Clean cooking and energy efficiency will both play a crucial role in the external dimension of the European Green Deal. A half-day session at DEVCO Environment & Climate Week highlighted the strong need in both sectors to increase access to finance, support viable business models, de-risk investments, create competitive markets and improve the regulatory environment. On clean cooking, the EU will mainly support private sector-driven business models for clean or sustainable solutions, with a priority on urban areas and preferably tackling the entire value chain. On energy efficiency, the EU will help partner countries to set up ‘Super ESCOs’ (energy service companies), publicly owned entities that coordinate, streamline and implement public sector-focused energy efficiency actions.

The clean cooking session highlighted some of the main barriers to these technologies being adopted: access to finance by manufacturers, distributors and consumers, lack of viable business models, flawed or non-existent regulatory and policy frameworks, and lack of consumers’ ability to pay. Participants discussed the applicability of cooking technologies. Liquefied petroleum gas (LPG), a cooking fuel considered clean by the WHO and Clean Cooking Alliance, was a major topic of discussion. LPG emits greenhouse gases but compares favourably to many other cooking fuels used in developing countries and so could be considered a legitimate temporary solution in the transition from dirty to clean and sustainable energy, in certain cases.

The session highlighted the strong need for support to access finance by the private sector and to help develop viable private sector-driven business models and sustainable value chains. De-risking financial instruments, results-base-finance and other financial schemes in the clean cooking sector can play a crucial role to boost market penetration and make solutions affordable to all. It is key to ensure that regulatory and policy frameworks are set in place to allow the clean cooking sector to scale up. Experiences shared by EU Delegations showed there is no one-size-fits-all solution, and a pragmatic approach that takes account of local context and each case’s specific circumstances is necessary.

The energy efficiency session presented the main obstacles in the sector, including a low capacity of beneficiaries to pay for upfront cost of energy investments, limited technical knowledge of beneficiaries, high transaction costs for small-scale investments and low mobilisation of local finance.

The EU presented its upcoming strategy to support the development of ‘super-ESCO’ (energy service company) business models. A Super ESCO is a publicly owned and commercially operating project developer, capacity builder and investor. It is set up by the government and targets the public sector (hospitals, schools, municipalities, public buildings, street lighting and other public facilities). The technical work is carried out by private energy service companies (ESCOs). The EU will co-finance Super ESCOs in partner countries together with that country’s Ministry of Finance. It can also provide credit lines and guarantees to banks and technical assistance to participating bodies. Super ESCOs can play a crucial role by coordinating, streamlining, overseeing and implementing energy efficiency actions at national level. They can provide capacity building, technical assistance and financing; mobilising fragmented small-scale investments into larger investment programmes with a clear direction; de-risk investments; establish competitive markets for ESCOs; manage tender procedures; develop secure pipelines of projects to attract financing from financial institutions and banks; and manage small-scale projects.