The UNEP Copenhagen Climate Centre, in collaboration with the Energy Efficiency Management Office (EEMO) of the Ministry of Energy in Mauritius has initiated the first stages of the De-risking Facility for Energy Performance Contracting project, aimed at overcoming financial barriers to energy efficiency investments through energy performance contracting in Mauritius.
Designed in 2023 through the GEF funded project Nationally Appropriate Mitigation Actions for Low Carbon Island Development Strategy, UNEP Copenhagen Climate Centre and EEMO developed a concept seeking to leverage the expertise of Energy Service Companies (ESCOs) to drive sustainable energy solutions across the island nation. This concept was then selected for further support by the Mitigation Action Facility, leading to the first stages of the project starting in early 2025.
The project will address key financial and regulatory challenges for ESCOs and aims to ensure the operationalization of a de-risking mechanism, the Mauritius ESCO Guarantee, for investments in energy efficiency projects through energy performance contracting, that will seek to be capitalized through support by the Mitigation Action Facility.
A new financing mechanism
In January 2025, a 15-month work programme that aims to establish the Mauritius ESCO Guarantee started. This mechanism has been developed by experts from UNEP Copenhagen Climate Centre in collaboration with a diverse group of stakeholders, including government entities, energy efficiency clients, ESCOs, and banks.
A critical milestone in the project’s journey was the inception mission conducted from February 10 to 14, 2025. The mission’s primary objectives were to devise a plan for establishing supporting structures, clarify financing conditions with commercial banks, ensure regulatory alignment, and confirm the readiness of the State Investment Corporation and its subsidiary Capital Asset Management to manage the proposed Mauritius ESCO Guarantee.
The Mauritius ESCO Guarantee
The inception mission focused on the activities needed to establish and operationalize the Mauritius ESCO Guarantee, while ensuring that the needed enabling environments are its smooth start are in place, through five main lines of work. The first consists of developing the regulatory framework for energy performance contracting. This involves collaborating with EEMO to draft new regulations that would create a conducive environment for ESCOs to operate effectively.
The second line of work is building capacity with ESCOs. This will be achieved by engaging training institutions like the Mauritius Institute of Training and Development to host job fairs and provide specialized training in collaboration with international certification entities, thereby building the capacity of ESCOs in terms of skills and staff.
The third line of work is building support and interest in the banking sector for lending against guarantees for energy performance contracts. To this end, the Mauritius ESCO Guarantee was designed to leverage commercial lending to ESCOs.
The fourth line of work is establishing the legal basis and operational procedures for the Mauritius ESCO Guarantee fund. The fifth and final line of work consists of raising awareness among clients, public as well as private, to energy performance contracting and the services offered by ESCOs.
Energy Efficiency for mitigation and sustainable development
During the inception mission, UNEP Copenhagen Climate Centre and its partners engaged with a wide range of stakeholders to ensure comprehensive support and collaboration. The organizations met included the EEMO, State Investment Corporation and Capital Asset Management , the Ministry of Finance, the Ministry of Energy and Public Utilities, Mauritius Banker’s Association, State Bank of Mauritius, Mauritius Commercial Bank, HSBC, Mauritius Institute of Training and Development, the UN Resident Coordinator’s Office, and various ESCOs, energy auditors and public and private facilities that have undergone energy audits and identified energy efficiency investments opportunities that could be financed and implemented by ESCOs.
The project aims to create a sustainable and self-sufficient energy efficiency sector in Mauritius. By addressing financial and regulatory barriers, building capacity, and fostering collaboration among stakeholders, the UNEP Copenhagen Climate Centre and its partners are paving the way for a greener and more energy-efficient Mauritius, where energy efficiency and innovative financial mechanisms drive sustainable development.
