COMMISSION STAFF WORKING DOCUMENT Support from the EU budget to unlock investment into building renovation under the Renovation Wave Accompanying the COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS A Renovation Wave for Europe - greening our buildings, creating jobs, improving lives
Date: 2020-10-14
Institutions: Directorate-General for Energy, European Commission
Subjects: building, building safety, building services, energy audit, energy efficiency, energy saving, improvement of housing, investment, reduction of gas emissions, technological change

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 14.10.2020  SWD(2020) 550 final  COMMISSION STAFF WORKING DOCUMENT Support from the EU budget to unlock investment into building renovation        under the Renovation Wave Accompanying the COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS  A Renovation Wave for Europe - greening our buildings, creating jobs, improving lives  {COM(2020) 662 final}  
 
 
Proposed support from the EU budget to unlock investment into 
building renovation  

Doubling  the  annual  renovation  rate  in  the  EU  and  ensuring  high  quality  renovations  will 
bring valuable benefits to European citizens and will mobilise considerable private and public 
investment, supporting the green and digital recovery, and a just clean energy transition. The 
additional investment needed is expected to be in the range of EUR 90 billion annually. This 
unprecedented  challenge  necessitates  public  incentives  to  mobilise  the  necessary  private 
investments.  

The  European  Union  will  rely  on  various  instruments  geared  towards  directly  supporting 
investments  in  quality  building  renovations,  leveraging  private  investment,  supporting 
research  and  innovation,  providing  technical  assistance,  deploying  attractive  financial 
products for building renovation, promoting market uptake and addressing non-technological 
barriers to building renovation. 

1. Proposed EU budget to support directly investments in quality 
building renovations 

Building renovation is a clear priority of the Commission and the Renovation Wave is a 
flagship  initiative  under  the  EU  Green  Deal.  The  Commission  will  ensure  that  EU 
programmes and instruments are put to good use to support and unlock investment in building 
renovation,  promoting  sustainable  quality  renovations,  inclusiveness,  digitalisation  and 
protection of cultural heritage value, as well as related job creation and industrial leadership. 
The  Commission  encourages  Member  States  to  use  EU  financial  resources  to  implement 
national, regional and local support schemes for stimulating quality building renovation. 

The  Commission  proposed  on  27  May  2020  a  recovery  package  featuring  a  revised 
Multiannual  Financial  Framework  2021-2027  and  the  recovery  instrument  Next 
Generation EU (NGEU) of EUR 750 billion available to tackle the economic and social 
consequences of the COVID-19 crisis and support the twin green and digital transition. 

The figures quoted in this document are based on the conclusions of the European Council of 
17-21  July  2020.  They  however  do  not  prejudge  the  outcome  of  the  ongoing  discussions 
between the European Parliament and the Council on the elements of the recovery package –
such as the Multiannual Financial Framework, the sectoral programmes, their structure and 
budgetary envelopes –which will be concluded in accordance with their respective adoption 
procedures. 

The Recovery and Resilience Facility (RRF), proposed to be powered by EUR 672.5 billion 
in grants and loans, provides Member States with a considerable additional funding that could 
be  used  to  finance  quality  building  renovations.  The  Commission  proposal  for  country-
specific recommendations in 2020 focused on the immediate measures to mitigate the socio-
economic impact of the pandemic and identified building renovation as one of the key short-
term  priorities.  Moreover,  the  Commission  proposed  to  launch  the  European  flagship 
“Renovate”,  strongly encouraging Member States to reflect building renovation as a top 
priority in their  national Recovery and Resilience Plans that they will prepare to access 

1 

 
 
 
 
  
 
 
 
 
 
funding from this Facility, building on their National Energy and Climate Plans and Long-
Term Renovation Strategies, and on the country specific recommendations. Both the National 
Energy  and  Climate  Plans  and  the  Long-Term  Renovation  Strategies1  are  key  strategic  and 
planning tools in  steering funds to  building renovation into the right  priorities, aligned  with 
national  needs.  The  Recovery  and  Resilience  Facility  guidelines  provided  to  the  Member 
States in September 2020 include a detailed Renovation Wave component that Member States 
are  invited  to  include  and  to  build  upon  in  their  national  Recovery  and  Resilience  Plans. 
Investments  and  reforms  with  high  potential  to  scale  up  investments  in  building  renovation 
and leverage public and private financing, with a focus on social and affordable housing, are 
particularly  relevant  to  achieve  the  objectives  of  the  RRF:  green  transition  (reduction  of 
energy  consumption  and  GHG  emissions,  creation  of  jobs  and  growth  stimulus  and  social 
resilience). 

