International ESCO Symposium 2025 – Spotlight on the ESCO from a Development Perspective

Moderated by Mark Lister (Chair, Efficiency Valuation Organization and Co-CEO, Asia Clean Energy Partners – Australia), this session explored how ESCO models are being supported and scaled in developing countries and conflict-affected regions. The panel featured development institutions and financiers who shared their strategies for enabling ESCO markets through policy, finance, and technical assistance.

Key Insights by Speaker

Anna Zhovtenko – Project Manager, Energy and Environment Portfolio, UNDP, Ukraine

• UNDP has supported Ukraine’s ESCO market since 2015, even amid war and energy infrastructure destruction.
• Achievements include the launch of 125 ESCO contracts worth $35 million, including 75 solar ESCO projects.
• Developed two innovative financing mechanisms:
  • Concessional loans with interest rates of 3–9%.
  • Reduced collateral requirements and portfolio guarantees.
• ESCOs have played a critical role in ensuring energy resilience for hospitals and water facilities during wartime.
• UNDP encourages international ESCOs to enter the Ukrainian market now, not post-conflict.

Sören David – Head of Technical Support Unit, Mitigation Action Facility (MAF), Germany

• MAF provides €5–25 million in grant funding for ambitious mitigation projects in energy, industry, and transport.
• ESCO-related projects must demonstrate:
  • High ambition (e.g., industrial heat, not just LED lighting).
  • Feasibility and scale, with total project sizes of €60–100 million.
  • Institutional readiness and technical capacity.
• Successful examples include:
  • Brazil: ESCOs supporting industrial heat for SMEs.
  • Mauritius: Development of an ESCO guarantee facility.
• Emphasized the importance of standardization and bundling to overcome small-ticket financing barriers.

Şule Kılıç – Deputy Head, European Bank for Reconstruction and Development (EBRD), Türkiye

• EBRD has invested over €22 billion in Türkiye, with a strong focus on green and climate-aligned projects.
• ESCO engagement began with:
  • Support for Türkiye’s National Energy Efficiency Action Plan.
  • Development of financing mechanisms and policy dialogue with the Ministry of Energy.
• Key challenges:
  • Small project sizes, lack of standardization, and limited technical capacity.
  • Low awareness of energy efficiency as an investment opportunity.
• EBRD supports ESCOs through:
  • Technical assistance, indirect financing via Turkish banks, and green economic financing facilities.
  • Emphasis on capacity building, measurement and verification (M&V), and standardized products.

Common Themes and Takeaways

• Financing remains the biggest barrier, especially for small-scale projects in developing countries.
• Standardization, aggregation, and guarantee mechanisms are essential to unlock investment.
• ESCOs are critical for energy security, especially in crisis contexts like Ukraine.
• Awareness and capacity building are key to scaling ESCO adoption.
• Development institutions are increasingly focused on ambitious, scalable, and replicable ESCO models.

Conclusion

The session highlighted the growing recognition of ESCOs as essential instruments for delivering energy efficiency and climate resilience in developing and conflict-affected regions. Through the experiences of Ukraine, Türkiye, and global development institutions, it became clear that while the ESCO model holds significant promise, its success hinges on a combination of enabling policies, accessible financing, technical capacity, and market trust.

Speakers emphasized that standardization, project aggregation, and innovative financing mechanisms—such as concessional loans and guarantee facilities—are critical to overcoming the barriers of small project sizes and limited investor confidence. The role of ESCOs in ensuring energy security, particularly in crisis contexts like Ukraine, was underscored as a powerful example of their broader societal value.

Ultimately, the session called for greater collaboration, knowledge sharing, and institutional support to scale ESCO markets globally. Development partners, financiers, and governments must work together to create the conditions for ESCOs to thrive—not only as service providers, but as strategic partners in achieving sustainable development and climate goals.