Accounting issues

Given its objectives in terms of total volumes of operations, a key issue for the ESFA project is to facilitate the financing of operations without having a negative impact on the public debt (Maastricht criteria), at least for a substantial part of operations. It seems too ambitious to obtain an agreement to implement a direct derogatory deficit rule for investments in EE projects. However, the European system of accounts should be able to recognize the very specific nature of EE projects that can “produce negative energy” and as a result financial savings, which has no equivalent in other infrastructure projects in the public sector. The essential role of energy in our economies should also be taken into account.

The ESFA project can rely on:

• an off-balance sheet treatment of the public guarantee from which the ESFA will benefit;
• the treatment of the ESFA as a financial intermediary outside the scope of government;

The European System of Accounts (ESA 2010) allows an off-balance sheet treatment of guarantees such as the guarantee from which the ESFA will benefit, unless the guarantee is called or if it is known that it will be called.

• The financial structuring will be calibrated so that the public guarantee is never called, the risk being ultimately a risk of non-payment by public administrations and/or by private operators, i.e. generally large industrial groups;
• The State intervenes as ultimate financial guarantor beyond the ESFA’s own funds on terms yet to be determined.

Some local authorities may wish to borrow directly to achieve EPC operations. In this case the debt will appear in the French public debt.

The CPPE (Contrat de Partenariat de Performance énergétique) is a very effective tool taking into account the specificities of EE projects. The DG Energy (EU) itself recognizes the need for a European accounting framework to favor EE. The project’s vehicle would be the CPPE under the ESA 2010 and Eurostat regulations, where the majority of risks are effectively transferred from the public authority to the private partner, in accordance with Eurostat’s recommendations.[1]

We know the image of PPPs has been tarnished, as they have sometimes been wrongly used to deconsolidate infrastructure projects, in conditions of risk transfer and overall costs that have been criticized by the French Cour des comptes[2]. The CPPE considered in this project will make possible the financing of balanced projects that will avoid these pitfalls.

However, the project requires further investigation, for example on Eurostat rules in relation with project finance and the fact that, in certain conditions, such financing understandably does not impact the public debt (current exchanges with the public administration).[3]