Various  types  of  reforms  and  investments  that  Member  States  could  support  with  the 
Recovery  and  Resilience  Facility.  A  few  examples,  based  on  investments  support  with 
cohesion funds and H2020 projects, are included below: 

Replication  of  project  development  assistance  facility  (ELENA  model)  at  national  level  to 
front-load investments and prepare a strong and aggregated pipeline of investment projects: 
In  France,  several  regional  schemes  are  currently  proposing  integrated  home  renovation 
services,  including  third-party  financing,  to  homeowners.  By  setting  up  a  national  resource 
platform  and  a  re-financing  vehicle,  the  Project  Development  Assistance  (PDA)  project 
ORFEE  will  strengthen  their  financial  structure  and  boost  their  activities,  with  EUR  45 
million of energy-related investments expected by 2023.” 

Deployment of a network of one-stop shops for building renovation at national level. 

Investment schemes based on energy performance contracting targeting public buildings and 
social housing: the Marche Region in Italy has set up an innovative revolving fund (Energy 
and  Mobility  Fund)  combining  ERDF  grants,  soft  loans  and  third-party  financing  from 
Energy Service Companies (ESCOs) through Energy Performance Contracting. The fund was 
deployed  to  deeply  retrofit  six  hospitals  and  nursing  homes  amongst  other  investment 
projects. 

Home  renovation  blending  facilities  combining  technical  assistance,  grants  and  loans  to 
leverage private investments by removing upfront costs and stimulating demand.  

Financing  schemes  with  high  potential  of  scaling  up  building  renovation/innovative 
deployment  of  EE  financing  products  by  commercial  banks,  on-bill  and  on-tax  financing: 
Several  initiatives  are  exploring  the  possibilities  for  debt  incurred  to  invest  in  housing 
improvement to be attached to the property itself and not to its owner, thus paving the way to 
very  long-term  financing  instruments.  For  instance,  the  EuroPACE  project  experiments  in 
Spain  how  such  debt  could  be  repaid  through  property  taxes,  while  the  RenOnBill  project 
explores partnerships with utilities so as to use energy bills as repayment vehicle, with pilot 
implementations in Italy, Spain and Lithuania. 

1  Member  States  had  to  notify  their  Long  Term  Renovation  Strategies  by  10  March  2020.  To  date  (14  October  2020),  12 
Member States have notified complete Long Term Renovation Strategies (AT, CY, CZ,  DE, DK, EE, ES, FR, FI, LU, NL, 
SE). Belgium has notified two partial strategies (Brussels Capital and Flanders). 

2 

 
 
 
 
 
 
 
 
 
 
                                                           
In  the  short  term,  REACT-EU  (Recovery  Assistance  for  Cohesion  and  the  Territories  of 
Europe),  financed  by  NGEU,  has  been  proposed  to  make  available  EUR  47.5  billion  as 
additional  financial  support  to  the  European  Regional  Development  Fund  and  the  European 
Social  Fund,  as  well  as  the  Fund  for  European  Aid  to  the  Most  Deprived,  until  the  end  of 
2023.  REACT-EU  has  been  proposed  to  further  extend  the  crisis  response  and  repair 
measures  that  cohesion  policy  has  already  started  delivering  through  the  Coronavirus 
Response Investment Initiative, while enlarging the scope to cover green, digital, and growth-
enhancing  investments.  This  is  an  opportunity  for  Member  States  and  regions  to  direct 
additional  funding  towards  building  renovation  through  their  relevant  programmes  of  the 
European Regional Development Fund. The proposed strengthened European Social Fund 
will  better  support  the  strengthening  of  green  and  digital  skills  needed  to  accompany  the 
renovation  wave,  but  also  facilitate  the  empowerment  of  residents,  notably  the  most 
vulnerable, integrate them in the renovation wave and ensure fairness and inclusiveness. 

