Investigation of financing possibilities for Municipality of Šentrupert and later on for area Heart of Slovenia

Published by Suzana Vurunić on 11.11.2013

Within technical workshop with Šentrupert (12th of September 2013) we put a lot effort to find relevant financial mechanisms that can be used for financing the implementation of the actions of CHP wood in Šentrupert. We identified different financing options and proposal of well-established financing instruments for EE and RES projects that can be used to implement activities defined in SEAPs.

These financial mechanisms/models drawn from experience of existing projects were presented to mayor and municipality representatives of Municipality of Šentrupert. An important part was to work on including local stakeholders in financing local projects. We promoted active participation.

We made an overview of all possible financial mechanisms that were later implemented into SEAP of Municipality of Šentrupert. As this document was later the base for preparation of individual SEAPs for municipalities Litija and Šmartno pri Litiji already prepared overview turned out to be really useful.

To finance proposed actions municipality must have suitable financial sources available. Financing plan defines all available means of financing and all mechanisms and systems to finance proposed actions.

There are different means available for financing actions from the fields of energy efficiency, renewable resources and reducing CO2 emissions. As a member of the EU Slovenia can apply for numerous grants within the union and municipality as such can also apply and both national and EU level for such grants. To successfully gain access to these grants there needs to be cooperation both within municipal administration as well as with external specialists, development institutions, private sector and energy offices and agencies.

Municipalities can get funding through:

1. Public-private partnership, which can take form either as private investments projects of the public sector and/or public co-financing of private project that are in public interest and is agreed upon between public and private partner in regard to construction, maintenance and management of public infrastructure.

2. ESCO – Energy Service Company means that the private company invests in measures to improve energy efficiency and then the investment returns through energy savings. Owner of a public building can continue to pay the same amount for consumed energy (or it can start to pay less immediately, depending on the agreement), after the contract ends the owner keeps all the provided equipment.

3. Eko sklad (Eco fund), which is Slovenian environmental fund and the biggest financial institution with the purpose to encourage environmental investments in Slovenia. Fund supports development in the field of environmental protection and gives out loans and/or guarantees for environmental investments and also provides other kinds of assistance for such projects. Fund encourages investments that are compliant with the national program of environmental protection and with the environmental policies of European Union.

4. EU Funds, where between the years 2014 and 2020 Slovenia has available approximately 3,255 billion euros from European structure funds and Cohesion fund, out of which 159,8 million euros is intended for Instruments for European integration (in the field of traffic) and 64 million euros for programs of European territorial cooperation. Remaining majority of funds takes into account fulfilling Strategy EU 2020 and will be primarily intended for:

- investments in research, development and innovations, competitiveness, employment and training;

- infrastructure for achieving better state of environment, sustainable use of energy and sustainable mobility as well as efficient resource management.

5. Rural Development Programme (RDP) 2014–2020, where one of the requirements defined is also need to increase the use of renewable energy sources in energy consumption and increase of energy efficiency. The greatest potential for the promotion of RES and EE in the countryside gives a measure M06 Farm and business development, sub-measure 6.4 – Support for investments in the creation and development of non-agricultural activities. The purpose of the sub-measure is to provide support for investments in the creation and development of non-agricultural activities in rural areas such as adding value to wood, local self-sufficiency, the treatment of organic waste and the production of electricity and heat from renewable energy sources such as wood biomass, biomass, manure and slurry, water, wind and sun. A total of 97.040.000 € is intended for this measure by the year 2020.
Also important is measure M19 Support for local development in the context of LEADER (Links between actions for the development of the rural economy). The purpose of this measure is to encourage local development in rural areas with bottom-up approach, taking into account the multi-sectoral local challenges and needs for endogenous rural development. The aim of the measure LEADER is promoting social inclusion, poverty reduction and economic development in rural areas. A total of 52.000.000 € is intended for this measure by the year 2020.

6. European territorial cooperation on the basis of cross-border cooperation, transnational cooperation and inter-regional cooperation. In the period 2007–2013 Slovenia has participated in 4 transnational programs (Alpine area, Central Europe, Southeastern Europe, the Mediterranean) and 4 inter-regional programs (INTERREG IVC, INTERACT II, URBACT II, ESPON 2013). In the period 2014–2020 Slovenia will be entitled to participate in the 5 transnational and 4 inter-regional programs, where almost € 8.95 billion from the European Regional Development Fund will be available.

7. HORIZONT 2020 that consists of special program for the energy sector and is intended to support the transition to a safe, clean and efficient energy system in Europe. One of the work programs topics is energy efficiency. The purpose of the call for energy efficiency is to provide support for innovations through research and demonstration of energy-efficient technologies and solutions. The value of the tender for 2015 was around € 100 million.

Thus for the implementation of the already adopted Local Action Plan, which will be upgraded into SEAP, is necessary to define the various possibilities for obtaining financial resources for the implementation of the measures listed in SEAP. Before the implementation of each measure or project it is necessary to review the possibility of obtaining grants through different calls in the Republic of Slovenia, from European funds, possibilities for cooperation in various European and international tenders and projects, favorable credit and other potential sources of funding (ESCO model contracting, public-private partnerships, etc.). In implementing the specific actions and projects it should be considered also the participation of citizens and the establishment of cooperatives, which could also be involved in their implementation. With implementing it is important to achieve the most favorable price, both for the municipality and for its residents.

For efficient, accountable, transparent and open implementation of the SEAP it is needed to establish an effective system to inform and involve public in all decision-making processes and the implementation of measures in SEAP.