Investment

Investment Funds for Building Retrofits

Investment Funds for Building Retrofits

A framework for an investment fund for building retrofits projects, which seeks to accelerate building efficiency and retrofit investments in Europe.

The challenge: increasing retrofit activities

In the scope of reducing carbon emissions in Europe, building retrofits have been identified as a major factor of improvement. Current renovation rates are low, due to several barriers, in particular:

  • Lack of standardized information
  • Long payback periods
  • High transaction costs
  • Inadequate access to financing
  • Uncertainty of savings

Although green real estate funds are emerging, currently none of them consider retrofit projects.

In order to bridge the gap and address barriers, documentation and measurement of projects must be standardized, and a monitoring, reporting & verification (MRV) framework must be established to allow bundling of small investment units. Furthermore, the landscape of investments in retrofit projects has to be mapped, to identify the conditions under which institutional investors and asset managers would invest in such a fund.

 

A retrofit investment fund

This project seeks to bridge the gap between the existing supply-side mechanisms of building retrofit projects and demand-side market needs from investors by designing a framework for an investment fund. The framework shall be based on standardized protocols and aggregation approaches with high potential for scale up, and based on the framework designed, a concrete fund for building retrofits will be established.

The design of the initial concept and strategy for an investment fund includes covering the supply-side of the project analyses (for core partner cities). This ensures the availability of building retrofit projects and benchmarks existing frameworks used by most building owners for the development, documentation, and measurement of building retrofit projects.

Standardization on documentation and measurement is key to help investors to meet the ticket size and reduce uncertainty and risk perception. Evaluating and deciding on the most suitable measurement, reporting and verification (MRV) framework will contribute to simplifying the estimation and ex-post measurement of energy efficiency projects. This ultimately allows the bundling of small investment units (e.g. individual buildings), and addresses the lack of standardization, which continues to be a key barrier for energy efficiency investments.

A project pipeline will then be established in cooperation with interested cities, taking into consideration investor interest and preferred investment conditions.

Interested inInvestment Funds for Building Retrofits?

We’re welcoming:

  • Cities
  • Investors
    • Commercial and development banks
    • Asset and fund managers
    • Institutional investors
  • Project developers

 

Consortium

The project is led by South Pole and implemented jointly with the City of Zurich.

Project lead

Denis Jorisch is a Consultant at South Pole since early 2015 and working on topics at the intersection of finance, cities and climate change. Denis has been managing several Climate-KIC projects and he is furthermore actively engaged in assisting in the strategy development of the LoCaL programme until 2020. Prior to joining South Pole, Denis was engaged in the Swiss Climate Foundation where he was responsible for the controlling, reporting and due diligence of energy efficiency and innovation projects in Switzerland. He holds a Master of Science in Atmospheric and Climate Sciences from ETH

People

Denis Jorisch is a Consultant at South Pole Group since early 2015 and has a background in atmospheric and climate science. He is currently focusing on new monitoring approaches in the transport sector on city level as well as energy efficiency projects in the building sector

Denis Jorisch

Consultant