In  the  medium  to  longer  term,  throughout  the  2021-2027  period,  Cohesion  policy  funds 
(European Regional Development Fund, European Social Fund Plus, Cohesion Fund), with a 
proposed budget of EUR 330 billion will continue being an important EU funding source for 
direct  investments  into  energy  and  resource  efficiency  of  buildings  and  their  renovation, 
including  its  human  capital  development  aspect,  to  better  energy  performance  levels. 
Cohesion  policy  aims  at  helping  to  redress  the  main  regional  imbalances  and  strengthening 
economic,  social  and  territorial  cohesion  in  the  Union.  In  this  framework,  cohesion  policy 
funds  will  support  essential  investments  linked  to  the  European  Green  Deal  objectives, 
including  in  energy  and  resource  efficiency  such  as  in  the  building  sector2.  They  will 
contribute  substantially  to  the  overall  target  of  30%  for  climate  expenditure.  In  rural  areas, 
funding from the European Agricultural Fund for Rural Development (EAFRD) can be used 
to enhance energy efficiency and the production of renewable energy. 

The proposed Just Transition Mechanism (JTM) aims to alleviate the social and economic 
costs of the transition to climate neutrality, focusing on the territories, industries and workers 
who will shoulder the biggest  transition  challenges.  Its  first  pillar, the Just  Transition  Fund, 
with a proposed allocation of EUR 17.5 billion, has energy efficiency and circular economy 
investments as its eligibility areas. Selection of projects will be exclusively based on the areas 
mentioned  in  the  territorial  just  transition  plans.  The  second  pillar  of  the  JTM  includes 
InvestEU Just Transition Scheme to be implemented across all InvestEU policy windows. The 
Commission also proposed the third pillar of the JTM - a public sector loan facility to support 
public sector entities by combining grants from the EU budget with loans. The territorial just 
transition  plans  will  be  at  the  centre  of  the  Just  Transition  Mechanism,  including  in  the 
identification of eligible territories.  

Finally,  EU  funding  will  also  include  the  Modernisation  Fund,  established  under  the  ETS 
Directive3, with a volume of about EUR 14 billion4, made available to the 10 lower-income 
Member  States  to  support  investments  in  the  modernisation  of  their  energy  systems  and 

2  Under  the  budget  period  2014-2020,  Cohesion  policy  funds  represented  the  largest  EU  funding  source  for 
direct  support  to  energy  efficiency  in  buildings,  with  around  EUR  14  billion  allocated  for  energy  efficiency 
investments in public and residential buildings over the entire period. 
3 Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a system 
for  greenhouse  gas  emission  allowance  trading  within  the  Union  and  amending  Council  Directive  96/61/EC: 
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02003L0087-20180408  
4 Depending on the carbon price 

3 

 
 
 
 
                                                           
energy  efficiency  improvements.  Investments  in  energy  efficiency  in  buildings,  including 
thermal  renovation  of  buildings  and  investments  in  the  modernisation  of  district  heating 
pipelines,  are  identified  under  the  priority  areas,  which  will  account  for  at  least  70%  of  the 
Funds’  resources.  The  Modernisation  Fund  will  operate  under  the  responsibility  of  the 
Member  States,  who  will  select  the  investments  they  wish  to  submit  for  support.  Both 
individual investments and building renovation schemes are eligible. 

Member  States  can  support  various  types  of  investments  and  schemes  with  and 
Cohesion Funds including REACT-EU. A few examples, based on investments support 
with cohesion policy funds, are included below: 

Renovation of public buildings with cohesion policy funds: With the ERDF, Croatia targeted 
the  renovation  of  257  000  m2  and  69  public  buildings,  in  particular  hospitals  and  nursery 
schools, with expected annual savings of 70 GWh.  

Sustainable  renovation  of  social  housing:  The  Piemonte  and  Calabria  regions  in  Italy 
recently  launched  several  funding  programs  for  sustainable  renovation  of  public  buildings, 
i.a. social housing. The programs, funded through the structural funds, with a total amount of 
more than EUR 100 million, targeted public administrations. Based on these programs, more 
than 300 buildings were certified and more than 1000 professionals were trained on the use 
of  this  sustainability  concept,  which  in  the  future  will  be  extended  to  include  the  lifecycle 
approach. 

