Risk management

Berliner Energieagentur GmbH Risks of EPC Equipment transfered into the property of building owner at the moment of installation and/or hand-over Ownership by contractor for the total investment into ESC schemes economic risk by contractor; guarantee of performance, technical condition & availability technical risk by building owner; rising prices => protection of contractor decreasing prices => benefit for building owner energy price risk by building owner; change of use => modification of guaranteed savings risk of use

Berliner Energieagentur GmbH Risk Management Instruments Careful analysis of the savings potential Good, complete data basis Complete and meaningful tender documents with clear and detailled specifications of services required Careful selection of the service provider Integration of additional external know-how where needed Use of standard documents, e.g. model contract and checklists Well balanced contract

Berliner Energieagentur GmbH by building owner; change of use => modification of guaranteed savings risk of use Risk of use is a risk that cannot be influenced by the contractor. This risk is born by the building owner/client only. Good contracts foresee procedures for cases like this. It can be done via a baseline adaptation in case of changes in use; the calculation basis for such cases should be available.

Berliner Energieagentur GmbH by building owner; energy price risk Risk of changing energy prices are to be born by the client/ building owner in any case, with or without a contracting project. Rising prices => protection of contractor Decreasing prices => benefit for building owner For the sake of calculating the proper savings, the baseline is calculated with fixed reference prices of the base year.

Berliner Energieagentur GmbH Technical Risks exist with regard to the adequacy and design, construction, operability and availability during operation, as well as maintenance periods of the technical equipment. The contractor fully bears this risk The Economic Risk is related to the need that the invested capital depreciates in the course of a project. In the case of EPC the contractor bears this risk that the capital depreciates through the achieved savings. by contractor for the total investment into ESC schemes economic risk by contractor; guarantee of performance, technical condition & availability technical risk

Berliner Energieagentur GmbH Under German law, the ownership of equipment installed passes to the building owner when the equipment is installed and accepted. There are parts that can also pass into the ownership at the end of a contract Ownership with Building Owner: Security in case of problems on side of ESCO (worst case: bankruptcy) Ownership with ESCO: Asset Security for credits  Tax or credit issues can have both negative and positive factors for both sides Equipment transfered into the property of building owner at the moment of installation and/or hand-over Ownership