Energy efficiency projects in industrial settings have attractive payback periods, but even with this, the upfront costs hold back many prospective industries from investing in energy efficiency equipment - this is especially so in the case of SMEs. While the ESCO model can be used to overcome the upfront cost challenge to a significant extent, ESCOs have had their own challenges in operations and economics when it comes to catering to the SME segment.
The other way to overcome the upfront cost challenge is if there are excellent, low-cost financing schemes available for the industrial user. If provided at an attractive interest and not too many qualification criteria, such financing schemes could make businesses for energy efficiency equipment - similar to the ESCO case, in the case of loans too they are paying almost out of their savings!
The news of BEE's plans to promote the financing of energy efficiency projects will thus come as a shot in the arm for all types of industrial energy efficiency projects in the country. The new plan centers around providing loans - presumably at attractive terms - to energy efficiency projects for all sizes of industries that have been graded by BEE.
Any type of reliable project benchmarking and measures has the potential to increase the confidence of all stakeholders - especially financial stakeholders - in that project. BEE's plans represent an excellent way to scale financing for energy efficiency projects countrywide.