2. EU budget proposed to continue leveraging private investment 
at a much larger scale  

The  proposed  InvestEU  programme  will  act  as  a  single  EU  private  investment  support 
mechanism, replacing all existing centrally managed financial instruments. Backed by an EU 
guarantee,  it  will  aim  to  support  unlocking  the  necessary  private  financing,  including  for 
building  renovation  in  Europe,  mainly  through  its  proposed  Sustainable  Infrastructure 
Window. The proposed allocation for the InvestEU programme is EUR 9.1billion. It may be 
used to support debt and equity financing of building renovation including through dedicated 
financial  products  for  building  renovation,  currently  under  development,  in  the  residential 
sector with a focus on social and affordable housing, public buildings, schools and hospitals, 
SMEs and support to ESCOs.  

The  proposed  InvestEU  will  build  on  the  success  of  the  European  Fund  for  Strategic 
Investments  (EFSI),  which  by  July  2020  has  triggered  around  EUR  524.4  billion  of 
investments.  About  16%  of  these  investments  (around  EUR  84  billion)  were  made  in  the 
energy  sector.  Several  projects  focussed  on  energy  efficiency  in  buildings  were  financed  in 
particular in Germany, France and Finland. 

In France, SEM Energies POSIT-IF Ile de France and SPEE in Hauts-de-France are two of 
the first (and most successful) one-stop-shops for residential buildings developed in France, 
using  third-party  financing.  SEM  Ile  de  France  offered  deep  renovation  to  2000+  units  in 
condominiums in the Ile de France Region and created 500 jobs for EUR 1.5 million of PDA 
funding  –  stepped  up  through  EFSI  finance  of  EUR  100  million  to  allow  SEM  Energies  to 

4 

 
 
 
 
 
 
 
 
 
 
offer  finance  directly  to  owners,  overcoming  a  fundamental  market  barrier  of  a  missing 
commercial  bank  offer.  Similarly,  SPEE  results  for  2014-2018  period  accounted  at  1500 
homes  renovated  and  over  400  jobs  created  or  safeguarded  with  38  Million  euros  of 
investment  triggered  with  a  European  support  of  EUR  2  million  from  structural  funds  and 
ELENA. 

Several  large-scale  “energy  efficient  buildings”  from  Germany  received  support  for 
investments  in  energy-efficient  modernisation  of  residential  housing  and the  construction  of 
nearly zero-energy buildings (NZEB). 

France is working to spread uptake of the life-cycle concept developed with its E+C- system, 
based  on  whole-life  carbon  assessment,  which  will  later  on  be  incorporated  in  the  building 
regulation. National funding of EUR 20 million has been provided to help the social housing 
sector to build lodging certified with E+C- label. The funding is related to the performance of 
the project. Similarly, Paris and "Ile-de-France" Region give incentives for building projects 
that are certified with "BBCA label" (a label based on E+C- label). 

The  Smart  Finance  for  Smart  Buildings  initiative  has  stimulated  financing  for  building 
renovation,  promoting  the  combination  of  a  guarantee  facility  with  grants  and  technical 
assistance.  It  has  increased  the  funds  available  for  project  development  assistance,  and  has 
promoted the use of energy performance contracts and the development of one-stop shops for 
building  renovation.  The  initiative  contributed  to  a  more  effective  use  of  public  funds,  to 
reducing  the  perceived  risk  linked  to  energy  efficiency  investments  and  promoted  the 
aggregation of projects. Lessons learnt from this initiative are considered in the design of EU 
guarantee-backed  dedicated  financial  products  supporting  energy  efficiency  investments 
under InvestEU. 

For example, ESIF  –  Energy Efficiency and Renewable Energy for  Malta fund  of  funds co-
financed  by  the  ERDF  was  launched  as  a  first  pilot  to  set  up  and  implement  a  first  loss 
portfolio  guarantee instrument  to  enhance the financing  of  energy  efficiency and renewable 
energy projects for both households and enterprises.  

The  Private  Finance  for  Energy  Efficiency  (PF4EE),  which  has  been  proposed  to  be 
integrated  into  InvestEU,  combining  lending  from  the  EIB  to  private  banks  together  with 
guarantees and technical assistance with a view to trigger EUR 650 million of investment, is a 
very good example of an instrument that reduced the risk of investments in energy efficiency 
including for buildings (e.g. in Czechia , Spain and Portugal). 

