Financing with ESCO model- example of company Galeb

Energy efficiency is the backbone of the unique energy policy of the European Union and is one of the five major objectives of the Europe 2020 strategy - reducing energy consumption by 20% by 2020. Increasing energy efficiency is an effective way of achieving the goals of sustainable development, since energy efficiency directly contributes to the reduction of emissions into the environment, thus strengthening the competitiveness of the industry, creating new jobs and increasing the security of energy supply. In the context of the EU Cohesion Policy, the Republic of Croatia has significant funds of financial support at its disposal, intended for the implementation of energy efficiency projects from EU funds in various sectors through programs for financing and co-financing Croatian Environmental Protection and Energy Efficiency Fund (FZOEU). A clear and measurable impact the attempts to reduce energy consumption have on the competitiveness of business, in addition to the possibility of subsidies of energy efficiency projects from public sources, has resulted in the emergence of innovative models of financing projects of this kind in the domestic market. ESCO (Energy Service Company) is the generic name of the concept of market services in the energy sector. ESCO model includes development, implementation and financing of energy efficiency to reduce energy costs and maintenance by installing energy-efficient equipment and optimizing energy systems while ensuring the repayment of the investment through savings achieved in a given period. This paper presents a case study on the project investment in energy-efficient lighting and compressor plant in the production plant textile company Galeb. Also, preparatory activities, applications, contracting, implementation and reporting on the project, which is financed by ESCO contract model energy services with subsidy of FZOEU through the de minimis aid and relations between all parties involved in the project, are presented.