Energy Cities proposition 17 - Collect local savings and invest them in sustainable local energy projects
Rethink financing solutions
2014
Energy Cities is a network of more than 1,000 cities in 30 different countries. Convinced that energy transition is more than a question of renewable energy or advanced technologies, Energy Cities proposes to use resources in a reasoned way, to strengthen local participation and to improve the quality of life in a democratic Europe. In 2014, the network presents 30 proposals for the Energy Transition of Territories.
They are a source of inspiration to think and act differently. To finally turn the page on unsustainable practices that lead us into energy, climate and perhaps economic and social dead ends.
To download : cahier_short_jan2014_en.pdf (6.8 MiB)
Energy Cities proposition 17 - Collect local savings and invest them in sustainable local energy projects
The problem at hand
Local actors’ traditional financial resources for energy transition are drying up. Public funding is becoming rare and banks, who are supposed to provide alternative solutions to public financing, are short of funds. Learning that their savings have been used for feeding international speculation rather than local jobs has undermined citizens’ trust in banks. The amount of savings potentially available at local level, however, still represents a significant share of wealth, but it is not sufficiently invested locally.
The term “short distribution channels” is used for both food (increasing local production) and energy (local renewable energy). We must now invent “short bank channels” that reinstate traceability between the savers and the local energy solutions their money is to finance. It is a new opportunity for financing projects and restoring confidence between lenders and borrowers, working in close co-operation.
Proposal
Make bank loans accessible to territorial investors: households, housing companies, small energy producers.
This could be done via a local savings bank, a co-operative/ethical bank or a traditional bank willing to earmark part of its savings for local projects. Citizens are already offered the possibility of supporting local authorities by insulating their dwellings or using their bikes. Why not give them the possibility of using their savings for financing local projects? This would be good for social and territorial cohesion, wouldn’t it?
Conditions for success
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Demonstrating local public willingness to seek new solutions to the problems encountered.
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Ensuring good relations between local authorities, SME representatives, bank organisations and groups of citizens.
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Encouraging citizens’ initiatives and communicating on alternative solutions.
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Offering an attractive yield as well as acceptable borrowing conditions.
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Improving the transparency of (and advertising) the savings-financing channel.