Investment financing
in the ESCO model
An ESCO (Energy Saving Company) model is an investment approach where DB Energy covers all financial outlays and assumes most of the technical risk.
How is financing structured under the ESCO model?
In the ESCO model, companies can implement energy efficiency improvement and decarbonization projects without t making upfront financial outlays. The main advantages are:
- investment costs are covered by DB Energy,
- no expenses for your company,
- DB Energy delivers turnkey projects and guarantees the promised energy savings and financial benefits,
- investment is paid back directly from the savings achieved — treated as OPEX, not CAPEX,
- your company starts benefiting from savings as early as the first year after project launch,
- an investment that won’t affect your company’s profit and loss, with the option for off-balance-sheet treatment.
Who can take advantage of ESCO model financing?
The ESCO financing model (Energy Saving Company) is suitable for companies that want to implement projects to improve energy efficiency but prefer not to, or cannot, use their own funds.
Typical factors encouraging a company to use the ESCO model include:
- Financial:
- Limited access to capital - insufficient or no funds available to invest in energy efficiency or decarbonization projects.
- High cost of capital - expensive financing through loans or other traditional funding methods.
- Competing investment priorities - company's investment plans focused on other key business areas, leaving energy efficiency initiatives underfunded.
- Uncertain return on investment- concerns that energy savings may be insufficient to cover project costs.
- Organizational:
- Shortage of qualified staff - insufficient specialists to effectively oversee energy efficiency projects.
- Limited operational resources - inadequate internal resources (time, personnel, or technology) to support full project implementation.
- Lack of energy strategy - an absent or poorly developed energy management strategy, making it difficult to assess benefits from the ESCO model.
- Change management barriers - resistance to adopting new organizational solutions and concerns about complex processes.
- Technological:
- Concerns about technology reliability - doubts about effectiveness of proposed technological solutions and their impact on production processes.
- Insufficient technological knowledge - limited awareness of available technologies suitable for implementation under the ESCO model.
- Regulatory and legal:
- Regulatory uncertainties - unclear or misunderstood regulations on energy efficiency or decarbonization, making ESCO model adoption more difficult.
- Legal interpretation risk - concerns about potential changes in emission or energy requirements and their consequences.
Financing in the ESCO model at DB Energy includes
Conceptual and design work.
Acquisition of fixed assets.
Network connection and integration.
Installation service and maintenance.
We finance 100% of the cost for a typical modernization project.
Your company contributes 0% upfront.
Buyout option available at 1% of the investment value.
Secured only by the fixed asset.
Typical contract duration: 5-10 years
Investment settlement within a set budget – flexible execution and financing:
- fixed monthly fee or savings sharing arrangement,
- long and secure financing period.
ESCO model
No risk for the company
Financial and technological risks are assumed by DB Energy.
Savings-based financing
The company repays the investment from energy cost savings achieved through implemented modernizations.
Long-term cooperation
DB Energy provides monitoring, maintenance, and technical support throughout the contract.
Guaranteed results
The ESCO agreement includes a guarantee of achieving specified savings levels.
Benefits for ESCO clients
- Investment without upfront costs - DB Energy handles the design, financing, and implementation of energy efficiency projects.
- Immediate savings - you start receiving a portion of the savings as soon as the ESCO project is completed.
- Maximized savings and reduced energy consumption through DB Energy’s long-term engagement, with compensation tied to the level of achieved savings (success fee).
- Cost-free reduction of CO2 and other emissions - you benefit from emission reductions without upfront costs, with investments repaid from the achieved savings.
- Off-balance-sheet investment (subject to contract terms) – the ESCO model does not negatively affect your liquidity or credit risk indicators.
- Risk transfer - DB Energy assumes the technical and financial risks of the investment.
How does the ESCO model work?
Energy savings are at the core of this model – they pay for the investment and guarantee the results.
ESCO finances the entire project, and the client repays a fixed percentage of the savings over the contract term (from 5 to 10 years). Once the project is finished, your company keeps all the savings.
Energy efficiency investments in the ESCO model
Simoldes Plasticos – covering the full process: audit, design, implementation, and financing
Soufflet Polska malt house – from audit to 40% reduction in emissions
