3FOOD

Third Industrial Revolution Consulting Group
With the recent signing of the COP-21 Paris Agreement on climate change, the green bond
market can be seen as entering into a new stage where policy drives market growth. This is in
contrast to a) the first stage of the green bond market (roughly 2007-2011) where, especially
multilateral development banks assured market growth and b) the second stage of the market
(roughly 2011-2014) where investors and intermediaries became primary drivers of market
evolution. The market is growing rapidly: the London-based Climate Bonds Initiative, for
instance, catalogued a $41.8 billion market in 2015 while issuance was already at $23.2 billion
(as of May 2016) and expected to reach $100 billion by the end of the year. 251
1.2.3.3 Luxembourg ESCO Market
The ESCO market in Luxembourg will require further refinement. The 2014 Joint Research
Centre (JRC) study on the European ESCO market, for instance, notes that “information about
the [ESCO] market or the companies working in Luxembourg is difficult to find. The ESCO
market is not active, and the latest reliable information is from 2007, when 3-4 foreign
companies were found to offer energy service solutions for Luxembourg”. 252 While data is
scarce, the Third National Energy Efficiency Action Plan (NEEAP) outlines that the ESCO market
in Luxembourg is experiencing growth and sees the potential to develop the energy services
market as ‘high’. The document also notes that pilot energy saving contract projects are
underway. Overall, however, it appears that further development of the energy services
market, in particular the development of ESCOs capable of participating in an SEF program at
the proposed scale might be required.
To overcome such potential obstacles, the Grand Duchy of Luxembourg will need to incentivize
the creation of ESCOs, certify proper training and performance, guarantee early adoption with
the transformation of all government and public buildings into Internet of Things nodes, and
provide government-supported training for thousands of semi-skilled, skilled, and professional
workers that will be needed to transform the Luxembourg building and other asset stock.
Under the vision outlined here, the LSDFP is the one-stop-destination for financial contributors
and project promoters alike. The LSDFP is an innovative public-private partnership delivering
energy efficiency, load reduction, clean energy services, material savings, transportation
investment, digitalized monitoring and verification and a range of other technologies and
collective action strategy, the market will be reliant on further efforts to maintain current standards. Support
policies could be formulated at the EU level to advance the market.
251 https://www.climatebonds.net/
252 Bertoldi, P., Boza-Kiss, B., Panev, S., & Labanca, N. (2014). European ESCO Market Report 2013. Joint Research
Centre Science and Policy Reports. Publication by the European Commission.
284