Financing the Renovation of Public Buildings: Mechanisms and Solutions for Local One-Stop Shops

The document serves as a strategic reference for One-Stop Shops (OSS) that aim to coordinate and simplify access to these instruments while ensuring that projects align with EU energy and climate goals.

Non-redeemable funding: the foundation of renovation investment

According to the catalogue, grants and subsidies remain the cornerstone of public-sector renovation financing. They are classified by governance level—European, national, and regional—and complemented by Energy Savings Certificates (CAEs).

At EU level, mechanisms such as the Mecanismo de Recuperación y Resiliencia (MRR), the European Regional Development Fund (FEDER), and the Just Transition Fund (JTF) provide extensive non-repayable support for public building upgrades. In Spain, these instruments are channelled through the Plan de Recuperación, Transformación y Resiliencia (PRTR), which has financed large-scale programmes such as PIREP for public facilities and PREE for existing buildings.

The report also underlines the role of regional FEDER programmes, managed by autonomous communities, in funding actions like envelope renovation, renewable integration, and energy efficiency in administrative and educational buildings. Support levels typically range from 50 % to full cost coverage, depending on the programme’s scope and alignment with EU objectives.

In parallel, Energy Savings Certificates (CAEs)—introduced under Spain’s National Energy Efficiency Obligation System—allow public entities to monetise verified energy savings. The catalogue highlights that CAEs can offset between 5 % and 40 % of project costs, depending on the measure, and can be integrated into procurement procedures or combined with grants when compatible.

Redeemable mechanisms: leveraging loans and market finance

Beyond subsidies, the catalogue dedicates an entire section to redeemable funding sources—loans, bonds, leasing, and equity instruments—that complement limited grant budgets. These include concessional credit lines from public financial institutions such as the European Investment Bank (EIB) through facilities like ELENA, PF4EE, and the European Energy Efficiency Fund (EEEF), as well as InvestEU guarantees.

National and local authorities can also turn to commercial loans, leasing schemes, and green bonds to finance renovation, often repaid through savings generated by efficiency measures. For smaller projects, the report identifies green minibonds, on-bill or on-tax financing, and revolving funds as promising mechanisms to sustain investment and recycle recovered savings into new actions.

The FACILITA catalogue stresses that repayable instruments are essential for scaling up renovation once grant programmes close. By blending concessional loans with grants, local governments can secure long-term investment while maintaining fiscal balance.

Management solutions that link finance and delivery

Financing mechanisms are only effective when paired with the right management models. The report details several proven contractual approaches: Energy Performance Contracts (EPCs), Energy Supply Contracts (ESCs), and Power Purchase Agreements (PPAs). These models enable third-party financing—often through Energy Service Companies (ESCOs)—so that repayment is tied directly to measured energy savings.

FACILITA also highlights renovation bundling, where multiple public buildings are grouped into a single investment package. This aggregation increases project scale, attracts lenders, and reduces transaction costs—an approach particularly suitable for OSS coordination.

The financial framework for One-Stop Shops

A central contribution of the catalogue is its proposed financial framework for OSS creation and operation. This framework combines public and private instruments into a flexible structure adaptable to regional capacities and administrative maturity levels. It includes a decision-support tool to help authorities select appropriate funding mixes according to project type, repayment potential, and local context.

The framework encourages municipalities to use grants as a catalyst and then build revolving or hybrid schemes that ensure continuity. OSS are positioned as strategic intermediaries that centralise expertise, support grant applications, negotiate with financial institutions, and ensure compatibility between instruments such as MRR subsidies, CAEs, and EPCs.

Towards integrated financial solutions

The publication concludes that the real challenge for public building renovation is not the scarcity of funds, but the fragmentation of access. OSS can overcome this by unifying technical, legal, and financial management under one structure, ensuring that every euro invested translates into measurable energy savings and reduced emissions.

By deploying the mechanisms and solutions outlined in the FACILITA catalogue, local and regional authorities can move from isolated projects to sustained renovation programmes—anchored in sound financial design and supported by integrated One-Stop Shops.