3FOOD

Third Industrial Revolution Consulting Group
the debt on their books – they have only an obligation to provide payment for delivered
services. Paying off investments through monthly or bi-monthly billing cycles (much like a
power purchase agreement but now for savings), is typically more attractive to the private
sector. However, overall, the second variant is less capable of unlocking very aggressive savings
opportunities.
Program Mechanics of the LuxSEF Guaranteed Energy Savings Variant
In Figure 7 the right hand side of the illustration notes several contractual agreements: a) a
guaranteed energy savings agreement (GESA), b) a performance based program agreement,
and c) an Installment Payment Agreement. To provide insight into LuxSEF functioning as
described throughout this document, it helps to provide the various program steps that makes
up the guaranteed energy savings financing window:
1. First, the LSDFP performs its communication and aggregation function. This includes
surveying potential project promoters (both public and private) that are interested in
participating in the LuxSEF program. Interested public and private project promoters
sign a non-binding letter of interest (LOI). This group represents the pool of participating
organizations that will enter into the various contractual arrangements with the ESCOs
and the bond issuer.
a. A separate element not shown in Figure 7 is that the LSDFP, if properly enabled,
could perform a pre-qualification of ESCOs that can participate in LuxSEF. Such
pre-qualification raises participating organizations’ confidence in the program.
Pre-qualification of ESCOs furthermore facilitates a smooth roll-out of the
program.
2. Participating organizations select one of the prequalified ESCOs – facilitated through
technical assistance and advice from the LSDFP –to perform a no-cost, pre-contract
audit. The selected ESCO presents an initial proposal based on the pre-contract audit.
This step provides participating organizations insight into their energy consumption
patterns and identifies potential saving and renewable energy opportunities.
3. Next, the participating organizations enter into Guaranteed Sustainable Energy Savings
Agreements (GESAs) with the selected ESCOs. GESAs describe conservation services and
onsite clean energy generation services and defines service performance guarantees. All
guarantees are expressed in monetary amounts.
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