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The Fund has planned and wants to develop the ESCO system, which is an important tool for energy savings in other countries, concentrating resources in the public sector, which requires new solutions to meet energy efficiency requirements and reduce costs for infrastructure maintenance. The Foundation has previously had experience in an area equivalent to the ESCO mechanism, financing the replacement of lighting in Latvian municipalities, where principles and conditions similar to the ESCO system were applied. In 2017, the Foundation started the implementation of ESCO pilot projects in the field of lighting of public territories by concluding two agreements with local governments on the arrangement of public lighting in their territories. For the implementation of pilot projects of the ESCO mechanism, tripartite agreements would be concluded on the improvement of the public area lighting system between the ESCO company, the maintainer (owner) of the public area lighting system, and the Fund. Taking into account the experience with projects within the CCFI tender “Reduction of Greenhouse Gas Emissions in Municipal Public Area Lighting Infrastructure”, it is forecasted that the average total cost of a public area lighting project could be around 200,000 euros and the average payback period is 6-7 years.

Action for further implementation of the ESCO mechanism for the implementation of other public infrastructure projects will depend on the results and experience of the implementation of pilot projects in the field of lighting of public areas.

Both the Union of Local Governments of Latvia and the Ministry of Economics have shown interest in the development of the ESCO direction, thus the Foundation, taking into account its experience in implementing various environmental projects, has the opportunity to become a pilot organization at national level in one area of ​​municipal responsibility. basis for further development of the system in other areas as well. It should be taken into account that the reduction of CO2 emissions is one of the main priorities of the European Union and Latvia in the field of environmental protection, but the ESCO mechanism is an important tool for promoting the achievement of the set goals.

The conditions of both the European Bank for Reconstruction and Development (hereinafter - the EBRD) and NEFCO have been evaluated as cooperation partners for the implementation of the ESCO system, taking into account that the Fund has previously had successful cooperation with NEFCO without borrowing financial resources.

By participating in the implementation of the ESCO system, the Fund does not intend to offer preferential financing conditions to ESCO companies, as one of the planned sources of financial resources for financing ESCO projects would be credit resources attracted to market conditions from international financiers (EBRD, NEFCO, etc.).


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