RAK Municipality says retrofitting 3,000 buildings by 2040 will create strong project-pipeline for ESCOs

Ras Al Khaimah, UAE, 14 February 2019: With a target to retrofit 3,000 buildings by 2040, Andrea Di Gregorio, Director, Energy Efficiency and Renewables Office (Reem), Ras Al Khaimah Municipality (RAK), emphasised that there will be a strong pipeline of projects for Energy Service Companies (ESCOs) and Energy Auditing Companies (EACOs) that are considering setting up activities in the emirate. He said, "The fact that the government is engaged in a number of project evaluations, supported by the resolution issued by the Ruler of RAK promoting intervention of the government in building-retrofit projects, generates a pipeline of projects." [caption id="attachment_25117" align="alignright" width="219"] Andrea Di Gregorio, Director, Energy Efficiency and Renewables Office (Reem), Ras Al Khaimah Municipality[/caption]

In addition, Di Gregorio said, the local government is introducing monetary incentives through RAKEZ and DED as part of its strategy to reinforce the local market for energy-efficient products and services. "For those ESCOs and EACOs that want to set up activities in RAK, the incentives are quite significant," he said. "RAKEZ decided to provide a discount equivalent to about 60% of the set-up fees for companies to establish a brand new company in RAK. DED applied a 100% cut, so they are completely waiving local fees." These incentives, he said, will be kept for at least three years.

Di Gregorio also discussed the RAK contracting model for ESCOs, saying that what sets it apart from other models in the region is the simplified tendering process. In any tender, out of the many ESCOs accredited, he said, the Municipality pre-selects only five, following an assessment of the company's background and experience with regard to the type of project being tendered. The five ESCOS, he said, will then be asked to submit a proposal. "That proposal doesn't require an investment, just a walk-through audit," he explained. "ESCOs can benefit in two ways. One benefit is having more chance to have projects, because there would be only four other competitors. And the investment required from them at this stage is not high; they just have to come to the site, look at the equipment, formulate ideas and propose. Once we see the final responses, we select one ESCO to go into detailed discussions, so the ESCO has a high chance of getting a contract."

Hannah Jo Uy is Assistant Editor at Climate Control Middle East magazine. She may be contacted at hannah@cpi-industry.com