Green-Finance-Banner

ESI Program in El Salvador

The ESI Program is implemented in El Salvador under the leadership of Banco de Desarrollo de la República de El Salvador, BANDESAL. The financing strategy combines medium and long-term loans with three project risk mitigation instruments that support the identification and structuring of technically robust and bankable projects: a standard contract, technical validation, and the Energy Savings Insurance.

ESI Program explained in 2 minutes


 

Financing and Incentives

Projects that successfully complete the validation and are backed by and Energy Savings Insurance will have access to BANDESAL’s loans, designed with special conditions to finance the proposed investments that include preferential rates, grace periods and extended tenure. Specific characteristics and conditions of the credit lines are available at ESI - BANDESAL.

BANDESAL and the IDB provide incentives for investors and technology providers that develop projects utilizing the ESI Model, including:

  • Validation of the projects at the expense of the ESI Program.
  • Free access for technology providers to the ESI Accelerator Initiative, aimed to build capacity on how to technically structure a project with ESI methodologies and how to use an Energy Savings Insurance in energy efficiency and distributed generation projects.
  • Specialized technical advice, at no cost to the supplier and investor, for the preparation of technical documents required by the validating entity.
  • Support in the interaction with the financial intermediary and insurance company for an expedited evaluation of the credit and the Energy Savings Insurance applications.
  • Preparation and dissemination of success cases in events and electronic platforms.

Incentives are subject to the availability of resources.


 

Standard contract

The contract establishes the responsibilities of the supplier in terms of supply and installation of equipment and its corresponding guarantees, in addition to the promised energy savings or generation. The customer's commitments include timely payment, access to facilities and adequate maintenance of the equipment.

Some of the most relevant characteristics of the contract are: well defined promised energy savings or energy generation, a reference energy price, periodicity of measurements and contract duration (usually annual and up to 5 years), validation protocols, insurance activation criteria, compensation mechanisms for unrealized savings and dispute resolution clauses. Here you can download the Spanish version of the contract model for guaranteed energy savings and energy generation projects in El Salvador.

 

Technical validation

The validation of the project consists of two stages:

  • Validation:An independent validator evaluates the supplier's technical proposal to the customer and indicates whether the project has the potential to achieve the promised energy savings or generation. The supplier must use a validation format developed by the Program, which has a methodological guide to provide assistance.
  • Verification: At the end of the installation of the project equipment, the validator verifies on-site that the project has been built according to specifications.

The annual savings commitment is set by the supplier based on its experience and assessment on the field. The project baseline is established with standardized methodologies developed by the ESI Program based on ISO 50001 protocols and summarised in the validation form. The validator acts as an arbitrator in case of any disagreement between customer and supplier in terms of savings generated by the project. The validator's roles are defined in the contract and his decisions are binding for the parties.

Icontec and AENOR provide its services as a validator in El Salvador. For more details please refer to: Icontenc and AENOR


 

Insurance: energy savings - power generation

In the ESI Model, insurance is a guarantee instrument, granted by the supplier to the client, which acts as a performance warranty of the committed savings or energy generation during the contract duration. If at any point in time the project does not achieve the pledged savings, the insurance will financially compensate the client.

The insurance is an integral part of the project and is activated once the validator verifies the initiation of operations. ASESUISA was the pioneer in the development of Energy Savings Insurance in El Salvador. Product details are available at: ASESUISA

This post is also available in: Spanish Portuguese (Brazil)

  • en
  • es
  • pt-br