Funding Sources for a microhydro site include :
- Capital from the Cooperative, raised through selling shares
- European Funds managed at National and Regional Level
- Energy Efficient Bank Loans
- Grants & Local subsidies
Banks
Banks will fund 70% of the project. Note that one of the biggest Belgium Bank already supports the project and committed to study with us the most appropriate way to finance the project. This is very important since Banks have been very reluctant in the past to even consider hydro projects due to size being deemed too small to be profitable, and some other misconceptions regarding hydro (low efficiency, …).
Community Shares
Local investors will fund 15% of the total costs through buying shares. For the First Wave of 5 WaterMills, this means we will need to raise nearly 100.000 €, meaning +- 380 cooperants buying a standard share @ 260 €.
If we can’t convince enough citizens to buy cooperative shares to start with 5 sites, then we only start with the amount corresponding with the money raised (so 1, 2 or 3 sites for example). Other mature projects for which we wouldn’t have raised enough funds will be frozen until new money is found.
European Funds managed at National and Regional Level
Structural Funds & Cohesion Fund
The European Cohesion Policy is divided into three main funding instruments:
- The European Regional Development Fund (ERDF)
- The European Social Fund (ESF)
- The Cohesion Fund (CF)
European Regional Development Fund (ERDF) for energy efficiency improvements and use of renewable energy in existing housing
- In each Member State, expenditure on energy efficiency improvements and on the use of renewable energy in existing housing shall be eligible up to an amount of 4 % of the total ERDF allocation.
- Member States ought to amend existing priorities to reallocate received funds (ERDF) towards energy-saving measures in existing housing
- No formal approvals of the Operational Programmes by the European Commission are needed
- Member States do not need to wait until the end of 2013 to implement the necessary changes
Communication of the European Commission ‘Regional policy contributing to sustainable growth in Europe’
JESSICA technical assistance
JESSICA – Joint European Support for Sustainable Investment in City Areas – is an initiative developed by the European Commission and the European Investment Bank, in collaboration with the Council of Europe Development Bank.
Under new procedures, Member States or regions are being given the option of using the structural funds to make repayable investments in projects forming part of an integrated plan for sustainable urban development. These investments, which may take the form of equity, loans and/or guarantees, are delivered to projects via Urban Development Funds and, if required, Holding Funds.
JASPERS technical assistance
JASPERS – Joint Assistance to Support Projects in European Regions – assists the 12 Central and Eastern EU Member States in the preparation of major projects to be submitted for grant financing under the Structural and Cohesion Funds. The aim is to increase the quantity and quality of projects to be sent for approval to the services of the Commission. JASPERS’ assistance, which is provided free of charge, is geared towards accelerating the absorption of the available funds.
Cooperation programme INTERREG IV A
The programme supports cross-border cooperation along all interior borders of the EU. The aim is to enhance the exchange of experiences between the European regions and find joint solutions on problems encountered. The main idea is to prevent the “re-inventing of wheel” and replicate faster successful policies and strategies implemented elsewhere. The added value of such projects is sometimes intangible – improved knowledge, capacities, contacts, and new experiences, sometimes pilot actions and hard investments are financed.
Cooperation programmes INTERREG IV B
Pilot projects, investment preparation and light investments are allowed within this type of cooperation.
EUROPEAN FUNDS MANAGED CENTRALLY BY THEEUROPEAN COMMISSION
Cooperation programmes INTERREG IV C & URBACT
Interregional cooperation (INTERREG IV C): Projects are strictly focused on the exchange of experiences and some light pilot initiatives – testing methodologies and tools. Investment activities are not supported.
URBACT: European exchange and learning programme for cities promoting sustainable urban development. Cities work together to develop solutions to major urban challenges, reaffirming the key role they play in facing increasingly complex societal changes.
Intelligent Energy Europe Programme (IEE)
There are many untapped opportunities to save energy and encourage the use of renewable energy sources in Europe, but market conditions do not always help. The IEE is a tool for funding action to improve these conditions and move us towards a more energy intelligent Europe.
With € 730 million funds available between 2007 and 2013, the IEE reinforces EU’s efforts to meet its 2020 energy targets. The programme runs annual calls for proposals and its funding covers up to 75% of the eligible project costs.
The IEE considers local authorities as a main target group. It co-finances projects that contribute to the success of the Covenant of Mayors initiative, notably through promotion, facilitation of networking among local authorities, regions and their local partners and technical support to Covenant Signatories.
ELENA facility
ELENA – European Local Energy Assistance – is a facility that provides grants for technical assistance. The wide range of measures eligible for such financial support include: feasibility & market studies; structuring of investment programmes; business plans; energy audits; preparation of tendering procedures & contractual arrangements and allocation of investment programme management to newly recruited staff. The aim is to bundle dispersed local projects into systemic investments and make them bankable.
The actions featured in the municipalities’ action plans and investment programmes must be financed through other means, such as loans, ESCOs or structural funds.
