In the field of financial engineering , we speak of ” third party investor “ to designate a partner (the “third party”, public or private ) who intervenes in a system where a customer could not buy alone a good or a service, fault sufficient advance funds.
The “third party” intervenes when he judges the investment profitable for both parties (the client and the investor ), for example when it allows significant savings in heating (and often at the same time a smaller contribution to climate change , greenhouse gas emissions ), electricity , water , transportation , time savings, etc.
It is a system that is different from the loan , which meets the same needs, but by transferring the financial burden to an actor who has the means to assume it and to wait for the return on investment to repay in full, with a profit margin.
The third-party investor and his client may also benefit from certain aids ( subsidies , tax exemption , bonuses ).
This usually involves improving the efficiency of a system, for example by reducing the energy consumption of a “user” without increasing his annual budget (unless price increases); the customer will gradually repay the third party investor of the capital he has invested on behalf of his client as well as the remuneration of this capital and the possible financial risk taken by the third party in the transaction.
It is the “third party” (a bank , a solidarity bank or more often a specialized company) that – in the place of the client (individual, industrial manager or a community) – pre-financing (that is, takes over its charge) studies, works and management or purchase of the service concerned, when this third party thinks (or is certain) that the operation is profitable for him, that is to say when he considers that his work and the added value he brings will be reimbursed through the estimated savings generated by the operation.
This is very often the case, for example, for energy saving investments (roof insulation, exterior insulation, purchase of a new boiler, installation of a Canadian well,solar panels , etc.);
The third investor usually takes (check in the contract) the role of Client delegate , and as such represents and defends his client against the architect, administration, contractors or suppliers of materials or equipment.
The third party calculates that after a certain time the investment will be repaid, and it will finance for a certain time (so as to ensure a certain profit) by the new savings made.
The time of the contract, the operation is “white” for the client; for example x years, instead of paying his bill to his gas and electricity supplier, he will pay the third party investor who will pay on the savings made.
After a certain time (provided by the contract), while the investments have been made profitable, the operation is closed (for example in the case of an operation of energy saving, the customer does not pay more than what he still owes his energy supplier). The net financial gain is for the customer (for example, if his installation produces more electricity than it consumes and this electricity is paid back on the grid, it is the supplier who becomes a debtor of money towards this customer who gets rich where he once spent).
This is a win-win system for both parties, if the third party is not too “greedy”. Since a relationship of trust is necessary, some third parties play the game of transparency towards the customer.
The great benefit to the customer is that he no longer has to worry about the technical, administrative and financial management of the investment program, or even the material management of the acquired property if it is outsourced. by the third party investor to a competent company to do so.
The third-party investor often plays only a role of financier and assembler , he calls for tenders to play the rules of competition with the subcontractors who will take care of the technical aspects of the project, but he remains guarantor of the performance and the quality of the realization and any corrective actions.
The third party investor provides full funding for the investment program , which generally includes:
- studies and engineering services (including specific authorizations (eg in the protection area), declaration or building permit );
- research and payment of contractors and subcontractors mobilized;
- infill funding costs ;
- his own fees.
Generally, the Customer can, when he wishes (and if he has the means) to reimburse the investment or the balance remaining due (without any re-employment allowance) thus saving the financial expenses still foreseen. He stops paying when:
- full repayment of the CTR (total cost of completion) of the project is acquired;
- or when the end of the maximum repayment term under the contract is reached, and if there remains a balance due when the performance was insufficient, this balance is borne by the third party investor.
Any increase in prices increases the customer’s financial “gain”, and in the energy sector in particular, any additional savings (linked to an increase in the price of energy for example) is also often reflected in a reduction in energy emissions. greenhouse gas (but not necessarily if it is accompanied by increases in the production of objects or services using fossil fuels ).
Difficulty for the third-party investor
He must demonstrate a good foresight and anticipation ability and be able to insure himself against risk. For example, in the energy sector, if the general trend is for energy prices to rise, there are price fluctuations whereas the third-party investor must commit on the basis of his assessment of the potential of energy. economy; if he assures his client that the latter will do with the planned investment € 5,000 / month of savings and that this threshold is not reached, it is the third-party investor who pays the difference. In some countries, the purchase price of electricity is guaranteed by the State for several years, or even several decades (for example for the purchase of electricity fromphotovoltaic ).
In the field of energy
The global, European (and therefore national) targets for combating greenhouse gas emissions and adapting to climate change imply the introduction of “factor 3 or 4” renovation systems or positive energy.
If the goal of economy is very ambitious, these investments ( insulation by the outside , skylights , wells Canadian , etc., will often only partially (or in the long term) refunded by the energy saving In order to value the savings at the time of the works and “at one time”, the thermal renovation companies must mobilize the traditional third-party investment, but also the available subsidies (of the collectivities, of Europe, of the Agencies such as the ‘ ADEME in France). They take this responsibility, sometimes via a single point (to create however in most countries), so that the customer does not have to fill out tedious records requestsfinancial help.
The third-party investor can become a real estate developer , able to take charge of the entire process, from audit to completion and final evaluation. In particular, to achieve factor 4 objectives, third-party investors must have the best diagnostic capabilities, scientifically and technically very well supported. It must also mobilize a financial resource not too expensive, and in the long term (monitoring over 20-25 years).
In France, the INESTENE chaired by Pierre Radanne has long defended the principle of the third-party investor. In the 1980s , Caisse des Dépôts created a Cynerg tool , which could possibly be reactivated and improved (with the support of Ademe and the communities). Tools such as Isoltohave been tested. Agencies such as FEDESCO in Belgium, the Gratz agency in Austria, the Berlin energy agency are doing third-party investment, but on the basis of a model that does not yet make it possible to reach factor 3 or 4. The Rhône-Alpes region, the Nord-Pas-de-Calais, cities (including Paris) are thinking about developing new tools of this type, including the support of the Energy Cities network , and to try to better meet the demands of the Covenant of Mayors .
