Promoting energy efficient retrofits in Argentinian low-income ......national standard (IRAM 11603). It ranges from warm in the north to tempered in the central zone and cold with

Promoting energy efficient retrofits in Argentinian low-income houses (Best Sustainable Housing)

Argentina | TDB

1 January 2020

Please submit the completed form to [email protected], using the following name convention in the subject line and file name: “CN-[Accredited Entity or Country]-YYYYMMDD”

Project/Programme Title: Promoting energy efficient retrofits in Argentinian low-income houses (Best Sustainable Housing)

Country(ies): ARGENTINA

National Designated Authority (NDA):

Dirección Nacional de Financiamiento con Organismos Internacionales de Crédito (DNFOIC)

Accredited Entity (AE): TBD

Date of first submission/ version number:

[2019-11-19] [V.0]

Date of current submission/ version number

[2019-11-19] [V.0]

mailto:[email protected]

PROJECT / PROGRAMME CONCEPT NOTE Template V.2.2

Notes The maximum number of pages should not exceed 12 pages, excluding annexes.

Proposals exceeding the prescribed length will not be assessed within the indicative service standard time of 30 days.

As per the Information Disclosure Policy, the concept note, and additional documents provided to the Secretariat can be disclosed unless marked by the Accredited Entity(ies) (or NDAs) as confidential.

The relevant National Designated Authority(ies) will be informed by the Secretariat of the concept note upon receipt.

NDA can also submit the concept note directly with or without an identified accredited entity at this stage. In this case, they can leave blank the section related to the accredited entity. The Secretariat will inform the accredited entity(ies) nominated by the NDA, if any.

Accredited Entities and/or NDAs are encouraged to submit a Concept Note before making a request for project preparation support from the Project Preparation Facility (PPF).

Further information on GCF concept note preparation can be found on GCF website Funding Projects Fine Print.

http://www.greenclimate.fund/how-we-work/funding-projects/fine-print/#p_p_id_56_INSTANCE_4CvAHaIYKHcJ_

PROJECT / PROGRAMME CONCEPT NOTE Template V.2.2 GREEN CLIMATE FUND | PAGE 1 OF 15

A. Project/Programme Summary (max. 1 page)

A.1. Project or programme ☐ Project

☒ Programme

A.2. Public or private sector

☒ Public sector

☐ Private sector

A.3. Is the CN submitted in response to an RFP?

Yes ☐ No ☒ If yes, specify the RFP: ______________

A.4. Confidentiality1 ☐ Confidential

☒ Not confidential

A.5. Indicate the result areas for the project/programme

Mitigation: Reduced emissions from:

☐ Energy access and power generation

☐ Low emission transport

☒ Buildings, cities and industries and appliances

☐ Forestry and land use Adaptation: Increased resilience of:

☐ Most vulnerable people and communities

☐ Health and well-being, and food and water security

☐ Infrastructure and built environment

☐ Ecosystem and ecosystem services

A.6. Estimated mitigation impact (tCO2eq over lifespan)

4.603.220 tCO2eq during the 30 years of the project’s lifespan

A.7. Estimated adaptation impact (number of direct beneficiaries and % of population)

A.8. Indicative total project cost (GCF + co-finance)

USD 101.500.000 project total (USD 100.000.000 investment + USD 1.500.000 for capacity building)

A.9. Indicative GCF funding requested

Subordinated Loan: USD 34.000.000 Grant: USD 1.500.000

A.10. Mark the type of financial instrument requested for the GCF funding

☒ Grant ☐ Reimbursable grant ☐ Guarantees ☐ Equity

☒ Subordinated loan ☐ Senior Loan ☐ Other: specify___________________

A.11. Estimated duration of project/ programme:

a) disbursement period: 5 years

b) repayment period, if applicable: 15

A.12. Estimated project/ Programme lifespan

35 years2

A.13. Is funding from the Project Preparation Facility requested?3

Yes ☐ No ☒

Other support received ☐ If so, by who:

A.14. ESS category4

☐ A or I-1

☒ B or I-2

☐ C or I-3

A.15. Is the CN aligned with your accreditation standard?

Yes ☐ No ☐ A.16. Has the CN been shared with the NDA?

Yes ☒ No ☐

A.17. AMA signed (if submitted by AE)

Yes ☐ No ☐ If no, specify the status of AMA negotiations and expected date of signing:

A.18. Is the CN included in the Entity Work Programme?

Yes ☐ No ☐

A.19. Project/Programme rationale, objectives and approach of programme/project (max 100 words)

There are in Argentina 1,359,078 housings with qualitative housing deficit5. That generates, among other things, a thermal imbalance inside the housing that implies greater energy demand for heating and air conditioning. More than 120 MMtCO2eq could be avoided through improvements in thermal efficiency in these housings.

