Green Credit Lines
MACS Green Credit Line Management is a comprehensive package for the effective planning, successful implementation and accurate reporting of RE/EE and resource efficiency credit lines. This package is adapted to the applicable policies and guidelines of major International Finance Institutions (IFI).
The Concept of an easy to handle ECO loan product
Our methodology allows us to support the Partner Financial Institutions (PFI) to introduce a new Eco loan product or further develop existing green loan products, without major interference in the bank’s standard procedures. After the product introduction the PFI will be able to handle green loans as any other loan product. Contrary to traditional approaches, which determine resource savings potentials and CO2 emission reduction thorough extensive audits, our approach is to cluster where possible green measures into standard loan products, which eases the handling of the credit line enormously, reducing transaction costs and additional work.
Plug in of green specifics into existing procedures
Through clustering green measures into standard loan products, the eligibility of such investments under IFI re-financed credit lines can be established ex-ante. The PFI’s well established credit policies regarding corporate clients, SME’s and private households, as well as existing and appropriate internal procedures with respect to project appraisal, evaluation of debt and payment capacity, securities and loan approval allow us to simply plug in our methodology. In fact, the “plug” is provided by a calculation and reporting tool (eSave), which does all relevant calculations and data processing automatically in the background of the existing loan appraisal procedure.
Calculation Approach to quantify greenhouse gas (GH) impacts
Standard Measures rely on a few and easy-to-understand input parameters. These might be either some physical parameters such as the m² and thickness of a new wall insulation, the capacity of a new condensing boiler, or the area of a new solar thermal collector. Besides physical input parameters, also so-called energy labels are used, eg class A for a household appliance, an air conditioner, or even an entire apartment or building if a robust EPC (Energy Performance Certification) system is in place in the host country. These input data are connected with an elaborated database of emission factors and other parameters and is aligned with the IFI’s harmonized standards and approaches for quantifying the greenhouse gas (GHG) impacts of investments.
In order to verify recourse savings, the resource consumption after implementing the measure has to be compared to a baseline, which is the resource consumption of the device that is replaced or could be also e.g. EU average. As individual checks tend to be cumbersome and are furthermore subject to moral hazard problems, we set baselines by a periodical plausibility checks, based on enquiries or by identifying average technology levels on the market.
Mainstream Product and current Measure Groups
The standardization and simplification of green specific calculations paves the way for massive outreach of green loans through mainstreaming products. This is easiest to be explained by the example of modern energy efficient consumer products, where the energy specific input parameter are part of the product’s technical specifications, easy to obtain in the products operation manual. Hence, by applying our methodology, this Eco loan can be granted almost like any other retail loan. The concept can also be applied to corporate loans or SME loans provided that suitable standards can be defined (heating systems, insulation, etc.).
Standard calculation modules are available for buildings, photovoltaic systems, thermal solar systems, lighting, electric household appliances, ari-equipment, aircrafts and for some industrial processes.