HOT|COOL NO. 1/2019 - "District Heating Finance and Economy"


By Torkil Hvam Sørensen, Member of the World Association of PPP Units and PPP Professionals (WAPPP)

THE 2030 AGENDA AND PUBLIC-PRIVATE PARTNERSHIPS The 2013 Agenda for Sustainable Development and the 17 Sustainable Development Goals (SDGs), adopted by all UN Member States in 2015, provided politicians with a new compass for addressing global economic, social and environmental issues, and has set off a myriad of new strategies. In the energy domain, a new strategy for public-private partnerships is currently being spearheaded by the European Economic Commission for Europe (UNECE). Energy is central to the 2030 Agenda, and UNECE is developing a new innovative concept called People-First Public Private Partnerships, which will help finance and develop new renewable energy projects. Although district energy (DE) – district heating and/or district cooling - is not specifically covered in these initial drafts, many related elements, such as solar, wind, geothermal, hydropower, bioenergy and ocean power, are considered. The World Bank is partnering in this endeavour, and with DE projects in the pipeline, e.g. in Ukraine, it is likely that DE projects will be influenced by the 2030 Agenda. There are a number of indicators of this, including the recent announcement by the Investment Fund for Developing Countries (IFU) of a solar project in Ukraine linked to the 2030 Agenda.

This article intends to present the reader with an overview of the new terminology and thinking in the public-private partnership domain emanating from the intergovernmental stage. At present, DE is not mentioned directly but it could affect the political environment surrounding larger renewable energy projects, particularly given forthcoming funding from the World Bank and other donors expected in the foreseeable future. Furthermore, the article will elaborate on the surprising role of China in this endeavour. RECEPTION OF THE 2030 AGENDA The 2030 Agenda was never envisaged to be neither financed nor achieved by governments alone, and with the Agenda came an unprecedented responsibility on the business community to make the world a better place. At present, the Agenda seems to have gained a footing amongst both governments and businesses alike. For example, the Confederation of Danish Industry has launched a two-year project entitled “From Philanthropy to Business”, where companies are supported in designing business models aligned with the 2030 Agenda. In the financial sector, the EU is discussing a potential loosening of the fiduciary regulation towards institutional investors, such as pension funds and banks, which would liberate more institutional capital towards sustainable projects with riskier profiles.

Picture 1 - The 17 Sustainable Development Goals

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