Based on an eight-year track record of successfully investing in energy efficiency, SUSI Partners has collated its unique knowledge of the theme into a concise investor paper. The report underlines the importance of energy-saving measures for climate change mitigation and energy security, discusses factors that have often impeded investment in the theme on a larger scale, and demonstrates how these obstacles can be overcome to unlock a highly resilient and diversified investment opportunity.
Today, there remains no doubt that energy efficiency improvements will be a key pillar of a successful energy transition. The energy price shock of 2022, the possibility of long-term elevated energy prices and the threat of immense short-term energy price volatility have significantly increased the willingness of energy consumers to implement energy efficiency measures and the demand for financing has grown accordingly.
In its 1.5°C scenario, which supposes a net-zero energy system by 2050, the International Renewable Energy Agency (IRENA) estimates that energy efficiency will account for more than 30% of energy transition-related capital needs, which amount to over USD 40 trillion over the next 27 years. Given generally strained public resources, private capital will be instrumental in filling this substantial financing gap.
While the investment opportunity that energy efficiency represents is immense, a number of obstacles have made large-scale investment in the theme a challenge. The smaller size and complexity of energy efficiency projects combined with a general lack of standardisation have often deterred banks and funds from investing in such projects. At the same time, these deterrents have led to reduced competitive pressure and consequently attractive financing conditions for investors with access to innovative investment solutions that allow to overcome these challenges.
Having invested in energy efficiency since 2015, SUSI Partners has proven its ability to overcome the challenges associated with the theme thanks to a deep understanding of the energy sector, extensive networks with energy service companies and technology providers, and deep structuring and risk management expertise. As capital needs for energy efficiency continue to increase materially, well-positioned investors can benefit from attractive risk-return profiles while making a crucial contribution to sustainable economic development and the buildout of clean, secure, and affordable energy systems.
Professional investors can request a copy of “Energy Efficiency – Making the case for institutional investment in an underappreciated pillar of the energy transition” at the following link.
