Energy efficiency presents enormous investment opportunities for businesses with significant potential to reduce greenhouse gas emissions, especially in developing countries. However, many development programmes targeting energy efficiency have struggled to catalyse the market, which is one of the main reasons is that energy efficiency is not a priority.
The concept of “energy efficiency” can be challenging to sell: it requires providers of technologies like air conditioning or boilers to change the way they approach businesses. Instead of merely selling new technology, a provider needs to sell a promise of future energy savings that should be high enough to justify the investment.
The project aimed to trigger a paradigm shift in public procurement policies for goods and services, enabling the adoption of energy efficiency by prioritising long-term savings and environmental benefits over the lowest initial cost. Undertaking this change typically faces key barriers, including the perceived risk of adopting newer technologies, the higher upfront costs, and the lack of visibility of short-term savings, which often discourage decision-makers. To address these challenges, the initiative focused on capacity building, policy reinforcement, and practical demonstrations. Through collaboration between MINAE, UNEP’s United for Efficiency (U4E), and the Global Environment Facility (GEF), the project promoted a Total Life Cycle Cost (TLCC) approach, ensuring that procurement decisions accounted for both initial investment and long-term operational savings.
To demonstrate the effectiveness of this approach, three demonstration projects were carried out in public buildings: (1) at a geriatric hospital, where eight air conditioning units were replaced to improve efficiency and reduce cooling-related expenses; (2) at a second hospital, where obsolete lighting was replaced with high-efficiency LED fixtures, resulting in lower electricity consumption and improved lighting quality; and (3) at a municipal wholesale market, where a modern refrigeration chamber was installed to enhance cold chain efficiency, reducing food spoilage and energy waste.
As the installation work was completed in 2024, these projects are already showcasing significant energy savings and reduced operational costs while, most importantly, providing measurable evidence supporting the benefits of energy-efficient technologies. By embedding these results into procurement policies and strengthening monitoring and evaluation mechanisms, the initiative established a replicable framework that encourages the adoption of energy efficiency in public infrastructure investments across Costa Rica.
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