How did revolving funds for energy and climate evolve in recent years?
In the summer of 2012, the Dutch agency AgentschapNL did an inventory of the existing revolving funds for energy and climate change, listing their degree of activities and how they have been developing. A revolving fund is defined as a public fund used to finance projects of social interest. In 2013, it requested Trinomics (then Triple E Consulting) to update this inventory with the main question being how these funds had evolved in the meantime.
The project consisted of carrying out interviews with people directly involved with these funds, including their managers. These funds are owned by the governments of the Dutch provinces and in some cases by the municipalities.
Key findings of the research can be summarised as follows:
- Almost all provinces and large municipalities have set up or plan to set up a revolving fund for energy and climate change. Some of the existing ones are still not operational.
- Setting up such a fund often takes more than 2 years.
- Funds can make use of diverse financial instruments: usually they perform lending and borrowing operations (77% of the cases). More than 50% also offer financial guarantees.
- Most funds have rules that limit their participation in a project to a maximum of 50% of the investment.
- In various cases, political pressure seems to work towards increasing the fund’s expenditures. This can have negative consequences on financial performance, as quality of projects may be overlooked.
- Some funds (like the one Amsterdam and North Holland) intervene in overlapping geographical areas. It is important to specify their realm of action in order to increase the efficacy and efficiency of their interventions.