Business Models & Finance

Description

Raison d'etre

There is a strong need for knowledge sharing, innovation and expertise on business models, finance & funding and procurement. 

This Business Models and Finance Action Cluster was relaunched in October 2019, with new leadership. It will continue on the good work carried out in the past and strive to meet the evolving needs of the cities market. The Action Cluster aspires to be a platform of choice for stakeholder-dialogue, and to identify and remove the obstacles for the accelerated development of the smart cities market.

Goals 2020-2022: 

  • We seek to stimulate scale through demand-aggregation, and to involve demand-aggregation platforms
  • We seek to facilitate the development of tailored city capacity-building initiatives
  • We seek to help promote the RD&I results from the H2020 Lighthouse projects -- supporting the work on business models. We believe that cooperation between the projects and with the wider EIP-SCC Marketplace can be the basis for replicability.
  • The Post-COVID-19: Nobody or few have foreseen the tragedy to the economics of cities that could pan out of a global crisis like the COVID-19 health-threats and the economic-lockdowns. The Post-COVID-19 world, as the economies now start to reopen, will be very different in terms of the vertical and horizontal solutions demanded by people worldwide -- this will impact life in the city and its appeal. The Business Models and Finance Action Cluster would like to explore:
    1. how this major event has impacted the business models behind tomorrow's city solutions from telecoms infrastructure to transport, from teleworking to the 'on-demand' and sharing economies; and
    2. how this experience is also impacting the case for social investments, both in the form of corporates' ESGs, as well as the freeing up of social money for the development of solutions by the world's innovators. And also the role of smart cities and communities to nurture and host this investment.

How we will achieve:

3-Level Capacity Building:

  • Level 1: A new Self-Learning Initiative which will be relevant for small and mid-size cities. We will leverage on relevant case studies and tools from any other European and global initiatives, such as the H2020-SCC-1 funded Lighthouse projects and SCIS (where these are available to us.)
  • Level 2: On-Demand Training – delivered by the Action Cluster's current and future Initiative leads, and linked to external events
  • Level 3: Individual City-Coaching via Initiative leads/supporters. This is a level which still requires shaping, and on which we are still collecting feedback. This works hand-in-hand with the EIP-SCC MatchmakingWe would like to work with experts, already engaged with cities or who would like to start engaging - email us (addresses at the bottom of this page.)

Supporting Matchmaking for Finance:

  • We will facilitate demand aggregation for small to mid-size city financing. We are starting with city projects delivering standard cash-flow streams (investment/saving or revenue) and will extend to projects with public or public/private revenue streams.
  • We will also explore social-capital as this becomes an ever-more popular with solutions towards achieving the sustainable development goals (SDGs.) 
  • We will facilitate the documentation of models and good practice cases to foster learning and encourage scale

Roles of the Stakeholders:

  • Cities – drive industry towards Energy Performance Contracts (EPC) business models (or similar) and engage with demand aggregation platforms for re-financing to enable cities off-balance sheet financing according to the rules on how to classify EPC in government accounts.
  • Investors – everybody says there is plenty of money, and yet the small and mid-size cities don't feel like that. We need investors to understand what makes investments appealing, what is their definition of what is bankable and also to work with cities to understand the real pains (and sometimes consider sharing the risk.)
  • Investor-platforms – ease the way for investors to invest via intermediaries (demand aggregation platforms)
  • Industry – learn about project development process standards and engage with demand aggregation platforms on the request of cities
  • Research – develop business models for complex / innovative projects making them structurally more similar to EPC project to enhance their bankability
     
  • YOU – Contact us by email to develop content together. We are setting up new initiatives, we are hosting webinars and linking solutions to cities. Link to our emails at the bottom of this page.

 

Resources

Level 1: Self-Learning for Cities:

  • Post-COVID-19: How could the unusual emergency responses to this crisis start to point the way to increased resilience for us all and to long-term sustainability? The cases on the Covid-19 Responses Climate Transformation platform are gathered as they can provide inspiration for transformative system-change.
     
  • This comprehensive online guide offers extensive information on funding the circular economy in the urban context. The project is funded by the European Investment Advisory Hub, which is a partnership between the European Investment Bank (EIB) and the European Commission. Its 100+ funds, its circular case studies, and its educational information and library provide ample opportunities to enhance your knowledge on this subject.
     
  • Joint Paper of the Action Cluster Leads about investment in cities: "Towards a joint investment programme for European smart cities"
     
  • The Celsius project supports cities in the decarbonisation of their heating and cooling systems. This is a link to the Celsius Heating and Cooling Business Models and Finance Toolbox.
     
  • In September 2017, Eurostat issued a Guidance Note on how “energy performance contracting” (EPCs), in certain circumstances, can be recorded “off balance sheet” for government. In order to bring clarity on the practical application of the 2017 Guidance Note, Eurostat and the EIB have worked together to produce this guide.
     
  • List of H2020-SCC-1 projects (check link on left menu "Funded Project List"): 2014/15; 2016/17; 2018/19/20 Each of these projects deliver reports which are of interest to Business Models and Finance aspects, and these links can help you find the right people to talk to.

Level 2: Training Sessions

  • Webinar of the 18 June 2020: Delivery models, funding & procurement for smart cities [Description] [Recording];

  • Webinar of the 7 May 2020: Facilitating project finance through standardised risk assessment [Description] [Recording];

  • Webinar of the 21 April 2020: Looking for Investment – What to Expect:  Smart City Project Due Diligence [Description] [Recording];

  • Event of March 2020: Connecting with Investors (link to news page) 

 

Tools syndicated from the EU H2020 Lighthouse Smart City Programme (non-comprehensive list):

If you are a Lighthouse Smart City Project and want your BM&F tools promoted here, please contact us.

Archived tools (no longer updated by this Action Cluster):

 

Contact

Get in touch with the Action Cluster Leadership by email: derrick@connectivityalliance.eu and juergen.ritzek@ee-ip.org.

We are based in Brussels in offices very close to the European Commission's, and will be happy to meet you. Get in touch.

 

 

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