Challenges, objectives and expected results of the Sustainable Energy Investing and Financing Activation (SEIFA) project

Challenges of the transition in the industrial sector

Sustainability and the transition to a low-carbon, more resource-efficient, and circular economy are key in ensuring the long-term competitiveness of the EU economy. The industry represents the most energy-intensive sector: steel, cement, and manufacturing productions account for 21% of human emission – one and a half times as much as all the world’s cars, trucks, ships, and planes combined [1]. To reduce emissions, the industrial sector will need to displace fossil fuel-based energy inputs with low-to-zero emissions, along with improved heat integration and energy efficiency.

Current levels of investment are not sufficient to support an environmentally and socially sustainable economic system. According to the Impact Assessment for the amendment of the Energy Efficiency Directive, in order to reach the EU’s 2030 climate and energy target, about €379 billion of investments are needed annually: mostly in energy efficiency, renewable energy sources, and infrastructure [2].

Reorienting private capital to more sustainable investments requires a comprehensive shift in how the financial system works. Surveys suggest that companies and investors attention for investable climate mitigation project is rising; they are increasingly searching for investments that take into account environmental and social considerations [3].

SEIFA’s objectives [4]

The recently launched Sustainable Energy Investing and Financing Activation (SEIFA) EU-funded project aims to increase the rate of industrial decarbonisation of the built environment by creating incentives for private equity investors. In addition to that, SEIFA is focusing its efforts on investing and financing a modernisation of industrial parks, energy supply facilities, and their clusters in Central and Eastern Europe (CEE region).

First, SEIFA will collect, model, and analyse environmental and financial data in the preparation of the sustainable energy investment guidelines, and risk management methodology. Next, SEIFA will develop a financial software tool for sustainability and financial data visualisation, enabling users to access sustainable energy financial instruments and investable sustainable energy industrial projects in the CEE region.

On the 28th of October, SEIFA partners already launched the regional/national aggregators for investable industrial projects in the CEE region, including Bulgaria, Croatia, Czech Republic, Estonia, Germany, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia. SEIFA may also involve neighbouring countries of the aforementioned participating countries (EU Associated). Project aggregators will structure the demand by creating large and standardised pipelines of investable sustainable energy industrial projects. The aim is to establish and engage a network of professional private equity investors for the provision of at least €500 million of sustainable energy financing during the project duration.

Finally, SEIFA will assess legal, tax and regulatory environment, creating a standardised investment value chain for primary and secondary market sustainable energy investing and establishing an efficient and low transaction cost operational financial mechanism.

The expected results

SEIFA will boost the transition to a low-carbon and resource-efficient industrial sector. Within the project duration, it will trigger at least 200 GWh/year of primary energy savings generating a 200.000 tCO2-eq/year reduction of greenhouse gas emissions and no less than 2500 GWh/year with at least 2.500.000 tCO2-eq/year emission reduction within 5 years after the project’s end.

SEIFA presents sustainable energy investing as an economic opportunity. The project will help open up new employment and investment opportunities laying the pathway for economic growth. Greater advisory and technical assistance will contribute to a larger pipeline of sustainable energy projects. The platform will greatly increase the attractiveness to sustainable energy investing across Europe and beyond.

[1] GA, ANNEX I part B, Section 1; Excellence

[2] COM(2016) 860 final. European Commission. Clean Energy for All Europeans.

[3] HSBC, Sustainable Financing and Investing Survey – Global Report 2021

[4] GA, ANNEX I part B, Section 1.1; Objectives