Financing for energy efficiency is facilitated by a diverse set of institutions, including multilateral development banks, donor agencies, government stakeholders, private sector banks, pension funds, and financial intermediaries.

Mobilizing finances to cover up-front costs represents a major barrier to developing and implementing energy efficiency programs.

Among the various institutions that have stepped in to facilitate financing for energy efficiency programs are international development banks, international donors, central and regional governments,and energy service companies (ESCOs). In addition, private banks and funds have become increasingly interested in funding energy efficiency projects.

These financiers use a range of strategies for project financing. For example, Energy Efficiency Services Limited (EESL), a state-promoted ESCO in India, is using an “on-bill” financing strategy to implement its Domestic Efficient Lighting Programme; consumers repay funds over time via their recurring utility bill. Other financing strategies include property tax financing (also known as Property Assessed Clean Energy or PACE bond financing) and energy service performance contracting (ESPC).

Learn more below about the primary actors in the energy finance field and the types of mechanisms they use.

International

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Developing Energy Efficiency Programs
Developing Energy Efficiency Programs
Bobby Neptune / USAID