ELENA is financed through the European Intelligent Energy-Europe programme with an annual budget of €15 million.
ELENA-KfW
This new technical assistance facility has been launched by the European Commission in cooperation with the German group KfW. It supports medium-sized investment projects of less than €50 million with a focus on carbon crediting.
ELENA-CEB
Developed by the European Commission in partnership with the Council of Europe Development Bank, ELENA-CEB will provide technical assistance for the development of investment projects targeting social housing.
Smart Cities & Communities
Covenant Signatories having taken a political commitment to mitigate climate change and developed a holistic sustainable energy action plan for their territories can also benefit from the technology component of Europe’s energy policy. The Smart Cities initiative will support a limited number of larger technology-focused projects of cities and regions featuring pioneering measures in sustainable use and production of energy as well as in mobility.
It will draw upon the other Strategic Energy Technology Plan (SET-Plan) initiatives, in particular the Solar Europe Initiative and European Electricity Grid Initiative, as well as on the EU public-private partnership for Buildings and Green Cars, established under the European Economic Plan for Recovery.
European Energy Efficiency Facility
A new European investment fund for sustainable energy projects is to be launched in 2011. This fund will use the unspent €146 million from the European Economic Recovery Programme, supplemented by co-funding from the European Investment Bank, in order to provide equity, guarantees and debt products for public authorities and entities acting on their behalf. The fund will focus on investments in buildings, local energy infrastructure, distributed renewable installations and urban mobility.
Municipal Finance Facility
The Municipal Finance Facility is an initiative of the European Commission and the European Bank for Reconstruction and Development (EBRD) to develop and stimulate commercial bank lending to small and medium-sized municipalities and their utility companies in the EU countries who joined the EU in 2004 (Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovak Republic and Slovenia with Bulgaria and Romania). The facility combines EBRD finance in the form of long-term loans and/or risk sharing.
Sustainable Energy Initiative
The European Bank for Reconstruction and Development (EBRD) supports municipal sustainable energy projects in the countries of its operation.
The areas of intervention (e.g. municipal energy infrastructure, transport, carbon market, etc.) target municipalities, local banks, Small and Medium Enterprises and other local actors.
We know that Structural Funds in Belgium have been largely untapped the last few years and that it is in the objectives of the EU to encourage and facilitate their access. We are working with ESHA (European Small Hydro Association) to plan a strategy allowing us to take advantage of this source of money for our project.
Local Subsides – Example for Belgium
Pre-feasibility Study – For all persons
Under the program AMURE defined by the AGW of 30 May 2002, studies feasibility to assess the suitability of an investment to use
the use of renewable energy sources can be subsidized up to 50% of eligible costs
Tax deductions for investment saver Energy – For Business
These deductions are reflected by immunization of profits up to order 13.5% of investment costs. These deductions are made from the profits of the period during which the assets were acquired.
The advantage is granted by the Minister of Finance, the Region issued a certificate ensuring that investments are eligible.
Premium to use renewable energy – for Businesses
A bonus is awarded to companies in order to encourage them to invest in the exploitation renewable energy (RE) (solar, wind, hydro,
Energy from waste non-hazardous industrial waste or urban, including biomass including biofuels from agriculture, forestry and horticulture, and geothermal).
The premium is calculated on a case by case basis and the investment cost varies depending on the size of the company. The authority issuing the bonus is the Directorate General Operational economy (DGO5) of the Ministry of the Walloon Region. For substances
relating to energy, it uses the opinion of the DGO4.
For public buildings or similar – Program UREBA
The program UREBA concerning building and related workers. These buildings communes, CPAS, provinces and non-commercial organizations (schools, hospitals, swimming pools and other services to the community association, association is pursuing an philanthropic, scientific, technical or teaching in the field of energy, protecting the environment or the fight against social exclusion). Any investment operation of renewable energy sources for the purposes own the building may receive a subsidy of 30% of the amount of Investment VAT.
For preservation of small Patrimonium Walloon – The impellers
A maximum subsidy of 7,500 euros (up to 100%) may be granted for maintenance, repair, renovation and restoration, whether or not
conservation measures or a remarkable tree.
A maximum subsidy of 2,500 euros (up to 100%) is paid for collective action for the development and promotion of small Folklore
Walloon.
Study costs (architects, landscape experts, …) are not taken into consideration.
The impellers are small elements of Folklore Wallon and may be subject to a grant provided they are visible from streets or public access. Only then are concerned restorations wheel alike. Reconstruction of missing wheel is not supported.
Benchmark
As a benchmarking, we note the following funding mix for WindMills in Belgium:
- Subsides : 10%
- Banks : 80%
- Community : 10%
Links & Sources :
Triodos finances projects in renewable energies for 30 years
Managing authorities of the Structural funds
Structural Funds in Walloon Region
Funding Instruments – Covenant of Mayors
FEDER (fonds de développement régional) : list of authorities
Interreg IV France – Wallonie – Flaanderen
Fonds européen pour le développement rural
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