Energy efficiency

Energy efficiency for businesses

Photo by Shutterstock

Energy efficiency for businesses

Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Renewable Resources and Alternative Energy
Sub Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Alternative Energy
Indicative Return
Describes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
10% - 15% (in IRR)
Investment Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Short Term (0–5 years)
Market Size
Describes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
USD 100 million - USD 1 billion
Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.
< USD 500,000
Direct Impact
Describes the primary SDG(s) the IOA addresses.
Affordable and Clean Energy (SDG 7)
Indirect Impact
Describes the secondary SDG(s) the IOA addresses.
Gender Equality (SDG 5) Decent Work and Economic Growth (SDG 8) Climate Action (SDG 13)

Business Model Description

Innovative products and services with a focus on digitalization and good environmental practices that promote energy efficiency through energy audits, training, and consulting, as well as process optimization, use of efficient technology and investment in renewable energy for companies.

Expected Impact

The focus on energy efficiency in Dominican companies drives significant savings, sustainability and contributes to climate change mitigation.

How is this information gathered?

Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.

Disclaimer

UNDP, the Private Finance for the SDGs, and their affiliates (collectively “UNDP”) do not seek or solicit investment for programmes, projects, or opportunities described on this site (collectively “Programmes”) or any other Programmes, and nothing on this page should constitute a solicitation for investment. The actors listed on this site are not partners of UNDP, and their inclusion should not be construed as an endorsement or recommendation by UNDP for any relationship or investment.

The descriptions on this page are provided for informational purposes only. Only companies and enterprises that appear under the case study tab have been validated and vetted through UNDP programmes such as the Growth Stage Impact Ventures (GSIV), Business Call to Action (BCtA), or through other UN agencies. Even then, under no circumstances should their appearance on this website be construed as an endorsement for any relationship or investment. UNDP assumes no liability for investment losses directly or indirectly resulting from recommendations made, implied, or inferred by its research. Likewise, UNDP assumes no claim to investment gains directly or indirectly resulting from trading profits, investment management, or advisory fees obtained by following investment recommendations made, implied, or inferred by its research.

Investment involves risk, and all investments should be made with the supervision of a professional investment manager or advisor. The materials on the website are not an offer to sell or a solicitation of an offer to buy any investment, security, or commodity, nor shall any security be offered or sold to any person, in any jurisdiction in which such offer would be unlawful under the securities laws of such jurisdiction.

Read More

Country & Regions

Explore the country and target locations of the investment opportunity.
Region
  • Cibao Norte
  • Valdesia
  • Enriquillo
  • Yuma
  • Ozama
Learn more

Sector Classification

Situate the investment opportunity within sustainability focused sector, subsector and industry classifications.
Sector

Renewable Resources and Alternative Energy

Development need
According to the IX Business Convention of the National Council of Private Enterprise (CONEP), in its strategic proposals for the development of the Dominican Republic established "Implement alliances, agreements and business agreements to achieve the commitment of the private sector in meeting the country goals of the Sustainable Consumption and Production Accelerator" (1).

Policy priority
The multi-year public sector plan 2021-2024 proposes to promote the implementation of sustainable production and consumption by: 1) REGULATING the sustainable management of natural resources, 2) PROMOTING clean energy production, 3) PROMOTING sustainable attitudes and practices, 4) REGULATING integrated waste management and 5) PROMOTING innovation and sustainable business" (2).

Gender inequalities and marginalization issues
Women account for 35% of the workforce of the world's leading renewable energy companies, a percentage that far exceeds their representation among traditional energy companies, according to data from the International Renewable Energy Agency (IRENA).

Investment opportunities introduction
There are investment opportunities in solar and wind energy projects, supported by government incentives and financing programs (3).

Key bottlenecks introduction
Challenges include financial constraints, regulatory barriers, and the need to strengthen grid and storage infrastructure to efficiently integrate renewable energy.

Sub Sector

Alternative Energy

Development need
The energy sector is the country's main emitter, with a contribution of 62.75% to total emissions and a 90.39% share in the GHG balance in 2015. The main cause is the sustained increase in energy consumption, associated with the increased burning of fossil fuels. In 2022, 83.87 % of electricity generation was based on fossil fuels (4,5).

Policy priority
The DR climate goal for 2030 is to have reduced greenhouse gas emissions by 27% with respect to the BAU (business as usual) trend scenario, taking 2010 as the base year, with estimated emissions in 2030 of 51,000 GgCO2eq. Of the 27%, 20% is conditional on external finance and 7% conditional on domestic finance. Of these 7%, the private sector is responsible for 5% (6).

Gender inequalities and marginalization issues
: Only 16% of the positions on the boards of directors of large international electricity companies are headed by women and, at the current rate, it would take 72 years to reach 40%, according to data from the EY consultancy. In the energy area in the country, 95.1% of those registered are men (7, 8).

