Financing Options

The Institute for Industrial Productivity works to adapt lending practices to the needs of energy efficiency projects. IIP partners with industries, banks, Energy Service Companies (ESCOs), and regulators to pilot innovative programs, undertake demonstration projects, and document case studies for wider dissemination.

Government regulations and incentives can encourage the introduction of energy efficiency in industry, but industry needs private financing in order to actually undertake the investments required for low carbon manufacturing.

Industry is failing to make many profitable and feasible investments in energy efficiency because of perceived risk, project size, and because of the way energy efficiency investments are treated both within companies and by financial institutions.

The challenge is to ensure that industrial and financial decision-makers have adequate, accurate, and timely technical and financial information as they consider energy efficiency investments.

Sharing best practices in Industrial Energy Efficiency Financing

IIP’s Finance Program identifies, develops, pilots, and shares best practice in financial options, platforms, and products to facilitate investment decisions for various energy efficiency technologies and help leverage private finance.

IIP provides refined information on financing options for energy efficiency investment, such as risk-sharing guarantees and energy performance contracting.

IIP works with banking authorities, local and international financial institutions, technical experts in the public and private sectors, and industry associations to develop innovative financial approaches.  

Our Best Practices in Industrial Energy Efficiency Finance and our Industrial Efficiency Finance Database (currently in development) offers practitioners from government, finance, and industry best practice case studies and useful information from around the world on financing industrial energy efficiency.

Projects

In China, IIP is working with a major bank to develop a standardized verification approach that allows it to evaluate the financial feasibility of energy service company (ESCO) proposals. 

In India, IIP is working with a bank to integrate energy efficiency assessments into all of its loan evaluations. 

In the United States, IIP is working with chief financial officers to make the business case for replacing coal-fired boilers with efficient combined heat and power systems to comply with environmental requirements.