Harmonious cities - UN-Habitat

IN-FOCUS Energy
Cities like Rio de Janeiro were one of the first to realise that energy efficiency is the only way forward Ph o t o © jo n A S me l l Q v i S t
have tackled technical risk by collaborating
with the Inter-American Development Bank
to establish a new financial tool, the Energy
Efficiency Guarantee Mechanism. This operates
effectively as an insurance product for
the lending banks against the risk of technical
failure by the energy service company in
38
u r b a n
WORLD
November 2008
its mission to reduce consumption and make
the projected savings on energy costs.
The importance of the project lies not only
in the environmental benefits for Brazil but
also for the rest of the world.
“This is very important in the sense that
if we do it right in Brazil we should be able
By 2030 the use of coal could rise by 73 percent according to the International Energy Agency
Ph o t o © St e v e ed W A r d S
to replicate it in other countries,” says Peter
Stevenson, Principal Investment Officer at
the Inter-American Development Bank. “We
see this as a pilot project that may stimulate
banks to invest in further energy efficiency
projects.”
Some energy companies dedicate 0.25 percent
of annual revenues to energy efficiency
projects in customer facilities and general
conservation education efforts. The wire
charge fund provided about USD 250 million
to efficiency initiatives between 1998 and
2004 and many utilities work with energy
service companies to fulfill these requirements,
helping the industry grow.
Financial benefits for Brazil in developing
the industry are also a key motivator, and its
success could prove to be the impetus for the
blossoming of a domestic industry. “This is
not about attracting foreign energy service
companies,” says Mr. Langlois. “It’s about
building an ESCO market within Brazil that
is strong enough to operate by itself.” u
Note: this article is based in part on
interviews conducted for the IDB magazine
Multilateral.