EAPB President Lidwin van Velden participates in webinar "Housing Europe - Attracting Sustainable Finance for Affordable and Social Housing."

Introduction

On the 27th of February 2024, Lidwin van Velden, the President of the European Association of Public Banks (EAPB), actively participated in the 'Sustainable Finance' Innovation Bites webinar hosted by Housing Europe. The event brought together diverse speakers to share valuable insights on the challenges and opportunities associated with attracting sustainable finance for affordable and social housing. Here, we delve into the key takeaways from the event.

Scaling up Sustainable Plus Energy Neighbourhoods (SPENs)

Clara Mafé, representing the syn.ikia EU project, emphasized the significance of Sustainable Plus Energy Neighbourhoods (SPENs) in accelerating the adoption of green buildings. However, she highlighted the financial challenge faced by the social and affordable housing sector, indicating that substantial public or private funding is crucial for the feasibility of SPENs projects, which require significant investment ranging from €400K to €1M.

The ESRS Process and Sustainability Reporting

Paolo Mazzeo from EFRAG provided an overview of the ESRS (European Sustainability Reporting Standards) process, emphasizing the legal mandatory regime of sustainability reporting. He pointed out the Corporate Sustainability Reporting Directive at the political level and ESRS at the technical level. This regulatory framework is designed to support sustainability reporting, with more information available online.

The Role of Public Banks in Affordable Transitions

Lidwin van Velden emphasized the pivotal role of public banks in providing affordable finance for social housing and climate efforts. While expressing support for the green finance agenda, she highlighted challenges arising from regulatory focus on the private commercial sector. Discussions within the EAPB are centered around a social investment framework to meet the interest from the private market in providing finance at attractive rates for social, health, education, and other sectors, crucial for a just transition.

Challenges Faced by Housing Providers

Charlotte Limousin from DELPHIS outlined challenges faced by public and social housing providers, with data management being a significant hurdle. She encouraged a collective approach, built on the sharing of best practices, and viewed the upgraded CSRD reporting requirements as an opportunity for organizations to enhance their strategies.

ESG Finance and Social Housing

Alex Fernández, a PhD candidate from TU Delft, explored the application of Environmental, Social, and Governance (ESG) finance to social housing. He highlighted three key limitations based on interviews with sector representatives across Europe. Fernández recommended incorporating social indicators at the EU level and emphasized the essential role of aggregators and intermediaries at the national level.

Showcasing Successful Projects

The webinar featured presentations on successful projects from various regions. Examples included a major urban renewal project in Orléans, France, financed partially by a commercial bank loan based on EIB funding, and ÖrebroBostäder AB's approach to green bonds and social impact investment in Sweden. Additionally, insights from Norway highlighted a housing association securing a private bank loan for energy efficiency renovation.

Navigating the Financial Landscape

Julien Dijol discussed the challenges posed by the current financial landscape and suggested the use of Energy Performance Contracts (EPCs) as a promising tool. He highlighted the importance of private loans with ESG requirements and potential public or collective guarantees to attract private funding.

Conclusion

In closing, Dara Turnbull emphasized the enduring nature of sustainability standards, urging housing providers to take them seriously to attract green investment. The key takeaway from the webinar was the importance of collaboration, financial innovation, and a proactive approach to address the challenges and opportunities in sustainable finance for affordable and social housing. The journey towards a fair and affordable energy transition requires collective efforts from public and private stakeholders.

Presentation slides are available here