Transformative 81281441-Investments for Industrial Energy Efficiency (TI4E) in Brazil

In Brazil, industries are responsible for 33% of the country"s final energy consumption and approximately 9% (185 MtCO2e) of the country"s GHG emissions in 2017. Going against global trends, Brazilian industries have become increasingly energy intensive in the last decade, meaning its energy efficiency (EE) and greenhouse gas (GHG) emission mitigation potentials are largely untapped, especially among small and medium-sized enterprises (SME). This also applies to other sectors. Brazil"s EE market is promising, but held back by a number of barriers which can be categorized as: (i) Those limiting the demand for EE products and services including lack of awareness and lack of regulatory incentives; (ii) limited capacity of energy service companies (ESCOs), consultants and suppliers to generate and service a pipeline of investable, low-risk EE-projects; and (iii) limited attractiveness of existing public and private financial mechanisms due to financial institutions" perceived risk and above all excessive collateral requirements. The NAMA Support Project "Transformative Investments for Industrial Energy Efficiency" (TI4E), implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), aims to address these challenges in a holistic manner to deliver a transformative push to Brazil"s EE market. Technical assistance and de-risking mechanisms shall enable the mobilization of capital for EE investments in industrial SMEs at scale, saving on fossil fuel consumption and unlocking an emissions reduction potential of approximately 1.1 million tons of CO2 equivalents. TI4E has got the ambition to not only foster EE investments through public interventions, but also to pave the way for the EE market to attract finance from private investors, establishing EE as an investable asset class. As such, TI4E contributes to the achievement of Brazil"s Nationally Determined Contribution (NDC) under the Paris Agreement on climate change. In São Paulo State, the largest manufacturing hub in South America, TI4E will raise awareness of several thousand SMEs through a broad marketing campaign; build capacities of local EE consultants through the Brazilian National Service for Industrial Training (SENAI); de-risk projects by building an energy technology list (ETL); provide partial subsidies to the provision of high quality energy audits in industrial SMEs and for the provision of implementation support to SMEs which are expected to invest in high-impact EE interventions; set up a Guarantee Fund with Desenvolve SP, the State Development Bank of São Paulo, to reduce collateral requirements in such investments and mobilize private financing. On the national level, TI4E will advise the government on new policies and support the Brazilian Development Bank (BNDES) to develop new financial mechanisms to scale up EE financing significantly. GIZ intends to contract a service provider to advice on EE investment projects in industrial SMEs, perform and further develop validation procedures for such investments, extend the ETL and link it with an existing accreditation system for technology providers and support the scale-up of TI4E"s approach to unlock EE financing in other regions and sectors in Brazil. Through GIZ the contractor will interact and directly support several Brazilian institutions. The services of the contractor fall under (i) the commission of the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) and (ii) the Joint Action between BMU and the European Union to implement TI4E as part of the NAMA Facility.