GCPF and BASE join forces to unlock investments in clean cooling

In a warming world with increasing urbanization and a growing energy demand for air conditioning, Cooling as a Service is set to be a solution to scale up efficient and clean cooling systems.

The Global Climate Partnership Fund (GCPF), managed by responsAbility, and The Basel Agency for Sustainable Energy (BASE) have joined forces to promote the Cooling as a Service (CaaS) business model in the countries the Fund operates.

CaaS is an initiative lead by BASE along with the Kigali Cooling Efficiency Program (K-CEP) that overcomes key market and financial barriers to increase and accelerate the adoption of energy-efficient cooling technologies and the use of climate-friendly refrigerant gases.

Cooling represents one fifth of the total electricity consumed in buildings today – or 10% of all global electricity consumption – and demand is expected to triple by 2050. 4.8bn new units of cooling equipment will be sold globally between 2019 and 2030 and the market is expected to reach USD 170bn by 2030. In many regions, cooling is not only a comfort but also a means of survival with air conditioning and refrigeration necessary for habitable living conditions, food security and life-saving healthcare. However, conventional cooling both consumes a lot of electricity and relies on refrigerant gases that harm the environment. Even though efficient cooling technologies are available, deployment has been limited by the high upfront cost and the reluctance and distrust on energy savings.

Cooling as a Service (CaaS) is a pay-per-service model for clean cooling systems, which eliminates upfront investment in clean cooling technology for customers who simply pay for the amount of air conditioning they use instead of buying and maintaining the equipment, which strengthens incentives for efficient consumption. The technology provider remains the owner of the cooling system, maintains it, and covers all operational costs including electricity, which incentivizes the provider to install and maintain the most efficient equipment. CaaS also encourages manufacturers of cooling technology to design for reuse rather than obsolescence, thus supporting the circular economy. GCPF and BASE are actively supporting its implementation with the Fund Partner Financial Institutions in Sub-Saharan Africa, Latin America and South East Asia specially for end clients in the SME sector.

CaaS has showed a big potential to be introduced not only in residential, commercial and industrial buildings but also in SMEs, as owners do not need to invest in the cooling system and its maintenance, nor bare any performance risk.

GCPF’s mission is fighting climate change by financing energy efficiency and renewable energy projects in developing countries, mainly in cooperation with local financial institutions. The Fund targets all investments that reduce projected greenhouse gas (GHG) emissions by at least 20%. The operation, through the CaaS model, ensures the implementation of the latest technology with high standards of energy efficiency, lower refrigerant leakage rates and the use of more environmentally friendly refrigerant gases, therefore complying with the eligibility criteria of the Fund.

GCPF has joined the CaaS Alliance to help the transition towards clean and efficient cooling. This alliance aims to support the process of mainstreaming the CaaS business model into the markets and gathers technology providers, investors, building networks and international organizations. The CaaS Alliance creates a collaborative environment between stakeholders active in the market as well as facilitators to spread the word about the model, build capacity, and implement the model in different sectors and regions.

As a supporting partner, GCPF will support the mainstreaming of the CaaS model by identifying and facilitating opportunities for pilot projects, exploring the feasibility and implementation of the CaaS model, training financial institutions on the model by organizing workshops on energy efficiency and arranging webinars for technical training, and supporting the marketing and communications efforts. In fact, you can access our first webinar together in the Green Lending Forum.

GCPF and BASE are looking forward to a fruitful collaboration in 2020 and the years to come.