Energy efficiency plays a vital role in South Africa’s transition towards a green economy. In the face of sustained energy supply constraints it also plays an obvious and cost effective role in reducing demand. Private energy service companies (ESCOs) play an important role in identifying and delivering energy solutions, however these companies often lack access to affordable credit and are failing to scale.
We supported the development of a new guarantee and project preparation mechanism that would target the development of the ESCO market in South Africa, enabling more funds to be directed to energy efficiency in public building stock specifically. We tested commercial viability of the mechanisms, supported detailed design and identified opportunities to leverage much larger sources of finance. As a result, GIZ was able to clearly articulate how the Fund and Prep Facility would be structured and demonstrate how, if delivered, they would lead to increased investment in the sector. The fund is now in the process of being established.