II

The Framework Loan to the 'Société d'Économie Mixte' (mixed-economy company) Bordeaux Métropole Energies (BME) and its majority-owned subsidiaries will support energy efficiency renovations of residential buildings, renewable energies (especially photovoltaic) and district heating/cooling networks in the Bordeaux metropolitan area until 2028. This is the second operation with BME after project 'Bordeaux Métropole Energies' 2017-0896.

The aim is to contribute to the energy efficiency (EE) renovation of approximately 3,150 homes (370 individual housings and 2,780 apartments in condominiums). As a One-Stop Shop for EE renovations, BME will keep supporting - technically and financially - building owners in their renovations. Such activity is part of BME's role as third-party financing entity (Société de Tiers-Financement), following the French legal arrangements that allows non-banking entities to perform credit activities to individuals for EE renovations under clearly established conditions.

This Project supports the EU's and the EIB's priorities in the energy sector. It also contributes to the EIB's Climate Action objectives, through the implementation of Energy Efficiency ('EE') and Renewable Energy ('RE') sub-projects.

The implementation of the EE sub-projects financed under this Operation will contribute to the achievement of France's 2021-2030 National Energy Climate Plan, which envisages ambitious targets for carbon emissions' abatement. In doing so, it supports the EU's and national targets for EE and contributes to the security of energy supply and environmental objectives. This Operation is fully aligned with the EU Energy Performance of Building Directive ('EPBD'), the Energy Efficiency Directive ('EED'), the Renewable Energy Directive and with REPowerEU.

The Project addresses a number of market failures. Through energy savings, EE sub-projects reduce carbon emissions and air pollution, increase comfort and air quality in buildings, as well as social and public benefits that are not fully internalized by investors.

In addition, the development of RE will be fully integrated in the urban area, by installing small-scale photovoltaic (PV) panels on roofs or by developing RE heat sources for District Heating with a share of RE above 80%.

The Project will generate an excellent Economic Rate of Return (ERR) and has an excellent rated broader social benefit when integrating its extended building life. The Promoter has already a large experience in such sub-projects.

The Project also contributes to the development of the EU energy sector in accordance with EU priorities; in particular with the generation, supply or use of clean and sustainable renewable energies, the promotion of EE and the support for energy savings (with a focus on reducing demand through demand-side management and the refurbishment of buildings).

Finally, the EIB loan has features that other banks would not provide: an availability period of 4 years, a grace period of 3 years and a maturity of up to 20 years. The EIB loan will also help the Promoter/Borrower attracting public funds (including grants), homeowners' financing and commercial banks. In parallel, the Promoter/Borrower received an ELENA support itself and may implement PV and district heating projects from Bordeaux Métropole (its main shareholder) which are supported by ELENA.

This project will generate various environmental benefits such as the reduction of energy consumption, climate change mitigation and adaptation solutions. Each sub-project will be of limited size and it negative environmental impact will be limited considering its size, location and technical nature.

In most cases, EU Directives for Public Procurement are not applicable since the financed building works will be ordered and performed by private individuals (building owners of houses and apartments), being the project final beneficiaries. However, in the case of EE renovations and other activities related to public buildings as well as contracts between BME and artisans or other companies, EU Public Procurement rules will apply.