Energy efficiency is a key component of the European Union’s energy policy as it is considered crucial for competitiveness, energy security and to meet international goals on climate change. Reaching the EU targets on greenhouse gas reductions and energy savings, however, requires major investments, including a scale-up of commercial financing.

To address the limited access to adequate and affordable financing for energy efficiency investments, the European Investment Bank (EIB) and the European Commission have jointly developed the Private Finance for Energy Efficiency (PF4EE) instrument. PF4EE operates through private and, to an extend also public sector partner banks that use the instrument to offer preferential energy efficiency financing in their national markets. The instrument’s core objectives are to

  • Make energy efficiency financing a more sustainable activity across European financial institutions; and
  • Increase the availability of debt financing for energy efficiency investments
How does it work?
Each PF4EE partner bank benefits from the instrument’s two key components – the Risk Sharing Facility and the Expert Support Facility – which may be combined with an EIB loan:
Risk Sharing Facility
The risk sharing facility mitigates partner banks’ credit risk when financing energy efficiency projects. The risk protection covers 80% of losses from individual loans, up to a maximum agreed amount.
Expert Support Facility
The Expert Support Facility provides consultancy services to improve partner banks’ understanding of the energy efficiency market, to support them in the development of loan pipelines, and to ease the appraisal of PF4EE financing requests.
EIB Loan
The EIB may provide long-term financing to national partner banks to be on-lent for financing of energy efficiency investments and thus to complement the Risk Sharing Facility.
Management & Funding

The PF4EE instrument was launched in 2014 as a joint initiative between the European Investment Bank and the European Commission. The instrument is managed by the EIB and funded by the European Commission’s Programme for the Environment and Climate Action (LIFE Programme) under the Directorate General for Climate Action.

Through the LIFE Programme, the European Commission has committed EUR 80 million to fund the instrument’s credit risk protection and expert support services. The EIB leverages this amount, making a minimum of EUR 480 million available in long-term financing

Target beneficiaries and sectors

Through PF4EE, projects in various target sectors can be financed. 

Energy efficiency in existing buildings
Investments which improve the energy performance of an existing building, either relating to the building envelope or to the building’s technical system.
Cogeneration of heat and power
Investments which promote the simultaneous generation of heat and electricity and thus allow for a more efficient use of fuel.
Energy efficiency in public lighting
Investments which reduce the energy consumption of public lighting systems through the installation of highly efficient lighting technologies, such as LEDs, sensors, monitoring systems.
Energy efficiency in industry
Investments which improve the energy performance of industrial processes, industrial equipment or an industrial facility.
Renewable energy in existing buildings
Small-scale renewable projects where the energy produced is mainly intended for self-consumption and where the measure is implemented in relation to an existing building.
District heating and cooling
Rehabilitation measures which improve the energy performance of existing centralised district heating and cooling systems.