
FINANCING
The ESCO model is implemented in accordance with the Energy Efficiency Plan and Program adopted by the Local Self-Government Unit (LSGU) as a legal obligation. Under the Program, LSGUs implement energy efficiency measures and are required to appoint a person or legal entity responsible for energy management and Program implementation.
VERITAS ESCO
Public lighting generates the majority of electricity costs, particularly in smaller LSGUs, and therefore holds a special position in the planning and implementation of energy efficiency measures. Due to outdated and inefficient public lighting, LSGUs must undertake reconstruction or modernization.
Given the lack of funds in their budgets and the current borrowing constraints, LSGUs generally cannot independently invest in new energy-efficient public lighting. However, to modernize/reconstruct public lighting, LSGUs can use non-repayable financial resources from domestic and EU funds and proceed with modernization under the ESCO model.
VERITAS ESCO ENERGY SERVICE ESCO MODEL DOES NOT REPRESENT A NEW BUDGET LIABILITY FOR THE LOCAL SELF-GOVERNMENT UNIT.
This is regulated by the Energy Efficiency Act and the Government Regulation on Contracting Energy Services in the Public Sector.
Financing the implementation of energy services means that the local self-government unit does not need to have or plan any additional funds in the budget but maintains the same budget item for “electricity consumed for public lighting,” split into “electricity cost” and “energy service cost.” Thus, the budget still allocates the same amount for electricity as before, covering the reduced electricity consumption and allocating the remaining savings to pay the energy service provider.
The ESCO company invests its own funds and carries out public lighting reconstruction by applying energy efficiency measures.
The ESCO company guarantees energy savings in advance through a contract. Savings are verified according to the International Protocol and the accepted Regulation and system for monitoring, measuring, and verifying energy savings.
The ESCO company is compensated only up to the amount of the verified savings.
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