The Solution Finance Accelerator, whose first cohort ran from 2020-2021, contributes to a vision of a vibrant social finance marketplace with efficient and effective investment capital flowing to social and environmental development at scale. The SFA aims to expand the Canadian social finance marketplace by supporting a group of impact investing intermediaries to develop and launch their funds. These organizations are disrupting the traditional means of structuring their business models, be it by leveraging technologies or applying new financial mechanisms to advance the United Nations Sustainable Development Goals. This series profiles the nine participants supported through the Accelerator.
Efficiency Capital created an innovative financial model that allows property owners to retrofit their buildings at low risk and cost, thereby accelerating the reduction of greenhouse gas emissions. To date, Efficiency Capital has helped reduce over 10,000 tonnes of emissions in the Greater Toronto Area. This has also helped residents save on their energy bills over the long-term. The financial model has been applied to commercial properties, social housing, institutional and multi-residential buildings. In light of their innovative approach, Efficiency Capital was featured in The Globe and Mail’s Canada’s Clean50 Awards Report in 2021 as Clean50 Awards 2021 Honourees.
“We are responding to the ageing building stock across the country with an innovative service-based model. Typically, investors are attracted to technology-based solutions, but our innovative financial model offers a way to integrate those technologies to achieve better value for less risk while also reducing greenhouse gas emissions — backed with solid data,” says Chandra Ramadurai, CEO.
Efficiency Capital’s Financial Innovation
Efficiency capital has an innovative financial and business model that is structured for property owners to retrofit their buildings more quickly. The company offers energy savings as a service, a unique performance-based solution that upgrades the energy and environmental performance of buildings with no upfront cost to the owner. A percentage of the improved performance is then earned over time.
The model has precise measurements of greenhouse gas reductions.
How does the model work?
Retrofitting Canada’s homes and large-scale real-estate is necessary for Canada to achieve net-zero carbon emissions by 2050. While old buildings need attention, owners may find it daunting and often lack the financial and logistical capacity for a large retrofit project. This is where Efficiency Capital steps in. Efficiency Capital will take on a project by (1) analyzing the retrofit cost, (2) guaranteeing the utility consumption reductions, (3) taking the risk of the project not performing and mitigating it through insurance mechanisms and (4) hiring expert and well-vetted engineering partners and contractors.
Investors can benefit from Efficiency Capital’s model by co-investing on a per-project basis. If an investor owns real estate, they can partner with Efficiency Capital to generate a higher overall return through the investment by retrofitting their owned properties.
Solutions Finance Accelerator highlights
- Efficiency Capital scaled their work from social housing to the commercial market. In so doing, they moved their company into a service model to be more attuned to the commercial real estate market.
- Efficiency Capital has grown as an organization, despite the pandemic. They have a larger team and have adapted to their commercial segment with new methodologies, innovative products and a network of co-investors.
Learn more about Efficiency Capital