In Spain, PF4EE was launched in 2016 and it is managed by Banco Santander, who created 
the loan product ‘Préstamo BEI Eficiencia Energética’, backed by PF4EE. Through this loan 
product,  clients  can  access  financing  for  energy  efficiency  projects  at  preferential  interest 
rates and by means of simple processes. 

In Poland, PF4EE was launched in 2019 and it is managed by BNP Paribas Bank Polska SA, 
which  created  a  loan  product  for  multi-apartment  renovation  -  Energy  Efficiency  Finance 
Facility for Residential  Buildings (EEFFRB). It consists of the package of different services 
including  technical  assistance  (i.e.  energy  audits,  energy  advisory  and  consultations)  from 
ELENA,  a  loan  from  BNP  backed  by  PF4EE  and  an  investment  grant  provided  by  BGK 
(National Promotional Bank).  

5 

 
 
 
 
 
 
 
 
 
 
The European Energy Efficiency Fund (with a proposed initial capital of EUR 140 million) 
is  a  specific  EU-led  financial  instrument  for  energy  efficiency,  providing  market-based 
financing  to  public  sector  projects,  including  renovation  of  public  buildings,  and  social 
housing units owned by public authorities. 

An  energy  efficiency  upgrade  to  the  Italian  University  Hospital  S.  Orsola-Malpighi  was 
completed in 2017. The EEEF provided the university hospital with a project and VAT bond 
facility  of  EUR  31.8  million  in  2013  to  fund  the  upgrade  of  its  entire  fluid  production  and 
distribution  system.  This  included  the  construction  of  its  own  tri-generation  plant  with  a 
district heating and cooling network. 

Guarantee facilities combined with technical assistance, loans and, if necessary, grants, can be 
very successful combinations of public support that  can enable commercial banks and other 
financial institutions to upscale their financing for energy efficiency and building renovations. 

For the EU funds made available to Member States, they can design support schemes inspired 
by the above-mentioned initiatives, to attract private capital, and to increase the leverage and 
the impact of the public funds used.  

Cohesion  policy  funds can also  be used to  mobilise private investment.  In the period 2014-
2020, EUR 1.7 billion has been used in financial instruments as leverage, also in combination 
with grants. 

In Lithuania, ERDF contributes EUR 200 million in the 2014-2020 period to the JESSICA II 
financial  instrument,  targeting  energy  efficiency  retrofit  investments  in  residential  housing, 
with a focus on homeowner associations in multi-apartment buildings. The repayable support 
is  combined  with  the  grant  support  in  the  form  of  interest  rate  and  technical  support 
subsidies, also financed by ERDF. State budget grants may fully compensate for loan capital 
and interest payments of lower income individuals 

3. EU budget proposed to support research and innovation for 
building renovation  

The proposed Horizon Europe will support research and innovation projects on sustainable 
buildings,  continuing  the  successful  support  of  Horizon  2020.  For  example,  the  proposed 
private-public  partnership  on  People-centric  Sustainable  Built  Environment 
(Built4People)  is  being  developed  to  bring  together  all  relevant  actors  across  the  buildings 
and construction value chain in order to develop holistic innovation for the transformation of 
the built environment towards sustainability, including the specificities of built heritage.  

The  partnership  is  a  natural  continuation  and  expansion  in  scope  of  the  Energy  Efficient 
Buildings  Private-Public  Partnership  (EeB  PPP)  established  under  FP7  and  continued  in 
Horizon  2020.  With  over  174  EU-funded  projects  the  partnership  developed  several 
innovations  in  buildings and  construction  technologies,  advanced  materials,  building  energy 
performance and construction and renovation processes, including through industrialisation of 
deep  renovation.  The  EeB  PPP  provided  EUR  184.4  million  under  the  ‘Secure,  clean  and 
efficient  energy’  programme  and  EUR  365.5  million  under  the  NMBP  programme.  Many 
R&I results can be easily scaled into marketable solutions, applicable to the renovation wave. 

