The EEFIG Underwriting Toolkit


This Toolkit is designed to assist financial institutions to scale up their deployment of capital into energy efficiency. It was compiled with several objectives in mind:

  • to help originators, analysts and risk departments within financial institutions better understand the nature of energy efficiency investments and therefore better evaluate both their value and the risks.
  • to provide a common framework for evaluating energy efficiency investments and analysing the risks that will allow training and capacity building around standardised processes and understanding.
  • to help developers and owners seeking to attract external capital to energy efficiency projects to develop projects in a way that better addresses the needs of financial institutions.
  • to foster a common language between project developers, project owners and financial institutions.

Although the focus is on value and risk appraisal, additional material on the size of the potential market, methods of financing and the project life cycle have been included to give a fuller picture and help build capacity within financial institutions. In addition, the sections of this EEFIG Toolkit have been designed with several specific audiences in mind:

Senior Management and decision makers: The first section, “Financial institutions and energy efficiency”, is aimed at senior management and executives new to energy efficiency or already considering introducing energy efficiency related products or programmes. It sets out the arguments why financial institutions should be interested in deploying capital into energy efficiency, namely: business opportunity, risk reduction, Corporate Social Responsibility, and regulatory pressure.

Origination teams and project developers: The second section, “Financing Energy Efficiency”, sets out the different ways in which energy efficiency can be financed and the types of structures and contracts that can be used. It is aimed primarily at origination teams and project developers.

Project developers and risk teams: The third section, “The Project Life Cycle”, describes the overall process of developing and executing an energy efficiency project. It is aimed at establishing the foundations for a standardised process and a common language that can be used by financial institutions, project developers and project hosts. As such it is aimed at project developers, originators and risk teams.

Risk teams, project developers and originators: The fourth section, “Value and Risk Appraisal”, identifies the various sources of value that can be created by energy efficiency projects (including non-energy benefits), such as increased asset value, increased productivity and increased health and well-being. All energy efficiency investments, whatever their size or nature, involve various types of risk including several components of performance risk, as well normal counter-party risks, and this section sets out the categories of risk and how to mitigate them. An overall approach to risk appraisal is set out. This section is primarily aimed at risk teams but should also be of value to originators and project developers in two ways. Firstly, the discussion of the various sources of value resulting from energy efficiency investments may help the selling of energy efficiency projects and products, and secondly, understanding the risk factors from the beginning of the project life cycle should lead to better developed business cases with lower risk and higher performance.

Besides the sections described above, the Toolkit also includes an on-line Resources section which can be used to access more detailed information on specific topics. The Resources section is a “living document” which can be expanded as the energy efficiency financing market develops.

Although the Toolkit is primarily aimed at private providers of finance the principles of energy efficiency financing, the project life cycle and value and risk appraisal approach described within the Toolkit apply equally to public bodies deploying capital into energy efficiency – even if capital is being deployed at below market rates or in the form of grants – and therefore the Toolkit should also be of assistance to those developing publicly supported energy efficiency programmes. The Toolkit also aims to assist project developers and project hosts to develop projects that are more in line with the requirements of financial institutions.

Finally, the Toolkit could also be useful to Chief Financial Officers and financial teams within corporates who are looking at funding energy efficiency projects using corporate balance sheet funds. In considering proposed energy efficiency investments corporate financial decision makers often face many of the same issues as providers of external finance, including a lack of confidence in the projected results and a lack of capacity to properly evaluate investment projects.

Using the Toolkit

  • Are you a senior manager or executive considering, or establishing a programme to deploy more capital into energy efficiency?
    • Focus on:
      • Energy efficiency and financial institutions
      • Financing energy efficiency
  • Are you working in valuation and risk assessment or a corporate CFO looking to invest in energy efficiency?
    • Focus on:
      • Value and risk appraisal
      • Project life cycle
      • Financing energy efficiency
  • Are you an originator, project developer or project host looking to understand more about the project development process and the appraisal of energy efficiency projects?
    • Focus on:
      • Financing energy efficiency
      • Project life cycle
      • Value and risk appraisal

For additional detail on the topics discussed here the on-line Resources volume is available here. The Resources section includes material on energy efficiency principles, energy management, energy efficiency technologies, energy efficiency policies, examples of energy efficiency financing, as well as various tools and information on risk mitigation methods.


The authors would like to acknowledge all members of EEFIG for their input and specifically the following organisations which have made direct contributions to the writing of this Toolkit.

ABN Amro, Adelphi, Amber Infrastructure, Ameresco, Aon, Aurubis, Barclays, BASE, Belifus, Berlin Hyp, Better Building Partnership, BMGI-Consulting, BPCE, Bulgarian Energy Efficiency and Renewable Sources Fund, Caisse des Depots et Consignations, Carbon & Energy Fund, CEN/CENEC, Cycle 7, Danfoss, DENEFF, Deutsche Bank, DG Energy, EFIEES, EEIP, EEP University of Stuttgart, EEVS, Eiffel Fund, EESL, EuroACE, European Energy Efficiency Fund, Eurima, European Investment Bank, Finerpol EPC, Green Investment Bank, Hermes, IFFR, Investor Confidence Project, ING, Italcogen, KEA Baden-Wurtenberg, Komercni banka, LABEEF, Lux Nova Partners, Münchener Hypothekenbank, PACENow, PIB Insurance, PostBank, OpenExp, RdA Climate Solutions, Romanian Green Building Council, Saint-Gobain, Santander Group, Serimus, SUSI, Tera srl, The Carbon Trust, The CO Firm, The Curve, Triodos, Turboden, UK Department for Business, Energy & Industrial Strategy, UNEP FI, University of Geneva, University of Stuttgart, Verco Advisory Services, Vesta Conseil & Finance, VIPA.

Any errors or omissions remain the responsibility of the authors.


Principal Author: Steven Fawkes, EnergyPro Ltd

EEFIG Derisking Project Consortium:


EnergyPro Ltd

Climate Strategy and Partners


Buildings Performance Institute Europe

National Technical University of Athens