Toronto Atmospheric Fund, an arms-length municipal agency and endowment created to help reduce air pollution and GHG emissions in Toronto, has spun off a new social enterprise called Efficiency Capital Corporation. The new for-profit company will invest $100 million over their next several years into energy-efficiency retrofit projects for large buildings across Canada.
It has four steps for doing this: first, it audits a building to identify where efficiency gains can be found; second, it finances projects based on a seven- to 10-year shared savings agreement through which Efficiency Capital recoups its principal investment plus interest; third, an engineering firm is contracted to manage the project; fourth, after project work is completed energy savings will be measured and verified on a regular basis throughout the term of the contract.
“Reducing energy waste is profitable and is the biggest, fastest opportunity to tackle climate change in cities,” said Julia Langer, chief executive of the Toronto Atmospheric Fund, which developed the financing tool and licensed it to Efficiency Capital. The new company, said Langer, “is launching at the perfect time as governments, citizens and businesses get serious about creating a low-carbon economy.”
For building owners, it’s a debt-free approach to financing energy efficiency initiatives and reducing carbon footprints of properties. All projects are insured to guarantee project payback.