Amsterdam - Investment Fund

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Challenges

In 2010, Amsterdam developed ambitious environmental goals in its Amsterdam Energy Strategy 2040. In order to meet these goals, the city designed a powerful financing instrument called the Amsterdam Investment Fund (AIF), which has 75 million € (USD 103 million) net worth to be invested in projects reducing CO2 emissions, lowering energy bills for citizens and businesses, and creating a healthy environment. All businesses, residents, housing associations and community organizations are contributing toward reaching the Amsterdam’s 2040 energy goals. Most of these parties are willing to invest in sustainable and profitable projects but lack financial resources as well as technical knowledge.

Actions

The AIF provides funding (soft loans, warrantees & equity), not subsidies, to sustainable and profitable projects. Projects are evaluated based on estimated environmental effect per euro and the amount of co-investment involved. The higher the amount of co-investment, the better the rating of the project. Additionally, rating is based on four qualitative assessment criteria: innovation, duplication, diversification and visibility. Customized instruments have been devised to fit a variety of actors: large-scale commercial projects; smart energy startups; sustainable social initiatives; house owners; and iconic sustainable projects. To spread the word and encourage the submission of proposals, the AIF has launched a strong, cost-effective advertisement campaign, using social networks as well as media outreach.

Projected Outcomes

In 2010, the Fund’s investments helped Amsterdam achieve a 20% emission reduction as compared to 1990 levels. It is projected to contribute to Amsterdam’s C02e reduction by 40% in the year 2025 compared to the year 1990. One of Amsterdam’s primary objectives in creating the AIF was to create an “internal” financing tool to implement the city’s Energy Strategy and broader emissions reduction goals. It also aims to create a climate that encourages citizens to make investment proposals. The response has been strong so far, and is expected to remain so in the future. A key outcome of the Fund is that both citizens and organizations are able to increase the energy efficiency of their homes/offices, and thereby gain protection against increasing energy bills. Tender loans for social initiatives are expected to stimulate cooperation and a bottom-up approach at the neighbourhood level. Moreover, the small business focus of some of the Fund’s instruments promotes the creation of a dynamic, local, job creating, and green economy. Through its active participation in the C40 Sustainable Infrastructure Finance Network, Amsterdam actively shares information and best practices with other global cities.