1 Concept notes (or sections of) not marked as confidential may be published in accordance with the Information Disclosure Policy (Decision B.12/35) and the Review of the Initial Proposal Approval Process (Decision B.17/18). 2 The interventions will be held for 5 years, with a lifespan of 30 years. 3 See here for access to project preparation support request template and guidelines 4 Refer to the Fund’s environmental and social safeguards (Decision B.07/02) 5 The qualitative deficit highlights the existence of aspects that are deficient in part of the housing stock, which can be improved through repairs or change of materials, among others.

http://www.greenclimate.fund/documents/20182/184476/GCF_B.12_32_-_Decisions_of_the_Board___Twelfth_Meeting_of_the_Board__8_10_March_2016.pdf/020edfa1-53b2-4abf-af78-fccf5628db2ahttp://www.greenclimate.fund/documents/20182/184476/GCF_B.12_32_-_Decisions_of_the_Board___Twelfth_Meeting_of_the_Board__8_10_March_2016.pdf/020edfa1-53b2-4abf-af78-fccf5628db2ahttp://www.greenclimate.fund/documents/20182/751020/GCF_B.17_18_-_Review_of_the_initial_proposal_approval_process.pdf/559e7b1c-7f34-44dd-9eff-8fa235714312http://www.greenclimate.fund/gcf101/funding-projects/project-preparation/#step-2-submit-a-ppf-applicationhttp://www.greenclimate.fund/documents/20182/24943/GCF_B.07_11_-_Decisions_of_the_Board_-_Seventh_Meeting_of_the_Board__18-21_May_2014.pdf/73c63432-2cb1-4210-9bdd-454b52b2846b


This Program expects to improve housing with qualitative deficit through energy-efficiency actions in order to reduce GHG emissions associated with energy consumption. In the first stage, 50,000 low-income households will be impacted.

B. Project/Programme Information (max. 8 pages)

B.1. Context and baseline (max. 2 pages) In Argentina, the residential sector accounts for 28.6% of the final energy consumption and is responsible for 12% of national greenhouse gas (GHG) emissions: 7.7% produced by the on-site burning of fossil fuels and 4.3% by the generation of electricity for the residential sector, and more than 70% of its generation matrix is composed of fossil fuels6.

The national territory is characterized by its diverse climate, which divides the country into 6 climate zones studied and set forth in a national standard (IRAM 11603). It ranges from warm in the north to tempered in the central zone and cold with strong winds in the south (see map in Annex 1). This varied climate requires the application of different construction strategies for each climate zone. During the winter months in the central and southern zones, energy consumption peaks are detected due to the use of heating, and during the summer months these peaks are found in the central and northern zone due to the use of air conditioning, which highlights the impact of extreme temperatures on energy demand in the residential sector.

Households from low socio-economic backgrounds are more exposed to climatic adversities due to the poor quality of constructions. This means that they do not meet the minimum comfort standards inside the house (set at an indoor temperature of 20°C in winter and 26°C in summer, according to IRAM Standard 11.900) and demand high energy consumption to ensure minimum welfare conditions, causing relative high levels of GHG emissions. According to the data of the last 2010 national census, the housing deficit was 1,822,729, which represents 16.1% of the total housing stock. Such deficit is both quantitative and qualitative. The quantitative deficit is 4.1% of the total stock and is due to the existence of housings with unrecoverable poor construction quality (precarious housing). On the other hand, the qualitative deficit corresponds to 12% of the total housing stock. According to the definition of the Undersecretariat for Territorial Planning of Public Investment, the qualitative housing deficit “is a complex indicator of housing conditions, which shows a kind of insufficiency that can be mitigated by improving the existing urban housing stock and making it more dynamic. To take the qualitative housing deficit into account, contributes to the implementation of Public Policies that facilitate, among other things, the access to credit to promote interventions that improve the conditions of existing units”. 7 That is the matter that this Program addresses.

Below is the distribution of the qualitative deficit in contrast to the distribution of the population in the provinces of the national territory:

Qualitative housing deficit per construction quality per province. Year 2010. Source: Census 2010 – Argentine Construction Chamber

Part of this qualitative deficit is associated with lack of insulation and high energy demand to achieve thermal comfort in summer and winter months, which causes high GHG emissions per housing. Improving energy efficiency in walls and roofs will reduce the energy consumption of housings and consequently the associated GHG emissions. The Province of Buenos Aires is where 44% of the housings with qualitative deficit are located, and in turn, where the highest percentage of the population and the largest number of total housings in Argentina are concentrated, corresponding to climate zone 3, one of intermediate climate. In other regions of the country the problem is the same, and in some provinces it can impact more than a quarter of the housings. So, there is a great opportunity for energy savings associated with the implementation of energy efficiency actions in households across the country.

