A short cut to financing for energy transition

When two companies with complementary activities rub shoulders on a daily basis on the same site, it stands to reason that they get to know each other, are maybe even attracted to each other, and things follow their natural course. So it has been for Climate Services and Amos Advisory, whose newly created company is now signposted on the bluefactory chimney. Welcome to Lending4Impact.

Climate Services SA carries out CO₂ assessments, analyses the risks and opportunities of transitioning to a low-carbon economy, and provides strategic and practical advice for such a transition. Amos Advisory offers sustainable financing advice to institutions looking for ecological and socially responsible solutions for their investments. Each of these consulting firms is thus at one end of their respective value chain. In between is the client company, with its energy efficiency needs and options for financing them. Based on this observation, Amos Advisory and Climate Services have decided to set up a crowdlending platform connecting companies and investors to finance energy transition projects.

According to Werner Halter of Climate Services, there is a real business need. “We know that projects for CO₂ emission reduction or renewable energy production have a five- to ten-year payback horizon, which is relatively long. Companies are reluctant to use their own funds for something that is not directly related to production. These projects are therefore never a priority for them, even if the energy savings and ROI [return on investment] are interesting.” Philippe Spicher, from Amos Advisory, adds, “Companies are struggling to find financing for their energy efficiency, CO₂ emission reduction and renewable energy development projects, especially from banks, which have not yet fully understood the challenges and opportunities that may arise. This is where our joining forces with Werner is interesting, because investors are increasingly looking for truly sustainable investment solutions, and not just what can be found on the stock market. Indeed, while there has been an explosion of ESG investments [based on the environment, social responsibility, and governance] in recent years, many approaches remain superficial, even cosmetic. Our new platform fills this gap, providing a link between these investors and companies.”

Lending4Impact is now on the launch pad. The first projects for presentation on the platform are being selected and communication initiated with potentially interested investors. These are concrete projects, such as the financing of photovoltaic infrastructure or hydrogen vehicles. The project’s sustainability is certified by Lending4Impact, who also calculates the amount of financing, its duration, and interest rate.

Among investors targeted are individuals as well as institutional investors, such as foundations, pension funds and investment funds specialising in impact debt. Sometimes these are institutions that are committed to reducing the carbon footprint of their investments and cannot find enough opportunities to do so in the markets. Companies, on the other hand, can face more restrictive obligations. Within the framework of the Energy Act, they have drawn up agreements on targets with the cantons. These include lists of measures, some of which are mandatory, if they are profitable in three years,

By combining supply and demand in the green financing market, Lending4Impact matches two needs. Their approach also reflects a new reality, namely the need to develop new economic models to make ecological transition a reality. “From a technical point of view, we have everything we need to make this transition,” says Werner Halter. “It is the implementation that is falling short, usually for financial reasons.” Lending4Impact makes this implementation possible thanks to establishing contacts between companies and investors, as well as providing analysis and advisory services. With this tool, a company can invite its executives, suppliers or customers to participate in the financing of its projects, and thus stay as close as possible to its sources of financing. “What we are proposing corresponds to a kind of short cut to financing,” concludes Philippe Spicher.