In areas with the ambition to renovate large numbers of homes energetically, the financing needs will also be high. This may exceed the financial capacity of corporations and other owners. For this purpose, solutions are needed that are developed in cooperation with financial institutions (banks, mutual funds), private financiers (venture capital investors, ESCOs, etc.) and urban NGOs. It concerns innovative financial concepts, with well-founded conditions for all stakeholders and a good analysis of the risks.
It is thought, among other things, of a set of contracts based on Design, Build, Finance, Maintenance and Operate. These contracts apply
• Long term partnership; contracts / construction plus 30 years of maintenance
• Payment based on precisely defined achievement targets - output oriented. The actual saving of residents is the incoming cash flow of the SPV
• Off-balance sheet private financing of housing associations with funds from banks and share capital introduced by participating companies - private finance (bank debt and equity);
• Risk transfer
Example of the output of the Financial Engineering Method (FEM)
A current example shows existing energy bills and predicted energy bills of 49 households, living in apartments of 58 m2 (GFA). These households are divided into five categories of energy use for heating and two categories of hot water use. The houses were renovated from label D to label A+. Based on big data, an average benefit can be calculated, knowing which household belongs in which profile (micro data).
A calculation example of the Financial Engineering Method
By using this macro and micro data, the calculations are far more precise then when using other calculation models (with “representative households”). The method categorizes households in different profiles in terms of consumption habits of hot tap water and of space heating: very careful, careful, mild, heat loving, very heats loving (see table above). Household consumptions of hot tap water also vary depending on household composition: important indicators are for instance age and the presence of children. A senior of 65 has different energy consumption characteristics than a family of two adults and a child.
After selecting from various technical variants what performance they provide energetically, it is also a table that compares the energy costs of these variants per resident profile. Based on the cost of the investment, the amount of interest and repayment that is calculated on a repayment of the loan in 15 years. These new monthly charges can be compared to the savings that are generated for residents in each of the ten residents profiles. An extremely useful tool for informing tenants and associations of owners.