Last week we were pleased to stand shoulder to shoulder with Mike Vinokur, President of Efficiency Capital Corp., to announce the beginning of a new for-profit, socially responsible venture incubated by TAF. For me personally, it marks an important new phase, following two intensive years of work with TAF partners, clients and volunteer Investment Committee members to bring a new low-carbon financing tool to life.
As the 200+ crowd buzzed at our Annual Meeting Reception at Metro Hall, Gord Hicks, President of Brookfield Johnson Controls set the context by reinforcing why improving energy performance is important from a building management perspective. TAF CEO Julia Langer emphasized that buildings are the primary source of greenhouse gas emissions in cities, so must get to work reducing emissions from this sector – and quickly – if we are serious about reaching our greenhouse gas reduction targets.
The good news? Energy efficiency investments are profitable. TAF knows this and has been proving it by using our trademarked financing approach – the ESPA™ (Energy Saving Performance Agreement) – to invest in retrofits all over town. The approach creates significant energy reduction in individual buildings and generates a market rate of return to support TAF’s work advancing local solutions to climate change.
Since TAF has relatively small amount of capital to invest directly, we must ensure that we attract the attention of private sector investors to go the next mile.
Once the ESPA™ model – a non-debt product that covers all up front capital costs of retrofits while guaranteeing energy cost savings – was successfully prototyped by TAF, things got interesting. TAF entertained ten prospective investors before licensing this innovative product to Efficiency Capital Corp., led by Mike Vinokur.
Vinokur and his team plan to leverage TAF’s innovation attract and deploy $100M in energy efficiency investment over the next few years. “It’s rare that you get an opportunity to actually make money and make the world a better place all at the same time,” says Efficiency Capital’s President Mike Vinokur. “To win the use of TAF’s ESPA we had to promise that, notwithstanding being a for-profit organization, we will also advance the GHG-reduction mandate. They were very clear: it’s not one or the other, it’s both.”
Of course, no energy efficiency work succeeds without excellence in the engineering department. That’s why we were very fortunate to have Derrick Finn and his company Finn Projects as a key incubation partner, taking development risk right alongside TAF and remaining committed to our success throughout. Thank you Derrick – we couldn’t have done it without you!
To read the full story on TAF’s development of the ESPA and the Efficiency Capital Corp. – and to get further insight into TAF’s objectives and approach for mobilizing private capital into low-carbon solutions, click here.