Private Finance for Energy Efficiency will Support European Commitment to COP 21

European stakeholders to propose concrete solutions to enhance energy efficiency in the European Union

Today European stakeholders are gathering in Rome to confirm their commitment to the COP 21 Paris Agreement. The Energy efficient Mortgages Action Plan (EeMAP) Initiative is being presented at a Kick-Off Stakeholder Meeting with over 100 participants and panellists, representing a cross sector of key market players such as European and international investors, issuers, lenders, property valuers, academics, energy suppliers, buildings experts and SMEs.

Together with the European Parliament, the European Commission and local authorities, these market participants will discuss the potential to channel private capital into energy efficiency investments, supporting EU property owners in the renovation of their residential and commercial properties and helping the EU institutions to bridge the investment gap to deliver on its energy savings targets. The designing of common best practices for energy efficient mortgages at European level will free up cross border private sector capital, generating significant fiscal relief for Member States.

The EeMAP Initiative is market-led and first of its kind, and aims at the design and delivery of an “energy efficient mortgage”, intended to incentivise the acquisition of energy efficient properties or the improvement of the energy efficiency of existing properties by way of preferential financing conditions linked to the mortgage.

At the heart of the Initiative is the assumption that energy efficiency has a risk mitigation effect for banks as a result of its impact on a borrower’s ability to service their loan and on the value of the property. This means that energy efficient mortgages will represent a lower risk on the balance sheet of banks and could, therefore, qualify for a better capital treatment. Lower capital requirements deliver a strong incentive for banks to enter the market and, as a result, drive a broader incentive chain, in which all stakeholders, including EU citizens, issuers, investors and society as a whole, derive a concrete benefit.

The Energy Efficient Mortgages Initiative, launched by the EMF-ECBC - and other partners among which SAFE - in September 2016, explores ways to mobilise private mortgage financing to boost energy efficient building renovation in Europe. The aim of the project is to create a suitable framework for a standardized Energy Efficient Mortgage product, which mortgage lenders in Europe can offer to borrowers seeking to purchase and retrofit an energy efficient property.