The SaveGarant Fund helps entrepreneurs become more sustainable

Expert blog - 4 January 2024

Since last June, StartGreen has been managing the SaveGarant Fund. Entrepreneurs who want to make their business premises more sustainable can turn to the fund for financing. In this blog, Noura Hzami, Investment Analyst at Energiefonds Overijssel, explains how StartGreen contributes to the success of the SaveGarant Fund.

No financial room

Many business owners want to make their premises more sustainable, but do not have the financial room and cannot get a loan from the bank. Since 1 January 2023, owners of an office of 100 square metres or more are even required by law To achieve an energy label C or lower. That means their premises are allowed to use a maximum of 225 kWh per m2 per year of fossil energy. If they do not take sustainability measures, the fine can reach 81,000 euros. In addition, the assessed value of their property goes down considerably with an energy label D or worse.

Other and smaller entrepreneurs are also keen to become more sustainable; partly because they want to contribute to the energy transition, but also to achieve lower energy bills. However, many entrepreneurs are currently too busy trying to keep their heads above water; they are struggling with staff shortages and/or have yet to repay NOW grants. Quite logically, sustainability is not at the top of their priority list.

Social purpose

Precisely to help these entrepreneurs become more sustainable, five industry organisations: VNO-NCW, MKB-Nederland, Techniek Nederland, Bouwend Nederland and NVDE, joined forces and BepaarGarant Foundation established. The Foundation serves a social purpose: to make commercial and social real estate as sustainable as possible. To remove practical and financial barriers, the foundation offers a total package: from an inventory of the possibilities to insight into energy savings and costs. Some entrepreneurs can finance the recommended sustainability measures themselves. If not, they can turn to the SaveGarant Fund.

Off-balance sheet financing

This fund, funded by the Ministry of the Interior and Kingdom Relations and the National Green Fund, offers so-called off-balance financing. Many entrepreneurs have insufficient credit space for sustainability. Thanks to the off-balance structure of this financing, they do not have to draw on their company's credit space, but can enter it as an expense on their profit and loss account. Because in practice, that is often where the bottleneck is.

Repayment is made on the basis of the volume of energy saved by the entrepreneur through the sustainability measures. The energy bill is lower and the entrepreneur pays back the sustainability measures from this space created. After the repayment, the energy costs are also structurally lower.

Years of benefit

Stichting SaveGarant provides the savings service, the owner of the preserved business pays back per kilowatt-hour saved and can deduct the investment from tax. Not every business can save the same amount, but in fact any entrepreneur can qualify. For example, we are now applying to a dry cleaner and see that it can indeed pay off for small business owners. By combining solar panels on the roof with an indoor battery, this entrepreneur aims to minimise the gas consumption of washing machines.

Today, many entrepreneurs are still leaving money on the table because they are not aware of the long-term benefits. Sustainability measures reduce energy costs. So even when you get your investment out, you will still benefit from these measures for years to come. However, entrepreneurs often look no further than two or three years ahead, while the economic lifespan of conservation measures can sometimes be as long as 30 years. The industry associations behind Stichting BespaarGarant actively communicate this to their supporters. And in turn, we bring the story to all the forums we attend.

Made to measure

To manage the fund, the foundation chose StartGreen out of three parties because we have the capacity and know-how. Fit Our Future does account management; they are the field service, so to speak. We are the 'inside service': we do the risk assessment and make sure investment criteria are met. Erhan (Yildiz, Investment Director Transition Fund - ed.) and I provide the funding applications, the investment committee evaluates them. Nienke Rijpstra, Investment Director of Energiefonds Overijssel, sits - alongside Cees Vletter of Vopak Ventures - on the investment committee.

The SaveGarant Fund is right up StartGreen's alley: we are working on sustainability here, serving a social purpose. We also assess financial risks on a daily basis. So it makes perfect sense for StartGreen to do this. Another advantage of StartGreen is that cross-fertilisation is possible here internally. Other funds of StartGreen also do sustainability projects. Customers who cannot turn to one of these funds may be able to be financed by SaveGarant because of the unique nature of this financing instrument.

We have been doing the fund management since June and so far have been mainly setting up the structure and processes. We have developed a model to determine the calculation interest rate. We have also created investment templates so that we have a blueprint for all applications and we can approach risks systematically. This makes it easier for the investment committee to assess applications. Some things are simple tick boxes: you have to have checked those, others require more research work.

Energy advice

Currently, the first applications are coming in. There is a well-filled pipeline of preliminary applications at the foundation itself, but not all of them are with us yet. This is because before they come to us, the entrepreneur must have independent energy advice. Consultants come to check whether the intended measures are realistic given the situation, size and location of the building, so that the intended savings can actually be achieved. Such advice costs money. Sometimes local subsidy pots can be used for this. For example, there are subsidies for heat pumps and solar panels. If these are available, we naturally include them in the business case as well, because they shorten the payback period. Subsidies do not cover the costs, but they are a nice bonus. Tenders must then be requested for the implementers of the sustainability measures.

As a business owner, if you know how you want to make yourself more sustainable, you have energy advice on savings and you know you want to finance the sustainability measures with the Saving Guarantee Fund, the application comes to us. We want to honour a first application as soon as possible and then move on. That is expected to happen early this year.'