6 

 
 
 
 
 
 
 
 
 
 
The European Green Deal Call5, part of Horizon 2020 and with a budget of €1 billion, will 
support  pilot  applications,  demonstration  projects  and  innovative  products,  as  well  as 
governance,  value  chain  and  social  innovation.  It  aims  to  produce  concrete,  tangible  results 
within  a  short  time  frame,  mobilising  research  and  innovation  to  enable  a  green  and  just 
transition.  The  Call  includes  an  area  dedicated  to  ‘Energy  and  resource  efficient  buildings’, 
which will explore the design  and construction of new buildings and retrofitting of  existing 
ones.  Social  housing,  hospitals  and  schools  will  be  a  particular  focus,  to  alleviate  energy 
poverty,  ensuring  a  fair  transition.  The  Call  also  includes  an  area  on  ‘Towards  Climate-
Neutral and Socially Innovative Cities’ , aiming at rapidly deploying full-scale, systemic and 
integrated climate actions at city or district level in order to reach climate neutrality by 2030, 
supporting  the  upcoming  ‘Climate-Neutral  &  Smart  Cities’  Mission.  Another  area  targets 
demonstration of systemic solutions  for the territorial  development  of circular economy,  for 
which the built environment places a relevant role. 

The proposed Smart Cities calls  

The  proposed  Smart  Cities  calls  Horizon  Europe  ‘Climate-Neutral  &  Smart  Cities’ 
Mission6  will  support  and  showcase  100  European  cities  in  their  systemic  transformation 
towards  climate-neutrality  by  2030,  bringing  together  all  actors  in  a  multi-level  and  co-
creative process  to  be formalised via a Climate  City Contract.  The high-level  Expert Group 
advising  the  Commission  in  the  definition  of  the  Mission  specifically  targeted  the  urban 
building stock as one of the primary drivers for urban climate-neutrality, identifying areas and 
actions relevant for the renovation wave. The Mission approach will inspire other European 
cities towards full European climate-neutrality, contributing to the Green Deal 2050 goals.   
The  EU  ETS  Innovation  Fund  is  one  of  the  world’s  largest  funding  programmes  for 
demonstration  of  innovative  low-carbon  technologies  in  the  areas  of  energy-intensive 
industry,  renewable  energy,  energy  storage  and  CCS.  The  fund  supports  highly  innovative 
technologies  that  can  bring  on  significant  emission  reductions,  for  instance  in  the  area  of 
construction  substitute  products  and  low-carbon  design,  linking  new  products  with  the 
renovation market.  

The  use  of  prefabricated  systems  for  the  energy-efficient  building  renovation  allows  the 
reduction of on-site works, minimising the consumption of raw materials and increasing the 
energy and resource efficiency in the construction sector. H2020 projects funded under EeB 
PPP  reached  very  good  results  through  industrialisation  of  deep  renovation  with  low 
intrusiveness, reduced time by 30%, return on investment <10 years and cost reduction > 15 
%.  For  example,  the  project  BERTIM  developed  timber  prefabricated  modules  and  holistic 
methodologies  for  the  deep  renovation.  It  also  developed  computer  based  tool  (RenoBIM), 
which enables reduction of renovation operation time and make more efficient the renovation 
process,  through  the  customization  of  the  mass  production,  from  data  gathering,  designing, 
manufacturing and installation.  

5 https://ec.europa.eu/info/funding-tenders/opportunities/portal/screen/opportunities/topic-
search;freeTextSearchKeyword=;typeCodes=1;statusCodes=31094501,31094502,31094503;programCode=H2020;programD
ivisionCode=null;focusAreaCode=null;crossCuttingPriorityCode=null;callCode=H2020-LC-GD-
2020;sortQuery=submissionStatus;orderBy=asc;onlyTenders=false;topicListKey=topicSearchTablePageState 
6 https://ec.europa.eu/info/horizon-europe-next-research-and-innovation-framework-programme/missions-horizon-
europe/climate-neutral-and-smart-cities_en 

7 

 
 
 
 
 
 
 
                                                           
The Smart City project MAKING-CITY is a large-scale demonstration project aiming at the 
development of new integrated strategies to address the urban energy system transformation 
towards low-carbon cities, with the positive energy district (PED) approach as the core of the 
urban  energy  transition  pathway.  The  project  will  be  intensively  focused  on  achieving 
evidences about the actual potential of the PED concept, as foundation of a high efficient and 
sustainable route to progress beyond the current urban transformation roadmaps. 

