From Vision to Action: How Local Authorities Can Finance the Energy Transition

Date: 13.08.2025
By: MESTRI-CE
The laterest session on Investment Needs of Local Authorities brought together experts, municipal representatives, and financing specialists to explore how cities and regions can turn their climate ambitions into tangible results. The discussions highlighted that while goals and technology matter, the real challenge often lies in finding the right financial pathway.

 

From Vision to Savings – A Structured Approach

The session opened with a clear framework illustrating the journey from an initial idea to measurable savings:

 

Vision – A long-term guiding image of a sustainable, climate-friendly community.

 

Goals – Measurable targets to track progress.

 

Strategy – A concrete action plan to reach those goals.

 

(Political) Instruments – Regulations, incentives, and informational campaigns to support action.

 

(Technical) Measures – Practical steps such as building renovations, district heating, heat pumps, EV integration, and behavioral change initiatives.

 

Savings – Tangible reductions in energy use and greenhouse gas emissions.

 

This “vision-to-savings” pathway serves as a decision-making compass for municipalities, helping them prioritize investments and align them with climate roadmaps.

 

Energy Service Contracting – Beyond Conventional Financing

A central focus was on Energy Service Contracting (EDL) models, which offer an alternative to direct public investment. These models can include:

 

Provision of energy efficiency services (EES) with financing included.

 

Payment for implemented energy services over time.

 

Selling receivables linked to project capital investments.

 

Lump-sum payments for receivables over the contract period.

 

Structured repayment of receivables.

 

Participants compared EDL with in-house implementation, weighing factors such as cost control, risk allocation, and speed of implementation.

 

Finding the Right Projects for EDL and PPP

The session also addressed project selection criteria for both EDL and Public-Private Partnerships (PPP). A highlight was an example from South Tyrol, where multiple cities—including Bozen, Merano, Brixen, and Bruneck—successfully implemented a PPP model for energy efficiency upgrades.

 

Key Takeaways

Innovative financing models like EDL and PPP should complement—not replace—traditional public financing, especially for large-scale decarbonization projects.

 

These approaches can speed up implementation at comparable or even lower total lifecycle costs.

 

They allow economic risks to be shifted to external partners while keeping governance with public authorities.

 

Limited experience means early adopters play a crucial role in paving the way.

 

By combining visionary leadership, strategic planning, and innovative financing, local authorities can move from climate commitments to real-world impact—faster and more efficiently than ever before.