Local public real estate assets total around 280 million square meters, representing a vast energy renovation project. To facilitate the financing of these improvements, intracting has been introduced. This financial system, already in place in French universities, is accessible to all managers of public real estate and serves as both a financing solution and an asset management tool. Here is an overview of intracting.
Interacting: what is it?
Intracting represents a financing strategy aimed at improving energy efficiency within public infrastructures, such as those belonging to local authorities, higher education institutions, healthcare establishments, or even energy unions.
This financing mechanism, inspired by an initial German concept launched in Stuttgart in 1995, is offered in France by the Banque des Territoires, a branch of the Caisse des Dépôts et Consignations (CDC). Since its introduction in 2016, this system has been tested mainly in the university context. However, there is an expansion of its use for energy renovation in various public establishments such as hospitals, libraries, sports facilities, city halls and schools.
In essence, intracting provides repayable advances which facilitate the carrying out of energy optimization work. These works, often small-scale, are chosen for their ability to generate a rapid return on investment. The funds saved from reducing energy consumption can then be reallocated to other, larger energy improvement projects. In short, intracting seeks to establish a beneficial cycle to improve the energy efficiency of public buildings.
What is the use of intracting?
Therenovation energy is crucial given that real estate is a major contributor to greenhouse gas emissions (accounting for approximately 43% of energy consumption and 23% of CO emissions).2 in France in 2021 according to the government). Furthermore, many public buildings show signs of aging, whether at the structural level.or interior materials (nearly half of buildings in France were built before 1975). Thus, local authorities find themselves constrained bythe state, notably via the ELAN law and the tertiary decree, to improve energy efficiency, despite the absence of the necessary financial resources.
In this context, intracting offers an alternative to traditional means of financing such as loans or the use of equity, by specializing in supporting energy renovations. Other options, such as energy saving certificates (EEC) and the energy performance contracts (CPE), also exist and can often be combined with intracting for increased efficiency.
The 4 objectives of intracting
Intracting is oriented towards achieving four fundamental objectives:
- The realisation of quick profits, allowing additional funds to be released;
- The capitalization of savings generated on energy expenditure, which are then reallocated to a dedicated budget line, ensuring the continuity of financing of energy efficiency initiatives;
- A rigorous management, meticulous monitoring and precise evaluation of the measures taken. This system requires the active commitment of the various services, in particular via the expertise of a flow manager, promoting the strengthening of collective skills within the organization;
- Transparency and clarity in the implementation of actions thanks to multi-year programming defining the sums invested, the actions to be undertaken and the objectives to be achieved.
Intracting: how its financing works
Intracting is based on the establishment of a specific budget item dedicated to energy efficiency within the accounting of public entities. A special fund is established and can be endowed by various means. It is common for a portion of the funding to come directly from the municipality concerned. To complete this financing, the Caisse des Dépôts et Consignations steps in to cover approximately half of the project costs, by offering an advance at a reduced interest rate.
What can we implement with intracting?
Intracting targets interventions whose scope varies from modest to moderate, usually valued between 500,000 euros and 5 million euros. The objective is to obtain a return on investment within 5 to 10 years.
Smaller-scale interventions are prioritized first. This is explained by their potential to quickly produce energy savings, thus creating a ripple effect to subsequently finance projects of greater scale.
For example, initial interventions may include maintenance or replacement of ventilation or heating systems. Subsequently, larger projects may be considered, such as complete insulation (roof, walls, etc.), the installation of heat recovery systems or the replacement of exterior closures.
Complementary measures without direct costs can also contribute to the fund by generating savings. For example :
- Reduce heating in the evening.
- Organize an awareness campaign around these eco-gestures, with the use of visual supports such as posters or brochures.
Consolidate an intracting project
Intracting is more akin to an asset management policy than to a traditional financing mechanism. This process requires a forward-looking and strategic approach to real estate investments, rather than impulsive, one-off investment decisions.
To develop a robust intracting project, one must begin with a comprehensive assessment of the existing inventory of public real estate. Carrying out a precise inventory of municipal heritage is crucial. This helps determine which interventions are most pressing and best suited to be incorporated into an intracting plan.
