257 ENERGY LAW Instead of the term “ESCO,” the companies are referred to as “energy efficiency consultancy companies” under the Law and the Resolution. Relevant legislation requires the companies to obtain a certificate of authorization to carry out such service. As per Article 4(1)(t) of the Law, companies that would carry out training, study, consultancy and application activities, may obtain an authorization certificate from the General Directorate of Electrical Works Implementation Administration. On the other hand, to carry out training, authorization and monitoring activities, universities and trade associations may obtain an authorization certificate from the General Directorate of Electrical Works Implementation Administration with the approval of the Energy Efficiency Coordination Board. Financing Method An energy performance contract is a notable financing method for energy efficiency projects. Under such model, an ESCO bears the technical risks of the project and the financing burden depending on the project type. Transfer of technical and financing risk to the ESCO makes the project feasible for the administration and the private sector without allocating a significant resource. One of the advantages of energy performance contracts as a financing method, is the recollection of the investment from the amount of saved energy. Once the repayment is completed, the profit from the savings solely remains on the project owner (administration or private company). Two different models based on the party to undertake financing of the project are the shared savings model and the guaranteed savings model, as presented, below. Shared Savings Model In the shared savings model, the ESCO undertakes the financing of the project. In this regard, an initial investment is paid to the project by the ESCO. Once the energy saving occurs following the implementation of efficiency measures, the ESCO takes its share from the saved amount. Thus, the initial investment is recollected from the amount of savings generated as a result of the project; in other words, over the project profit.
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