6 https://www.argentina.gob.ar/energia/hidrocarburos/balances-energeticos https://www.argentina.gob.ar/sites/default/files/inventario-nacional-gei-argentina.pdf 7 https://atlasid.planificacion.gob.ar/indicador.aspx?id=51

7%

4%6%

3%

11%

8%

11%

7%8%

9%

16%

6%

9%

3%

29%

15%

18%

26%

21%

24%

8%

31%

10%

13%

0% 1% 1%2%

1% 1% 1% 1% 1%2% 2%

4%3%

7%

1%2% 3% 2%

4%3% 3%

8%

39%

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

100.000

200.000

300.000

400.000

500.000

600.000Qualitative Deficit by Province in Argentina

Quantity of homes in qualitative deficit % Qualitative deficit % National population

https://www.argentina.gob.ar/energia/hidrocarburos/balances-energeticoshttps://www.argentina.gob.ar/sites/default/files/inventario-nacional-gei-argentina.pdfhttps://atlasid.planificacion.gob.ar/indicador.aspx?id=51


Given the qualitative deficit presented, the National Office of Access to Land and Regularization, under the Government Secretariat of Housing (SVN, in Spanish), formed an alliance with the Government Secretariat of Energy and the Government Secretariat of Environment and Sustainable Development and created the Best Sustainable Housing Program in 2018. The program seeks to implement nationwide actions to improve housing with qualitative deficit in order to reduce its energy requirement and associated emissions. The proposed interventions consist mainly of actions to improve the thermal insulation of walls and roofs, which are easy to execute and have high impact. The Trust Fund for Social Housing (FFVS, in Spanish) operates within the general operation of the SVN, using contributions from both the national treasury and external financing to fund social housing projects. Within the operation bearing external funds, the FFVS has received contributions from the “Comprehensive Habitat and Housing Program” (IBRD Loan No. 8712-AR), executed with the World Bank to fund housing projects. The FFVS has proven management capacity. During the years 2018 and 2019, the FFVS managed payments for an approximate execution amount of USD 70 million. Annex 2 presents the details of the operations carried out by the FFVS.

In 2019, two pilots began to be implemented:

The first one is in climate zone 6 (the coldest zone in Argentina, which has high energy demand for heating) in the City of San Carlos de Bariloche, Province of Río Negro. The SVN is financing the pilot and working together with the city government to execute the improvement of 1,000 housings. The objective of the pilot is to validate the improvement prototypes and their results in terms of energy savings and emissions. Based on the 140 cases executed so far, it has been possible to determine an average saving of 80% of the energy consumption of each housing by implementing improvements in energy efficiency in walls and roofs.

The second pilot is in the City of Morón, Province of Buenos Aires (climate zone 3), where training for cooperatives and members of the municipality was recently developed in order to improve 100 housings during the months of October, November, and December 2019.

Based on the experience of these pilots and smaller-scale projects implemented by the third sector (local NGO´s) in Argentina, we propose the structuring of the Program “Promoting energy efficiency improvements in low-income housing in Argentina” (hereinafter the "Program"), described in section B2 below.

B.2. Project/Programme description (max. 3 pages)

The Program consists of improving the energy efficiency of 50,000 housings located in climate zones 3, 4, 5, and 6 (the coldest ones in the country) with the purpose of reducing their current energy demand by at least 50% and mitigating the emission of more than 4MM tCO2eq. The greatest energy consumption of these housing relates to heating, due to the climate conditions and because the lack of thermal insulation in walls and roofs, which generates a thermal imbalance inside the house with greater incidence during the winter months and in housing located in areas with high thermal range.

To reduce the energy consumption of the participating housing, the Program consists of two complementary components, on the one hand, the effective execution of interventions, which will result in the reduction of energy consumption and associated emissions, and on the other, enabling and raising awareness of energy saving (to be executed at an initial stage).

The Program is planned to be executed in 5 years, and during which it will gradually expand to different areas of the country, always within climate zones 3, 4, 5, and 6. The method proposed is as follows:

This scheme will be replicated sequentially throughout the 5 years of the Program and there can be several areas in execution simultaneously with different degrees of progress.

“Execution of interventions” component

The Program contemplates the execution of improvements in the building envelope of existing housings with qualitative housing deficit through prototypes established by the SVN. As a complementary measure, lighting will be changed to incorporate LED technology, which will generate additional energy savings.

The intervention prototypes have a specific range and cost, which are detailed below. The purpose is for them to be simple to execute (between 1 and 10 days) and cost-effective.

