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2.11 Green Building Financing Roadmap
The private sector – developers, property management,
finance
Creating a market for energy efficiency
Though GFA incentives are indeed very
attractive, they are only applicable to
new buildings. However, the bulk of this
roadmap depends on the upgrade of
existing buildings. Therefore, a number of
alternative green building financing options
must be considered.
• Financing becomes critical in the second
stage when the bulk of the investment
in physical upgrade occurs. At this
stage, large scale funding through
GFA incentives, funds, loans, ESCOs,
is required. Hence, professionals that
are fluent in green building financing
are certainly needed. The potential
for energy/carbon markets (tax/
rebates/trading) at this stage after a
consistent framework of benchmarking
is established; and
• Establish the business case for
retrofitting – the previous Building
Energy Efficiency Funding Scheme
(BEEFS) allocated HK$ 66 million for 187
buildings. Using this as a reference,
the approximate amount of funding
to achieve the targeted reductions in
existing building will require funds in
the order of HK$ 30-300 billion. It will
be very costly to the tax-payer to finance
these initiatives with government funds.
Hence, it is the most important to
establish a business case such that the
retrofitting buildings can become a self-
sustaining financial proposal.
Financing the market for efficiency
If an adequate business case is established,
retrofits can then be funded by:
• Loans – institutions can provide loans
to building management or developers
specifically for the replacement
of equipment to enhance energy
performance; and
• Performance Contracts – specialised
businesses that provide full service in
installations and financing. The benefits
of the energy savings are specified in
the performance contracts.