1. RETROFIT REVOLVING LOAN GUARANTEE FUND
Financing Eco-Refurbishment
Global Environmental Social Business - GESB
Aniko Dobi-Rozsa and Adrian Balaci
22 February, 2012
London

2. Structure of presentation
Background
RRLGF Structure
RRLGF Portfolio
Key messages

3. Background
12 years experience in developing, managing and supervising revolving guarantee funds
Proven track record in Europe and globally funded by the World Bank Group and the Global Environment Facility:
Hungary, Slovakia, Czech Republic, Estonia, Latvia, Lithuania, Croatia, Bulgaria, Russia, China, Mexico, India
Capability to refurbish 2% of existing housing stock each year
Hungary: 100,000 homes which is 500,000 UK equivalent
Market development effect is proven
Focus on a regional, local approach

4. Background GESB further developed the model to suit a developed market
The guarantee fund model is patented by GESB. Patent registry numbers are: , , , , &
The model works in various sectors such as:
Municipal buildings, Municipal street lighting, Municipal schools and hospitals, Energy Service Companies, Residential housing, Industrial
Currently GESB is working with three regions in the UK to replicate the model
Awards: International Green Award, Silver prize, 2011 and Sustainable Energy Initiative award 2011

6. RRLGF

7. RRLGF terms 5% portfolio guarantee Loan terms
Provides first loss coverage
Covers losses up to 5% on the portfolio
Portfolio is built by the sector – lower acquisition cost
Provides access to market niche
Loan terms
Single rates to the whole programme is preferable
Risk sharing facility – reflected in interest rates
Standardised procedures – lower administrative cost –reflected in borrowing costs

8. RRLGF Benefits
Minimum 1:20 leverage – highly efficient compared to other schemes
All economical benefits remain with stakeholders
New lending area for banks
Larger volume of projects in the long term – higher profitability
Meet government and climate change targets
Job creation

9. RRLGF Portfolio
Radian: In May 2009 jointly with Radian we applied for ERDF funding via SEEDA in the South East of England region to develop a conceptual finance model. Second phase started in December 2010
Conceptual model and pilot for 300 homes in the second phase
CHC in Wales: In 2011, CHC with the support of the Welsh Assembly contracted GESB to replicate the model in Wales
700 units – £6 million loan portfolio
Countdown project: In 2012 local authorities with Severn Wye Energy Agency commissioned GESB to replicate the RRLGF model in the private sector
300 units - £3-5 million loan portfolio

10. Risks and Rewards Mainstream strategy will be developed Risks:
Engage guarantee fund providers
Develop the right management structure and governance procedures
Develop quality projects under time pressure
Capacity of supply chain
Rewards:
Long term benefits – long term self sustainable programme
Local ownership – independence
All benefit remain in the RSL sector which further strengthens the capacity of the sector
Low risk profile - gives time to financial recovery in case of technical, financial or social defaults
Access to new markets

11. Key Success Factors Quality project management
Streamlined and standardised procedures and guidelines
Quality project management
Competitive supply chain
Quality supervision
Transparent approval procedures (loan and guarantee)
Strong financial support in the guarantee fund (GEF)
Governmental support (grants and interest rate subsidies)

12. Key Messages Answer to individual needs: tailor to households need
Create demand: have the key to make people interested
Affordable and accessible finance: low risk, affordable price, non mortgage based finance

13. Thank you! Information:
Web: