Third-party financing is a little-known mechanism that allows businesses and local authorities to renovate their buildings or modernize their equipment without any initial investment. This system makes it possible to immediately improve energy efficiency while preserving cash flow. Powesco presents everything you need to know about third-party financing!
What is third-party financing?
The 2014 Alur law defines third-party financing as follows: “the integration of a technical offer, relating in particular to the execution of works whose main purpose is the reduction of energy consumption, into a service including the partial or total financing of said offer, in return for staggered, regular and time-limited payments.”
In other words, it's a turnkey that integrates:
- a financial : financing plan, identification of aid (bank loans, subsidies, CEE bonus etc.), assessment of remaining costs, administrative management, financing of works;
- A technical offer : energy audit, work program, savings estimation, operational project management, implementation of energy-saving works, post-work monitoring and energy savings management
How does third-party financing work?
Third-party financing works as follows:
- A third-party financing company like Powesco takes charge of the initial investment: purchase of new, high-performance equipment, energy-efficient renovation, and modernization of systems.
- The beneficiary repays the third party through energy savings achieved over a defined period: an energy performance contract (EPC) can be concluded to guarantee the achievement of energy savings.
It's a true win-win partnership!
By choosing Powesco, you benefit from third-party financing of the ESCO, meaning we are committed to results. You don't finance the work: we do it for you, and we are only paid if the savings are real.
What is the difference between third-party financing and third-party investment?
Although similar, these two systems differ in terms of project management:
- Third-party investment: the third party finances the project (e.g., solar panels) and ensures its operational management (e.g., maintenance), but does not intervene in the project management (e.g., execution of the works).
- Third-party financing: the third party finances the project, ensures its operational management and participates in the project management.
In other words, with third-party financing, Powesco goes even further and intervenes in all phases of your project : upstream (strategy), during the project (operational) downstream (optimization of existing).
Why implement third-party financing?
There are many reasons!
Addressing economic and financial challenges
The cost of an energy efficiency project can hinder its launch. Third-party financing removes this obstacle by eliminating the need for upfront payments.
Thus, third-party financing makes it possible to:
- preserve your cash flow
- preserve your investment for other priorities
- adapt your spending to your usage and the lifespan of the equipment
Addressing technical and productivity challenges
Some energy efficiency projects are particularly complex . Third-party financing allows you to benefit from comprehensive support from experts :
- technical engineering: knowledge of regulations (tertiary decree, BACS, LOM law), project management;
- Financial engineering: financial structuring, calculation of energy savings, energy brokerage, etc.
Addressing environmental challenges
Third-party financing makes it possible to deploy projects leading to a reduction in energy consumption.
This also mechanically implies:
- a reduction in carbon footprint through the definition of the carbon trajectory
- compliance with environmental regulations (carbon footprint, ESR )
- an improvement in the beneficiary's brand image
Third-party financing for whom?
Third-party financing is available to both the public (local authorities) and private, including:
- The tertiary sector : financing of equipment related to distribution (BMS, refrigeration, HVAC, LEDs, charging stations for electric mobility, photovoltaic panels)
- Industries : utilities support, industrial boilers, chillers, air handling units, air compressors, variable speed drives
- The healthcare sector: advance funding for IT and digital technologies (electronic labels, PCs, lighting, servers, screens, medical equipment), energy-efficient renovation of hospitals
Third-party financing is now a strategic response to the economic, regulatory and environmental challenges faced by energy-intensive businesses and communities.
Powesco pre-finances the work in return for the payment of royalties over a period of 5 to 10 years while committing to the resulting energy savings or avoided costs.
Act now, without waiting for available funding. Get your energy savings financed!
