Argentinian Network of Municipalities Step Up Sustainable Purchasing

Location: Multiple locations

Population:  N/A

Climate: N/A

Duration: 2018-2021

Sector: Lighting

Funding sources: Public

City Networks: C40

Savings: 45% in energy consumption

Solutions: The establishment of the trust fund to bundle energy efficiency projects (source).

Multiple benefits: energy and economical savings.

To combat climate change, a network of Argentine municipalities (RAMCC) sought assistance in 2018. More specifically, they required a way to carry out major, high-quality, cost-efficient environmental purchases. They ultimately decided to work with the Buenos Aires-based law firm Beccar Varela to create, organize, and implement  the agreement.

Objective – To establish an effective instrument for accelerating the implementation of energy efficiency projects (source).

Solutions –  It all started when a 10-year-old network of 224 municipalities in 18 regions in Argentina sought a legal structure to finance environmental projects (there are approximately 2,000 municipalities in the country). To that purpose, a legal team of eight municipalities at Beccar Varela designed a legal structure that would allow the municipalities to share funding and achieve their goal. They completed their first project, an endeavour to install LED street lighting, in 2020, and there are six more in the works.

As a result, they developed a trust, known as the RAMCC Trust, to be managed by an independent bank, through which municipalities could make project proposals and arrange for finance. Each municipality would contribute money to the trust for maintenance, with additional funds only going to special projects of interest. The quantity of contributions would be determined by each entity’s size, population, and financial capabilities. The structure could also allow for funding from other sources, such as donations or endowments.

They also developed a three-layer governance framework to guide participation. Every year, all municipalities gather to discuss key financial issues. Also, a board of eight mayors approves projects. Finally, there’s an executive committee of technical officers from the network that’s in charge of daily management.

As per June 2021, 24 municipalities have joined the trust.

Funding – The trust fund allowed municipalities to seek bids from potential providers for the first project in 2020, which ended up costing roughly AR$12,000,000, or around $200,000 in US dollars at the time of the project’s date. Technical advisors were also funded by an EU agency.

Innovation – The remarkable initiative to bundle LED luminaire purchases demonstrates the innovative responses to climate change at the local level. Despite the urgency, international help for the acquisition of sustainable technologies is sometimes sluggish to materialize, while local governments face the repercussions of climate change (source).

Success factors – 1) The trust fund. The first municipalities’ trust fund to promote climate action, served as a vehicle to gain the support and transparency needed to promote investment at a sub-national level (source). 2) Ease on legal restrictions. With the trust, the trustee gets the financing and makes the purchases. As a result, the municipalities can avoid those legal restrictions, since they receive the product as beneficiaries of the trust, avoiding any liability with suppliers or creditors. 3) Project bundling. By bundling together, the municipalities would get a better price and higher quality.

Significant outcomes:

• The communities saved 45% in energy consumption, translating to a reduction of 239 MWh/year and 110tCO2e less per year.
• The cost for the municipalities was about 40% less than it would have been otherwise.

Synergies with local policies:

• Energy Efficiency Law, resulting from the Program of Energy Efficiency in Public Buildings, aims at incorporating more efficient technologies for street lighting and traffic lights;
• This project is a part of 2014 Plan for the Conversion of Public Street Lighting (Plan de Reconversión del Alumbrado Público);
• C40 member city;
• ICLEI member city.

Political alignment:

• National Action Plan for Energy and Climate Change

Marketability:

Strong.