Investment opportunities introduction
The national government decided to promote the development of renewable energies through a model based on private investment rather than public investment. A clear and transparent legal framework was created to protect the rights of participants.

Key bottlenecks introduction
Faced with global commitments on climate change and the increase in demand for electricity due to the country's high economic growth, it is necessary to implement far-reaching reforms at the political, institutional, regulatory, and financial levels to help increase the share of renewable energies and improve energy efficiency.

Industry

Solar Technology and Project Developers

Pipeline Opportunity

Discover the investment opportunity and its corresponding business model.
Investment Opportunity Area

Energy efficiency for businesses

Business Model

Innovative products and services with a focus on digitalization and good environmental practices that promote energy efficiency through energy audits, training, and consulting, as well as process optimization, use of efficient technology and investment in renewable energy for companies.

Business Case

Learn about the investment opportunity’s business metrics and market risks.

Market Size and Environment

Market Size (USD)
Describes the value in USD of a potential addressable market of the IOA.

USD 100 million - USD 1 billion

Critical IOA Unit
Describes a complementary market sizing measure exemplifying the opportunities with the IOA.

Energy losses in the distribution process average 28.4%.

According to the World Bank (2017), the global energy efficiency market is US$360 billion. In Latin America and the Caribbean, the demand for energy services is expected to double by 2040. For countries such as Panama and Costa Rica, the percentage loss data only in energy distribution correspond to 13.6% and 10.5% respectively, in the period 2016-2019. In contrast, the DR is 28.4% (10,11,12).

Indicative Return

IRR
Describes an expected annual rate of growth of the IOA investment.

10% - 15%

The return profile of energy efficiency investments depends on the type of product and service or combinations thereof. Thermal insulation of roofs, walls and thermal windows can reduce heat gain and thus the output of air-conditioning equipment. This results in additional savings of about 15%.

Investment Timeframe

Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.

Short Term (0–5 years)

In the case of energy efficiency related projects in the Dominican Republic the cost is 4 years on average according to UNDP interviews with key partners.

Ticket Size

Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.

< USD 500,000

Market Risks & Scale Obstacles

Capital - Limited Investor Interest

Dependence on fossil fuels, changes in energy policies and low-price competition. Scale obstacles: Limited efficient infrastructure and lack of entrepreneurial awareness.

Impact Case

Read about impact metrics and social and environmental risks of the investment opportunity.

Sustainable Development Need

Energy shortages and high costs: The Dominican Republic faces power outages and high electricity costs, affecting businesses and the quality of life of the population.

Greenhouse Gas Emissions: Dependence on fossil fuels for energy generation contributes to greenhouse gas emissions and climate change.

Gender & Marginalisation

According to data from INFOTEP's EmpléateYA Program, "there is evidence of occupational segregation by gender among job seekers: the areas of preference for work are totally different between women and men. For example, in the energy area, 95.1 % of those registered are men (16).

Expected Development Outcome

Promote a citizen and business culture of energy efficiency, by inducing practices of rational use of electricity and promoting the use of equipment and processes that allow less use or better use of energy (17).

Promote the rational use and responsible consumption of fuels at the national level.

Implementation of energy efficiency and other technologies for cement production and a massive energy efficiency and cleaner production program in MSMEs.

Gender & Marginalisation

Increase female participation in the energy industry (95.1% are men), reducing the gender gap in energy jobs through inclusive training programs.

Primary SDGs addressed

Affordable and Clean Energy (SDG 7)
7 - Affordable and Clean Energy

7.2.1 Renewable energy share in the total final energy consumption

7.3.1 Energy intensity measured in terms of primary energy and GDP

7.a.1 International financial flows to developing countries in support of clean energy research and development and renewable energy production, including in hybrid systems

Current Value

The country currently has a draft Energy Efficiency and Rational Energy Use Law. In addition, the government created presidential decree 158-23 declaring the implementation of an energy saving and efficiency policy in public administration a high national priority (18).

Target Value

The country aims to produce 25% of its electricity from renewable energy sources by 2025.

Secondary SDGs addressed

Gender Equality (SDG 5)
5 - Gender Equality
Decent Work and Economic Growth (SDG 8)
8 - Decent Work and Economic Growth
Climate Action (SDG 13)
13 - Climate Action

Directly impacted stakeholders

People

Company employees enjoy more comfortable and healthier environments in efficient buildings, improving well-being and labor productivity.

Gender inequality and/or marginalization

Planet

Reducing CO2 emissions contributes to climate change mitigation and improves air quality, benefiting health and the environment.

Corporates

Companies achieve significant savings in operating costs by adopting energy efficiency measures, increasing their competitiveness and financial sustainability.

Public sector

Reducing energy demand supports national energy security and sustainability goals.

