As per the various discussions conducted by BEEP-RE team with various stakeholders: Lack of business models and access to finance were crowned as the major limitations for implementation of RE technologies in buildings. As part of the programme, BASE (an expert agency in the development of business models) is developing business models and financial and not financial instruments to facilitate the transition towards renewable energies in buildings. BASE had a first consultation round table the past April to validate business models and financial instruments options such as an OPEX model, and guarantee fund, among others. Considering the result of the consultations, BASE would like to explore the feasibility of proposing further assistance to SDC to develop a payment guarantee.The development of business models is a highly consultative process. The activity was adversely impacted due to COVID situations.

Based on the outcomes of the initial consultations, the BASE team has come up with Draft business models. During the current reporting period, the project team conducted detailed consultations with technology providers, financing institutes, and building projects. These consultations were structured bilateral meetings involving the presentation of draft business models and carefully noting down the suggestions and apprehensions of stakeholders towards each model.

Following models have been proposed by the project team:

• Opex/Leasing
  - Build capacity in Opex/Servitisation / leasing /PPA. NOT ONLY Solar but other tech
  - Standardise OPEX contractual arrangements Provider – Client
  - Raise awareness on different types of financing structures
  - Standarise digitalization solutions for these projects
  - Raise awareness risk mitigation instruments
  - Case studies, informative videos
  - Organise this capacity building in an association or alliance that helps to build capacity and
  advocates for this type of contracts
• Credit Guarantee
  - Dedicated Credit Guarantee to support Technology Providers
  - Portfolio focused / Not project focused
  - Attractive for Banks; low cost, efficient to claim,
  - Co-sharing risks and responsibility to recover loan; awarding banks with low or zero claims
  - Adapting risk coverage according to technology maturity in the market
  - The credit guarantee should work as a first loss guarantee
• Payment Guarantee
  - Payment Guarantee to reduce the risk perception of FIs towards nonpayment of RE finance
  - Attractive for Banks; low cost, efficient to claim
  - Adapting risk coverage according to technology maturity in the market
• Mainstreaming RE credit process
  - Provide technical assistance to banks to be able to minimize transaction costs and requirements,
  in order to reduce interest rates and evaluation periods.
  - Engage sales force – credit officials
  - Appropriation
  - Standardise internal operating processes. Build an internal categorization/ labelling system
  - Build capacity of credit officials
  - Align incentives
• Secondary Market
  - It is key to find way to build a secondary market that Financing Institutions can use to recover
  loan defaults from the sale or reallocation of the systems
  - Platform (or as part of the OPEX alliance activities) that:
  - Analise legal mechanisms to recover system
  - Build partnerships Banks - Providers for the reallocation or sale of the RE systems.
  - Pricing depreciation analysis