Pooled financing mechanisms support local governments that are too small to undertake debt structuring and negotiations on their own, or at least to achieve a lower cost of funds than they could achieve alone. These funds usually come with specific eligibility criteria and may have a particular sector focus. Governments also often channel grant funds for project development and subsidies to specific activities through such entities.
Low - limited evidence available
Enabling conditions and success factors
- Strong coordination between stakeholders, ideally by a neutral party without conflict of interest, for example, in the energy efficiency services or products that can be purchased.
- Overcomes high upfront costs.
- Increases investor interest and confidence due to higher returns and greater stability than financing individual entities.
Challenges and risks to implementation
- Many stakeholders don't realise the beneficial impact of energy efficiency improvements on buildings and equipment, so it is important also to raise awareness and promote pooling finance options.
- Building consensus, trust and a shared approach among stakeholders can be challenging. A neutral enabling agent is often important to broker such relationships.
Referenceshttps://www.nama-facility.org/projects/south-africa-energy-efficiency-in-public-buildings-and-infrastructure-programme-eepbip/ https://goexplorer.org/properties-upgrades-blocpower/ https://www.reeep.org/projects/carbon-financing-energy-efficiency-indian-sme-clusters
Pooled finance and a blended finance approach in the Water and Sanitation Pooled Fund (WSPF) in Tamil Nadu, IndiaView case study
Pooling finance for energy efficient buildings in South AfricaView case study