Indirectly impacted stakeholders

People

Gender inequality and/or marginalization

Job opportunities in the energy sector improve inclusion and empowerment, reducing gender gaps and marginalization.

Planet

Corporates

Public sector

Investments in energy efficiency can free up resources for other areas of government.

Outcome Risks

Increased Consumer Prices: Increased investment costs could lead to higher prices for products and services, affecting consumers.

Unanticipated Job Displacement: Automation and efficient technologies may reduce jobs in certain sectors, creating unemployment challenges.

Technological Dependence: Excessive dependence on technology can generate vulnerabilities to interruptions in electricity supply.

Gender inequality and/or marginalization risk: Without an inclusive approach, job opportunities may not benefit everyone equally, exacerbating gaps.

Impact Risks

Disappointment in Economic Savings: Insufficient financial results may discourage investment in energy efficiency, limiting benefits (19).

Unanticipated Rebound Effects: Improved efficiency could lead to increased energy consumption, negating benefits (20).

Negative Environmental Impact: Inappropriate measures may result in higher-than-expected environmental impact, compromising sustainability (21).

Gender inequality and/or marginalization risk: Lack of inclusive approach could perpetuate gender gaps and marginalization in access to job opportunities and benefits (22).

Impact Classification

B—Benefit Stakeholders

What

Encourage responsible fuel consumption and the rational use of fuel resources both in citizen behavior and business operations.

Who

Individuals and companies, particularly those who are currently less aware of or engaged in energy-efficient practices.

Risk

Risks include the high initial costs of technology implementation, possible disruption in current industrial processes, and the need for technical training and support.

Contribution

Provide technological solutions, financial incentives, or expertise in energy efficiency.

How Much

Measurement can be based on the reduction of energy consumption in these sectors, the adoption rate of new technologies, and the decrease in carbon emissions.

Impact Thesis

The focus on energy efficiency in Dominican companies drives significant savings, sustainability and contributes to climate change mitigation.

Enabling Environment

Explore policy, regulatory and financial factors relevant for the investment opportunity.

Policy Environment

National Multiannual Public Sector Plan 2021-2024: redesigns the planning process since the main objective of public policies should be to improve the quality of life of the people (23).

National Energy Plan 2022-2036: Defines goals and strategies for the diversification of the energy matrix, guiding the direction of the energy transition and providing a political framework (24).

Decree 158-23 for the implementation of an energy saving and efficiency policy in all public administration bodies under the Executive Branch, including the central and decentralized public administration, as well as autonomous and decentralized bodies (25).

Financial Environment

Financial incentives: Access to Financing: Multiple banks offer low-interest loans for renewable projects, facilitating investment.

Fiscal incentives: Law 57-07 grants tax exemption on equipment and supplies for renewable energy projects, reducing upfront costs.

Other incentives: Public Auctions: The government conducts auctions for energy efficiency contracts, promoting competition and securing short- and medium-term contracts.

Regulatory Environment

National Development Strategy Law 1-12: Establishes the promotion of clean energy sources as a key objective, guiding the regulatory framework towards the energy transition (26).

General Law of Environment and Natural Resources 64-00: Establishes environmental regulations, promoting sustainable practices in energy investment (27).

Law 57-07 on Incentives for Renewable Energy and Special Regimes: Establishes fiscal incentives and mechanisms to promote investments in renewable energy, providing a regulatory framework for the transition and business model (28).

General Electricity Law 125-01: Facilitates the integration of renewable energy generation in the national electricity system, establishing the basis for the adoption of clean and sustainable energies (29).

Dec. No. 202-08 which approves the Regulations for the application of Law No. 57-07, on Incentives for the Development of Renewable Energy Sources and its Special Regimes (30).

Marketplace Participants

Discover examples of public and private stakeholders active in this investment opportunity that were identified through secondary research and consultations.

Private Sector

AKUO Energy, ALIGROUP BIOMASS, EASI, Empresa Generadora de Electricidad Haina (EGE Haina).

Government

Ministry of Energy and Mines, National Energy Commission, Ministry of Environment and Natural Resources and Electricity Superintendence.

Multilaterals

German Development Cooperation Agency (GIZ), the United States Agency for International Development (USAID) and UNDP.

Non-Profit

Climate & Clean Air Coalition

Public-Private Partnership

Target Locations

See what country regions are most suitable for the investment opportunity. All references to Kosovo shall be understood to be in the context of the Security Council Resolution 1244 (1999)
country static map

Cibao Norte

The technical criteria depend largely on the provinces of the Dominican Republic that have the largest number of companies and that will have a great impact if they implement energy saving and energy efficiency actions. Keys are Santo Domingo, Santiago and Higüey.
urban

Valdesia

semi-urban

Enriquillo

urban

Yuma

semi-urban

Ozama

References

See what sources were used to establish the investment opportunity’s data and find resources that could be consulted to explore more.