4. EU budget to address market barriers to building renovation  

The  proposed  LIFE  programme  2021-2027  will  include  four  sub-programmes,  of  which 
several are highly relevant for the building sector and renovation. The proposed LIFE Clean 
Energy Transition sub-programme, for which a total budget envelope of EUR 1 billion was 
proposed,  will  be  providing  tailored  support  to  Member  States  and  regions  to  holistically 
address the specific barriers to renovation identified in their territories. 

The  market-uptake  projects  are  currently  funded  from  Horizon  2020  Energy  Efficiency 
calls, and will continue under LIFE-Clean Energy Transition sub-programme. They aim at 
removing  market  barriers  to  buildings  renovation,  for  instance  by  addressing  structural  or 
organisation  obstacles,  setting  a  favourable  enabling  framework  and  building  capacity  of 
public and private actors.  

Moreover,  the  proposed  LIFE  Circular  Economy  and  Quality  of  Life  sub-programme, 
with a proposed envelope of € 1.35 billion, will be available to support innovative approaches 
to progress on lifecycle impacts and materials efficiency in the built environment. 

When preparing their national Recovery and Resilience Plans, Member States are encouraged 
to  define  reform  priorities  that  could  successfully  tackle  the  existing  barriers  to  building 
renovation7, and consider allocating the necessary funding for these reforms. Cohesion Policy 
funds can also be used to address structural or organisational obstacles, and create favourable 
premises for building renovation. 

The  BIMplement  project  deals  with  Building  Information  Modelling  (BIM)  training  on 
construction sites. It aims to achieve an improved quality for Nearly Zero Energy Buildings 
construction and renovation, by using BIM as a universal information carrier and enabler of 
the  learning  process  within  projects  and  between  projects.  BIMplement  has  developed  a 
BIM-enhanced  Qualification  Framework  that  describes  the  competences,  skills  and 
knowledge needed in order to connect available knowledge to the BIM-model, the building 
process and the actors involved. The results will be applied in 50 experimental sites in which 
training interventions will be tested in practice. 

The  current  LIFE  project  “LifeforLLL(s)”  has  Green  Building  Councils  in  eight  countries 
work  with  their  governments  and  industry  stakeholders  to  explore  how  key  indicators  on 
whole-life  carbon,  circularity  and  indoor  air  quality  can  be  practically  implemented  on  a 
pan-European scale. It is about creating the infrastructure required to mainstream the EU-
wide framework on sustainable buildings called Level(s). The project looks at how Europe’s 

7  The  Commission  has  developed  guidance  (SWD(2020)  205  adopted  on  17  September  2020  for  Member  States  on  the 
Recovery  and  Resilience  Plans,  illustrating  reforms  and  investments  linked  to  the  green  and  digital  transitions  including 
building renovation. 

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leading  green  building  certification  schemes  can  align  with  this  framework  and  to  provide 
more comparable data on the environmental performance of buildings. It moreover supports 
public  procurement  by  working  with  cities  and  public  authorities  to  align  indicators  on 
whole-life carbon, circularity and indoor air quality into procurement standards and covers 
training of public authorities as well as for product manufacturers. 

The H2020-funded project BUILD UPON, carried out by Green Building Councils, engaged 
and  empowered  a  critical  mass  of  stakeholders,  helping  them  define  and  implement  their 
National Long-Term Renovation Strategy (LTRS) in 13 countries. A 'RenoWiki' was set up to 
improve  stakeholder  understanding  and  dialogue  and  exchange  within  the  stakeholder 
community was promoted through workshops taking place at local, national and European 
level,  attended  by  over  3300  key  stakeholders.  The  workshops  resulted  in  a  set  of 
recommendations, the "RENOmmandments", to the governments. 

The  BeREEL  project  funded  under  LIFE  as  a  Strategic  Integrated  Project  supported  the 
development  of  the  Long-Term  Residential  Renovation  Strategy  for  the  Flanders  Region  in 
Belgium. 

5. EU budget proposed to fund technical support services and 
advisory hubs  

Technical  assistance  is  critical  to  the  success  of  the  Renovation  Wave,  helping  project 
developers  aggregate  smaller  projects,  supporting  private  and  public  intermediaries  to 
implement  or  facilitate  the  investments  and  covering  staff  costs  to  establish  project 
development units on the ground.  

