Abogado experto en derechos Humanos
EL PRIMER CASO DE FEMINICIDIO ANTE LA CORTE INTERAMERICANA DE DERECHOS HUMANOS
Many of Self-Help’s commercial borrowers do not meet the underwriting guidelines of conventional lenders. Thus, Self-Help could play a key role in energy efficiency lending to marginal businesses, which may see the greatest relative benefit from an energy cost reduction. The numerous benefits of energy efficiency are outlined in Chapter 1, and the direct and indirect benefits to Self-Help and borrowers justify strong consideration of an energy efficiency initiative for the commercial lending division. However, such an initiative would not be without challenges. The charter school case study in Chapter 4 will explore in greater depth the challenges that may be faced by an initiative directed at schools. Briefly, the issues that may face a more general commercial initiative include:
Delays. Energy efficiency considerations could delay the loan approval process, resulting from commissioning energy audits, or modifying construction budgets and plans in the case of facilities loans.
Overwhelmed Borrowers. The existing lending process is already overwhelming for some borrowers, and this could be exacerbated by new energy considerations.
Access to Qualified Contractors. Energy savings will depend on the quality of work performed; Self-Help may need to help borrowers identify experienced professionals.
Appraisal Issues. Building owners may rightly be concerned about investing money into property that may not be recouped upon resale.
Administrative Costs. An energy efficiency initiative could add significant administrative costs, as a result of staff training on energy issues and increased borrower technical assistance.
Recommendations for Self-Help Commercial Energy Efficiency Lending
Given the breadth of the commercial sector and the resulting challenges of gaining an in-depth understanding of energy issues as they relate to different types of businesses, I recommend that any substantial Self-Help energy efficiency initiative begin by focusing on one sector. This will allow staff to become more familiar with energy efficiency issues, and will provide an opportunity to evaluate the benefit to borrowers of Self-Help assistance. If the implementation burden is not too great and benefits are apparent, the initiative could be expanded to additional business types or to a broad energy efficiency program. Given preliminary research and staff interest, a focus on charter schools has already been chosen and initial efforts to establish an energy component to charter school lending have already begun. Charter school lending opportunities are discussed in Chapter 4. However, there remain some opportunities to begin to lay the groundwork for a broader initiative, and recommendations are outlined below.
Self-Help already provides a brochure with energy conservation information as part of the commercial loan application package. This provides simple suggestions on ways to conserve energy, such as switching to more efficient light bulbs. The brochure also lists some resources that are available outside Self-Help. This is a great resource, but could be improved upon in the following ways:
o Currently, no one is responsible for maintaining the brochure. This responsibility
should be assigned to an interested staff member, to ensure that recommendations and referrals provided are always up-to-date.
o This basic brochure could be expanded to provide more in-depth information on the
recommendations, such as average cost, energy savings, and payback period, to help borrowers better evaluate the financial returns.
o Rather than simply providing the brochure as part of the loan application, loan
officers could be encouraged to discuss the information in the brochure with borrowers.
o A second brochure could be created to move beyond more of the operations and
maintenance ideas to building improvement opportunities, to be offered to borrowers who have a construction or renovation component to their loan.
Self-Help could consider encouraging borrowers to obtain energy audits. The organization could explore opportunities for grants or partnerships that would allow for low-cost or free energy audits, or could offer more attractive loan terms or other incentives to borrowers
who commissioned an audit. This could be available for all commercial borrowers, or targeted to borrowers in specific high-energy-intensity businesses.
A successful program would require that loan officers have a basic knowledge of energy efficiency and Self-Help’s motivation for its promotion. Staff education might include: the basics of energy efficiency (benefits, technologies, etc.); a general understanding of how energy efficiency improvements offer different benefits to different businesses; how to interpret estimates of costs savings; and an understanding of payback period analysis. Self- Help could proactively begin considering ways to introduce these concepts to loan officers in advance of any major energy initiative.
ENERGY STAR’s Eric Coffman (2005) believes that more attractive financing or incentives are necessary to encourage businesses to take the time to look into energy efficiency options. Subsidized loans are not standard practice at Self-Help, as the organization believes in self- sufficiency and adequate risk compensation. However, with a source of funding to cover costs and a solid demonstration of mission fit and the need for a low-interest rate program, this could be a potential long-term possibility. Self-Help should conduct more research, such as a survey of existing borrowers or other target audiences, to determine whether the cost of capital is preventing them from considering energy efficiency options.