Cooling-as-a-Service (CaaS) aims to help deploy clean cooling at scale in emerging market cities by overcoming performance risks, upfront costs, and misaligned stakeholder incentives for efficiency - which can otherwise prevent clean cooling investments from happening. Conventional cooling systems pose significant climate risks, in that they both consume large amounts of electricity and rely on HFC gas coolants, that are much more potent than CO2 in their contribution to global warming. CaaS seeks to apply a service model for clean cooling equipment, that consumes less energy and uses much lower-impact coolants, wherein a customer does not own cooling equipment but instead pays a technology provider for each unit of cooling that they consume in a given month - incentivizing reduction of cooling use to its lowest efficient level. A technology provider provides the cooling equipment, pays its electricity costs, and covers ongoing maintenance - incentivizing deployment of the most efficient technology and the best maintenance practices possible to reduce operating costs. The Q Group in Medellín, Colombia has applied CaaS in constructing a new building that accommodates 100 offices. The aim was to deliver a high-quality building (LEED certified) for its occupants with the best comfort standards while optimising capital expenditures. MGM Innova Group designed an HVAC solution that included a high efficiency centralised air-conditioning system complete with valves to measure the amount of cooling delivered to each user. The investment was fully carried out by MGM Innova Group and a monthly payment is billed to every office on a CaaS model. By selecting this innovative pay-per-use model, a superior air-conditioning system could be installed, saving an estimated 1,2GWh in energy and 440-ton CO2e in greenhouse gas (GHG) emissions annually. By applying the CaaS model, MGM Group carried out the total investment, relieving the client from such expenditures. They installed a system with a record efficiency of 0.6kWh/TRh, halving the major operation expenditure. The project realised benefits for the final users, with additional savings in energy bills and in operation and maintenance costs. The CaaS solution is expected to realise savings of around EUR5million/ USD 5.3M during the entire lifetime of the solution.
Latin America and the Caribbean
Leasing and asset finance models
Project size (range)
Project size (details)
MGM Sustainable Energy Fund L.P. (MSEF)
Year of financial closure
Q Group Medellin
MGM Innova Group who manage MGM Sustainable Energy Fund (MSEF)
Other transaction participants
Reduced upfront costs: Air conditioning consumes most of the energy used in the commercial sector, accounting for more than 60% in commercial buildings. The implementation of high efficiency systems is often held back by larger upfront capital costs. CaaS involves building and business owners paying for the cooling service instead of purchasing the infrastructure that delivers the cooling. The technology provider owns the cooling system, maintains it, and covers all operational costs including electricity.
Benefits of the investment can be realised by multiple stakeholders: By applying the CaaS model, MGM Group carried out the total investment, relieving the client from such expenditures. They installed a system with a record efficiency of 0.6kWh/TRh, halving the major operation expenditure. The project realised benefits for the final users, with additional savings in energy, and in operation and maintenance costs. The project therefore provided benefits to all stakeholders involved: (i) The construction company reduces capital investment, (ii) final users reduce operative expenditures and distraction from their core business, plus the contract type allows payments to be accounted off-balance since customers are paying for a service and no debt is involved. , (iii) MGM Innova Group reaches its expected return, and (iv) technology providers meet their sales goals. The CaaS solution is expected to realise savings of around EUR5M/ USD 3.2M during the entire lifetime of the solution.
The CAAS project works in the following manner: 1. Contract signature between a special purpose vehicle (SPV) and the client; 2. Capitalisation of the SPV by MSEF & Aire Verde; 3. The SPV buys the equipment, contracts service providers and manages the project implementation through a service contract with MGM Innova (MGM) & Aire Verde; 4. MGM Innova manages the project and controls the integration; 5. Aire Verde executes EPC activities; 6. The investment is repaid through the sale of CaaS services and backed by the savings generated by the project; and 7. The SPV reimburses MSEF and AireVerde through dividends.
Suitability for cities in low-and-middle income countries (detail)
Yes. In addition to Colombia, the CaaS initiative is currently implementing various pilot projects worldwide to test this innovative new financing model, including in South Africa, Nigeria and India.