In early 2013, according to Cécile Duflot , “Minister of Equality of Territories and Housing”, in France, the energy transition involves a massive thermal renovation of buildings, which could ultimately allow the creation of 75,000 jobs 1 . The French objective is to improve energy efficiency for 500,000 homes to be renovated each year before the end of the five-year period of François Hollande , with the help of a financing mechanism such as the PTZ , pending the creation of a one-stop-shop for solutions technical, ad hoc professionalsand possible financial aid (including third-party financing) 1 .
In the field of cinema exhibition [ change | change the code ]
The 35mm standard projection from the original film, is gradually replaced at the beginning of xxi th century by the digital projection . In this mutation, cinemas must invest in new equipment very expensive, while the economy that results from the abandonment of silver media benefits another profession, the distribution of films .
Thus appeared third-party investors: these companies offer technical and financial solutions enabling the deployment of equipment for digital projection, based on the collection of virtual copy fees which make it possible to take care of a part consequent investment of cinemas by film distributors.
Various fields of application
This form of investment is used in many fields such as industrial investment, creation ( music , cinema ), computerization of a service, investment for telework , etc. Although the interest generated by this form of investment does not always have ethical foundations (the third-party financing could also finance a mafia and criminal economy), it is – under certain conditions of competence transparency and good governance – often facilitator of sustainable development 2especially in the energy field, where savings can be very large, but with heavy investments for the citizen or energy-consuming entity.
In Belgium , the Federal Government created in 2005 “FEDESCO 3 “ and is a third-party investor for federal public buildings and federal public enterprises, and is financed by the Kyoto fund (€ 1.5 million of share capital). and by borrowings (of 4 million euros).
In particular, the Walloon Region hopes to create around 15,000 jobs in the building renovation sector by supporting third-party investment to renovate 400,000 homes 4 . In 2005, a Global Energy Cost Reduction Fund (public limited company with 2.5 million euros in capital, a subsidiary of the Federal Investment Corporation , which – with the Regions – will make a third -investment (with state guarantee) for low-income households.
Many countries have created funds, which in the fight against climate change (eg Argentine Carbon Fund ) can encourage third-party investment or contribute directly to it.
In France, in 2009, Neoen and the group’s subsidiary Fayat , Castel and Fromaget , created a financial company to offer volunteer farmers photovoltaic hangars hosting at least 1,000 m 2 of solar panels (targeting sunny areas such as Provence -Alpes-Côte d’Azur , Languedoc-Roussillon and Midi-Pyrenees ). This third-party investor installs the panels and builds at his own expense the sheds and the electrical installation, he pays the taxes and taxes related to the hangar. The farmer becomes owner and beneficiary of the facility at the end of the lease which is 30 years5 .
Brakes and disadvantages [ change | change the code ]
In the field of real estate and in particular of rental housing or co-ownership , it is the resident and not the lessor or the trustee managing the co-ownership that benefits the most from the investments of energy savings. These may not measure the value of using a third-party investor. The inhabitant can not then begin the necessary investments (ex: insulation by the outside , installation of solar panels , small wind , change of boiler of a house or rented apartment.) Other brakes exist:
- In the absence of specialized knowledge, it is often difficult to measure the times and places where it would be very profitable to invest.
- In an increasingly fragmented and global economy, people (renters or homeowners) move more and more often in their lifetime. Investing, with or without a third-party investor in the energy field is often an investment that seems medium or long term, that is to say benefiting the future inhabitants and perhaps not to oneself. So often the effort of looking for a third-party investor and negotiating a contract with him is often postponed.
- The banking and insurance offer in this area is very poor.
- It is difficult to find third-party investors financing long-term return operations, or for low-income entities (eg ovens or solar panels in developing countries).
- The finance laws, rules or fiscal traditions, as well as the public procurement code , with however important variations according to the times and the countries, do not often encourage the decentralization of the management of the energy bills, nor the call to long-term systems and public-private partnerships (PPPs) involving a third-party investment, although energy agencies ( Ademe in France, for example) sometimes play almost the role of third-party investors, as well as some funds (bottom-energy, etc.) that these agencies and some communities put in place.
- Sibylline contracts would allow certain third-party investors to sometimes make exceptional profits, without involving their customers, or even benefit from certain crises or wars, causes of sharp increases in the cost of energy. Some suggest full transparency or special procedures for cases of unusual profits (measures that may be a counterpart to measures taken by many communities to facilitate third-party investment through public support). It would be logical and fair that part of this type of profit could be reinvested in working capital allowing third-party investment or in insurance allowing investments a little more risky or less profitable in the short term, but profitable in the long term. 6.
Notes and references
- ↑ a and b Bati-actu & AFP, Thermal renovation: 75,000 jobs could be created in the building [ archive ] (08/01/2013)
- ↑ The third investor, technical serving sustainable development? (PDF, 189,1 KB [ archive ]
- ↑ FEDESCO [ archive ] is a public limited company , incorporated on March 2, 2005 to finance projects ensuring economic and environmental progress , in the field of eco-efficiency of buildings
- ↑ Article of La Libre Belgique , December 14
- ↑ Brief of Batiactu [ archive ] online 2009/09/18
- ↑ Reflections on the modalities of the third investor in energy- By Xavier Desgain [ archive ] – December 14, 2005)