Neighbourhood RenewALL Financed with Energy Performance Contracting

Introduction

The deep renovation of multifamily buildings is a slow-moving industry. This is caused by a weak business case, ineffective regulations for decision-making in multi-owner residential buildings, and a generalized lack of interest and trust from homeowners.

Challenges

A weak business case is linked to:

• Project capital costs (including high transaction costs)
• Lack of long-term financial instruments

RenewALL Concept

The RenewALL concept includes the following elements:

1. Long-term energy performance contracting to deliver deep renovation
2. Financial engineering to further support sector development and upscale long-term financial instruments
3. Moving from a one-building one-project approach to a neighboring approach to reduce costs through larger scale investments in the same area
4. Increasing the interest of homeowners in deep renovation associated with urban renewal of the neighborhood

Project Goals

The project aims to refurbish multi-family buildings in Riga. Only the energy investment related to the multi-family buildings renovation is eligible for the leverage factor calculation (not the other types of construction works for the broader neighborhood urban renewal).

Expected Outcomes

The project expects to mobilize €22.3 million in energy investment in MFB renovation, which represents a leverage factor of 1:15. In this way, RenewALL not only delivers building deep renovation projects, each with substantial energy savings, but also modernizes entire neighborhoods.

Community Impact

This approach sells the dream of living in a fully refurbished neighborhood. The ‘neighborhood’ approach is part of a strategy to trigger the interest of homeowners in a deep renovation project.

Public Sector Involvement

In parallel with the deep renovation of buildings facing this yard, the public sector takes care of renovating inner infrastructures, including:

• Local streets
• Pedestrian and bicycle paths
• Car parking areas (including new charging points for electric cars)
• Public lighting
• Children’s playgrounds
• Waste sorting collection facilities