BASE is partnering with the Energy Engineering Company Société d’Ingénierie Énergétique (SIE), Morocco’s super ESCO, to expand the benefits of its flagship Energy Savings Insurance (ESI) model to the Moroccan market. 

BASE was engaged in the project by the Climate Emergency Collaboration Group (CECG) to offer its expertise with the development and implementation of ESI and bolster the Moroccan Government’s efforts to transition towards energy efficiency. With the support of the British Embassy in Morocco and the CECG, the SIE mobilised a donation from the Rapid Response Facility, an initiative of the COP26 Energy Transition Council, for tailoring the ESI model to a new country context.

BASE and SIE held a kick-off meeting to define the objectives of the initiative, the actions to be implemented, assign roles and responsibilities, agree on the intended impact, and create a collaboration framework for the various stakeholders involved in the endeavour of deploying ESI for the benefit of small and medium-sized enterprises (SMEs) in Morocco. SMEs play a strategic role in economic growth and development globally. They are a vital part of the Moroccan economy, representing nearly 98 percent of all enterprises and employing almost 65 percent of the working population. Although individually SMEs consume relatively modest amounts of energy, collectively, their energy consumption is quite significant – around 13 percent of total global, and at least one-third of total industrial energy demand, according to IEA estimates. Therefore, the potential to reduce their energy consumption is considerable but largely remains untapped. 

SMEs have a high-risk perception of investments in energy efficiency, and there is currently a lack of adequate risk mitigation mechanisms. Many barriers inhibit SMEs from investing in EE, including low-investment priority and high-risk perceptions related to EE equipment and a lack of trust between the different stakeholders involved. 

The ESI model comprises financial and non-financial elements designed to build trust and credibility among key actors and reduce the risk for SMEs to invest in energy efficiency. The model consists of four main elements: a standardised contract, energy savings insurance, technical validation, and financing structure. 

The project involves working closely with three key stakeholder groups: technology providers, who supply EE solutions and therefore become a critical driving force of the model; the business and SME sector as the demand side for EE projects and financing; and banks and credit guarantee institutions that help businesses access to finance and mitigate risks. The ESI model concerns many technologies, among which are: lighting systems, motors, compressed air, boilers, refrigeration, heating, air conditioning, solar panels, and solar water heaters. Together, these factors create favourable conditions for SMEs and other businesses to replace old inefficient technologies with new EE technologies.

With expert support from BASE, the SIE will coordinate this project in Morocco in its role as Super ESCO, in line with its mission to support the national ecosystem of the EE sector. Their involvement will help coordinate the stakeholders’ commitments, launch the first pilots, and ensure that the model is appropriately understood by local businesses through specialised training. All projects resulting from this partnership will be facilitated in connection with the national Monitoring, Reporting, and Verification (MRV) System, developed by the SIE in consultation with the Ministry of Energy Transition and Sustainable Development.

Commenting on the pertinent and timely nature of the project, His Excellency Simon Martin, UK Ambassador to Morocco noted, “The world is facing catastrophic climate change and a profound energy transformation, and we have no time to waste in taking the necessary action. Thanks to the Energy Transition Council, our joint and coordinated work in Morocco, with ministries, agencies SIE and BASE, donors, development banks and international partners has made it possible to share expertise and support the design and implementation of new models to accelerate the transition to clean, affordable, and resilient electricity systems as part of a green economic recovery from the global pandemic.”

“With our partners and the support of the Ministry of Energy Transition and Sustainable Development, we are leading the charge to make available to the market, in particular private SMEs, a new model which aims to build more trust in energy savings projects in Morocco. We hope that this initiative will be embraced by the market and convince businesses of the need and usefulness of creating a national EE ecosystem,” says Ahmed Baroudi, Director General of the SIE.

“We can only persuade SMEs to invest in EE and generate a continuous pipeline of bankable projects by improving the risk-return profile of EE projects. The ESI model presents a proven and unique, market-based approach that uses commercial channels and instruments already available on the market to overcome the barriers associated with EE projects,” notes Daniel Magallón, Managing Director at BASE.

More information and updates to be shared soon, stay tuned!

About the BASE Foundation

BASE is a Swiss non-profit foundation and a specialised partner of the United Nations Environment Programme. BASE builds bridges between sectors and actors at the crossroads of climate solutions, finance, and international development. BASE fulfils its mission by providing services in the following three areas: Financial mechanisms and business models; Green financing programs for financial institutions and others; Knowledge products, and exchanges.

About the SIE

The Energy Engineering Company is the Super ESCO implementing energy efficiency projects in Morocco. Its primary mission is to support public and private actors in implementing energy efficiency projects and contribute to achieving the National Energy Efficiency Strategy’s (SNEE) objectives, mainly via the exemplarity of the State in terms of EE.

About Rapid Response Facility 

During the second ministerial meeting of the Energy Transition Council (ETC) of COP26, which brought together 22 countries, as well as multilateral development banks, intergovernmental organisations, and climate funds, the “Rapid Response Facility” (RRF) was launched by the UK to provide a wide range of technical assistance to developing countries, such as strategic planning, capacity building and technical expertise.

Contact

BASE: aurelien.pillet@energy-base.org

SIE: rita.aouad@sie.co.ma