The European Local Energy Assistance (ELENA) facility, funded currently under Horizon 
2020,  has  been  proposed  to  be  continued  in  2021-2027  under  the  InvestEU  Advisory  Hub. 
Over the period 2014-2020, the facility was endowed with a total amount of EUR 282 million 
(including  a  reinforcement  of  EUR  97  million  to  support  dedicated  financing  of  building 
renovation in the residential sector8, notably the social housing sector). A joint initiative of the 
Commission  and  the  EIB,  ELENA  provides  project  development  assistance  in  the  form  of 
grants  to  final  beneficiaries’  for  the  preparation  of  large  investment  projects  in  energy 
efficiency,  integrated  renewable  energy  and  sustainable  transport  in  cities.  The  ELENA 
facility is complemented by the PDA calls managed by EASME to support smaller projects.  

A  large  investment  programme  in  Ljubljana  (Slovenia)  for  the  energy  retrofit  of  the  public 
buildings with focus on nursery schools supported by ESCOs. In this case, EUR 1 million of 
technical assistance triggered EUR 49 million EUR of investments. 

Another example is the implementation of the Sustainable Energy Action Plan for the County 
of  Tipperary  in  Ireland,  where  ELENA  assistance  addressed  the  barriers  to  financing  of  a 
large  number  of  EE  projects  by  covering  costs  of  feasibility  studies  and  energy  audits, 
business case development and procurement. The sectors targeted are private homes, public 
and tertiary buildings. 

8 Report available at https://ec.europa.eu/info/horizon-europe-next-research-and-innovation-framework-
programme/mission-area-climate-neutral-and-smart-cities_en 

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The  PDA  project  PRODESA  aims  at  launching  sustainable  energy  investments  of 
approximately EUR 20 million in public buildings and lighting in seven municipalities in the 
Athens Metropolitan Area. First of its kind in Greece, it will apply a bundling approach (also 
across  municipalities)  combined  with  a  tailored  pooling  of  financing  solutions.  Bundling  of 
fragmented  municipal  projects  aims  at  achieving  adequate  (bankable)  scale,  reasonable 
payback  times  and  risk  diversification,  whereas  the  pooling  of  resources  targets  the 
optimisation of financial results, as well as enhanced contributions by the private sector  (in 
particular also ESCOs). 

The proposed Technical Support Instrument (TSI) can, upon request, support the Member 
States in designing, developing and implementing reforms in the area of building renovation, 
also  in  the  context  of  the  Recovery  and  Resilience  Facility.  This  includes  technical  support 
for: 

 

targeted reforms aimed at scaling up investments in building renovation, including 
private homes and public buildings such as hospitals and schools. Among other things, 
the  technical  support  can  promote  the  effective  use  of  innovative  financing 
instruments, improve management processes and data availability on public buildings, 
provide easy access information for citizens interested in renovating their house, and 
support the adoption of digital technologies in the building sector; 

 

  developing  and  implementing  sound  long-term  renovation  strategies  or  roadmaps, 
including through the design of dedicated policies and programmes which will provide 
certainty and a clear path ahead for investors, public authorities and citizens; 
improving  the  capacity  of  public  administrations  involved  in  building  renovation, 
for example by setting up good coordination between public bodies and public-private 
partnerships  at  various  levels  including  review  of  the  allocated  responsibilities,  and 
strengthening  human  resources  management  to  ensure  that  the  public  administration 
has the necessary skills in the area; 
improving  the  capacity  of  social  housing  associations,    housing  cooperatives  and 
organisations  improving  affordability  by  participation  of  owners  and  residents  in 
renovation and housing projects, such as housing and energy cooperatives, especially 
in regions where they are less developed; 

 

  preparing  and  implementing  reforms  to  be  undertaken  under  the  Recovery  and 
Resilience  Facility  and  to  boost  renovation  investments  needed  for  a  sustainable 
recovery. 

Cohesion  policy  funding  may  also  be  used  by  Member  States  and  regions  for  energy 
efficiency-related technical support, which can be provided in the form of stand-alone grant 
or as a part of financial instrument operation. 

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