REFINEE project, one of five European innovative finance projects to win the LIFE 2023 call involving Italy, Slovenia and Croatia, is launched
In Friuli Venezia Giulia, the first basket bond dedicated to small and medium-sized enterprises (SMEs) will be launched shortly to promote investments in energy efficiency. The tool will be tested by FVG Plus S.p.A., the in-house company controlled by the Friuli Venezia Giulia Region and founded in 2022 with the aim of managing, implementing and optimizing the use of financial facilities for the benefit of both companies and citizens. The FVG basket bond for energy efficiency of production lines of small and medium-sized regional enterprises is part of the European project REFINEE, funded by the LIFE programme and launched on 1 October, It is being run by an international consortium coordinated by FVG Plus and includes partners from Italy, Slovenia and Croatia. These include the Friuli Venezia Giulia Region itself, Sinloc which together with ABI LAB, research center of the Italian Banking Association will ensure the transfer of project results at national level, the Croatian Istria Region with IRENA, the local energy agency and the Slovenian sustainable entrepreneurship network CER, with the strategic role of replicating the project results in a third EU member state and at the same time responsible for advocacy actions towards the Community institutions dealing with energy transition in industrial sector.
The REFINEE consortium brings together technical and financial expertise to develop and test innovative financial instruments capable of rapidly increasing private investment in energy efficiency by ensuring an integrated and synergistic approach, It builds on local experience by promoting ad ho c financial solutions for energy efficiency in manufacturing. In general, today in Italy private investment to make industrial processes more sustainable is considerably below expectations and REFINEE aims to bridge this gap by experimenting with new solutions and allowing investors and entrepreneurs to acquire new skills and tools.
AN INNOVATIVE OPPORTUNITY: THE FIRST BASKET BOND OF FRIULI VENEZIA GIULIA
The REFINEE Basket Bond is the first instrument of its kind in Friuli Venezia Giulia, aimed at financing energy efficiency projects for SMEs, which account for one third of the total energy consumption of the region, e offers an alternative financial solution that allows SMEs to access funds to invest in energy innovations without having to provide guarantees. The transaction involves the securitisation of mini-bonds issued by a number of SMEs through a special purpose vehicle (SPV), which will issue an asset-backed security bond divided into tranches. The junior tranche will be underwritten by FVG Plus, while the senior tranche will be reserved for institutional investors, making the operation attractive to the private sector and multiplying the resources available.
This model offers SMEs the opportunity to invest in more efficient technologies, reduce energy costs and increase their competitiveness, while contributing to the transition towards renewable energy sources. “The project – explained Francesco Clarotti, Sole Administrator of FVG Plus –
aims to involve initially an audience of at least 30 SMEs in FVG where industry accounts for one third of regional energy consumption and there is therefore significant scope for improvement. This Basket Bond will offer not only a new financing opportunity, but also a management growth path for SMEs, allowing them to interact with institutional entities and improve their skills in alternative finance. In a rapidly changing global environment, the project will provide the tools needed to successfully tackle the energy transition, contribute to the sustainable growth of the Friuli Venezia Giulia Region and achieve significant results both with regard to European objectives and for the efficiency of the production processes of our companies” .
PARALLEL INITIATIVE IN ISTRIA: THE INDUSTRIAL ENERGY COMMUNITIES
In parallel, the REFINEE project provides an innovative initiative in the Istrian Region to support Industrial Energy Communities. This solution will enable SMEs located in the same industrial area to share renewable energy produced between plants, optimizing their use and increasing overall efficiency. The REFINEE project aims to develop an innovative hybrid finance scheme (access to specialised services and facilitated finance). The scheme will also include a soft loan partially covered by the Istria Region and local authorities to finance investments in energy efficiency and renewable s. The two financial instruments will be tested in their respective regions during the three-year project and the results, in terms of impacts for direct beneficiaries (enterprises) and for communities will be measured with rigorous metrics and presented at major benchmarking tables where guidelines are defined for future sector incentives, such as the European Commission’s Sustainable Finance Working Group, of which ABI LAB is a member.
