Energy Efficiency: NDF experience The Nordic Development Fund: A financing institution supporting Climate Change projects in low- and middle-income countries Energy Efficiency: NDF experience

Does not taste as good as it looks? - EE is not as appetizing for the company as it seems for the external expert. - The potential for EE is described as huge in most countries - Advice is given that shows on short payback times and considerable savings STILL - - Experience shows that it is not as easy to get companies to invest in EE as expected - Resistance to take on loans and implement suggested measures

Low hanging fruits are most often picked The easy and obvious measures are implemented, but then it starts to get difficult Many SME programs directed at both manufacturing and offices can report success in the some types of measures like lighting, cooling, isolation. In medium large processes recovery of heat – or cool – present common improvements. Air pressure systems may be changed. Process components or boilers are harder to replace. Secondary heat is often wasted, even though valuable for many processes

Why does our cat not go for the bait? Fewer than expected loans are applied for Competition: credit cards are used Unwillingness to deal with banks – traditional mistrust Unattractive conditions Security difficulties Unwillingness to limit other lending possibilities Reluctance to let others own the investment inside your productive chain

Why the reluctance to make a guaranteed profit? Fewer than expected measures are implemented A saving is limited – a potential limitless Preference to invest in the production chain Reluctance to disturb the production chain Lack of focus on energy savings: partly due to different view of aspects

A free lunch is always welcome – but only snacks should be given away Private sector companies should not be offered services for free. Most companies accept a free assessment but few are willing to pay Lack of payment means resources are wasted on non-committed companies

Know your client The financial offer must be assessed with the Clients' eyes EE is not a box: We need to develop tailor-made products Only light/rapid assessments should be offerered for free

Offering a car ride but charging sky-high for the petrol will bring the client nowhere Companies must be offered attractive and affordable terms. Society must see EE financing as a common good First loss guarantees can improve terms and ease resistance to take on debt EE loans should not limit other financing EE loans could be amortized as the investment is paid back EE loans should have strict requirements on energy efficiency in absolute and relative terms