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On the basis of a 10% junior guarantee, the capped guarantee for +€100bn projects would amount to
€10bn. Given that the intrinsically low level of risk being guaranteed consists mainly in default risk of
governments and of local authorities, risk weighted assets (RWA) calculations should imply very low
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level of equity.

III. The proposal of a quality investment program for an EU economic recovery plan

A strong commitment from European and national public authorities

The program requires a strong mobilisation of public authorities in the EU and Member States. Their
commitment is essential to improve public project management capacity, pool operations, promote
economies of scale, standardise projects, and ultimately to significantly increase the volume of
operations. “Governments should build public sector institutional capability in project development
and implementation, and foster greater knowledge sharing and transparency across levels of
government, jurisdictions, the private sector and
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other stakeholders.” In addition, energy savings performance commitments will provide for reliable
and
demanding public policy assessments.

The program should be widely publicised to make it easier for local elected representatives to
politically promote their energy efficiency projects.

IV. EU NEXT STEPS

The program now requires a strong mobilisation of all stakeholders, especially from European
and MS public authorities.

1. European Union
 Public buildings selected as a quality investment program for the EU
 Creation of a dedicated task-force by the Commission ; technical assistance programs to MS
 Creation of a European knowledge-sharing platform: observatory network on energy
expenses, renovations, EPCs, costs/savings, RFPs, energy-efficiency techniques, etc.
 Fine-tuning of the Eurostat methodology to enable an accurate treatment of PPP-EPCs
 Specific business plan and creation of the program : bylaws, analysis of existing national state-
guarantee mechanisms, potential shareholders, governance, team, regulator approval, etc.
 EIB intervention and balance sheet optimisation: loans, equity, expertise, etc.
 Calibration and assessment of the intrinsic level of risk in operations: National Central Banks & ECB

2. National public authorities
 National public building guidance and appraisal strategy. strengthening of public project
development capacity
 Massive pipeline of projects selected and budgeted by national and local authorities,
based on consumption track-records
 Projects implementation (PPP tenders) ; and evaluation and audit of projects (especially in EPCs)

3. Industry players, SMEs, banks and institutional investors
 Ramp-up of operations, productivity gains and development of a European industry
 Securitisation Funds bringing together energy efficiency medium-sized projects for investors

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without taking into account the capped guarantee mechanism ; nor the State/local authorities buildings shares ; a [2%-20%]
RWA on 8% for €100€ of guaranteed risks would give a [€0.16bn - €1.6bn] target. €400m of capital should be an accurate
estimate.
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G20. A set of Leading Practices on Promoting and Prioritising Quality Investment. September 2014.