Energy efficiency and the finance sector

This report presents a detailed survey of current lending activities and related policy issues in advancing energy efficiency within the finance sector. Drawing on structured interviews with sixteen financial institutions—including public and private banks, development banks, and innovative financial service providers—it captures both the external and internal drivers shaping investment decisions. The analysis distinguishes between public-sector institutions, which leverage government mandates to offer concessional finance and technical assistance for energy efficiency, and private-sector actors, where regulatory support and project scale remain critical constraints. The study identifies significant barriers such as lack of standardized definitions, measurement challenges, and limited internal resources for product development. It highlights the roles of innovative models, aggregation mechanisms, and credit guarantees, particularly in developing economies. The findings provide actionable recommendations for embedding energy efficiency in financial products and business strategies, and emphasize the need for coherent policy frameworks and targeted incentives.