Key players will be involved to ensure the success of the Program, working with:

Beneficiary: natural person under whose name the electric service is. They must perform the following steps throughout the Program:

Municipalities: they will promote the program being in touch with beneficiaries locally and have a closer approach to them and their needs.

Local cooperatives: they will be in charge of executing the interventions. Therefore, their workers will be trained with a unified intervention criterion to be able to carry out the surveys and diagnoses for the retrofits works. In general, the members of these

Sign in to the Program web

platform

Select cooperative and

accept terms and conditions

Welcome the cooperative for diagnosis and

training

Receive the intervention and

the User Manual of the

housing

Approve of the intervention

Pay loan installments

Municipality Selection Contact with local players (electric

utility companies and worker cooperatives)

Capacity building component

(grant) Execution of interventions

component (loan)


cooperatives are the same that inhabit vulnerable neighborhoods, which strengthens the role of cooperatives in the Program. It also reinforces the sustainability of the Program since the cooperatives will incorporate the standards of energy efficiency in the constructions made in the future outside this particular Program.

Electric utility companies: they will disseminate the Program and contents about the rational and efficient use of energy (URE, in Spanish), which will be complementary to the training given by the cooperatives at the time of diagnosis. The objective of this dissemination by distributors is to maintain the messages of URE over time, beyond the specific moment of intervention by cooperatives. On the other hand, they will act as agents that collect the loan granted and charge the due fees in the electricity bill. This last point is extremely relevant since it is important that the user relates the repayment of the intervention performed to the savings in electricity bills to serve as an incentive to pay the loan.

Trust Fund for Social Housing (FFVS): it works within the framework of the general operation of the SVN, using contributions from both the national treasury and external financing to fund social housing projects.

The different stages of the program execution are shown below, and a detailed flowchart of each step is included in Annex 3.

1. Call, housing application, acceptance criteria.

The SVN, together with the Municipality, will publish the call for the registration of housings that meet the following characteristics: the beneficiaries may be households with solid structures that were not built with public funds, formally connected to the electrical grid and having no debt related to the electric service. The beneficiary of the Program will be the one responsible for the electricity bills, who will state the household income, the range of which must be between 2 and 3 minimum wages (SMVM, in Spanish). The beneficiary must complete a brief initial online training to enroll in the Program. Depending on the fulfillment of the aforementioned conditions, a loan will be approved for each beneficiary of a maximum amount of USD 2,000 for the intervention in their housing. The beneficiary will pay the loan up to 60 months, with a fixed fee in Argentinian pesos that accounts for 5% of the household's income, with a rate similar to that granted by the National Social Security Administration (ANSES, in Spanish). The difference that arises between the amount repaid by the beneficiaries and the amount of the intervention will be covered by the national state through a subsidy. This is part of a paradigm shift since currently the target population lacks access to formal credit to carry out this type of improvement. The financing mechanism will consider the structural difficulties faced by poor women to obtain credits and to be able to pay them, taking into account the wage gaps and the lack of flexibility in credit conditions, which will result in a priority dissemination of the Program to women who are the breadwinners of their household.

2. Data validation, designation of cooperative, completion of initial survey.

- The SVN will verify and cross the data of applicants to perform the credit and ownership analysis of the service. - Applicants will choose the cooperative from the options available in their area (selecting a first and a second option). - A “Diagnostic Technician” of the selected cooperative will carry out the initial survey in the housing based on verifications and

estimates regarding the structural stability of the building system, the quality of the building envelope (insulations, thermal bridges, infiltrations, etc.), the indoor air quality, the adaptability of the architecture to the characteristics of the climate at different scales (set, building and construction scales), habits and perceptions of the users, etc. The survey methodology, determined jointly between the SVN and the Government Secretariat of Energy, specifies the criteria for selecting the intervention prototypes, defines the form to survey the conditions of the property in order to be finally able to calculate the energy requirement of the housing. For such calculation, a simplified method of the IRAM 11.900 v2018 Standard will be adopted, which has a virtual charging platform that will be able to assess the energy requirement of the housings according to the conditions of use established in the Standard for the initial situation and for the situation after improvement.

- During the initial survey, the Diagnostic Technician will work with the beneficiaries by carrying out a survey about energy use, and will give them a training of best practices of energy saving and use that involve the interventions that are being executed, as well as other uses of energy and water in the house. This is essential to strengthen the message of energy efficiency and responsible use of energy and water, which in many cases is the first contact that the beneficiaries have with these issues, but they will continue to receive them through the electric utility companies.

- The diagnosis will determine the type of intervention based on the initial state of the housing and a project will be developed considering estimated results, budget, and work plan for the execution of the improvement, which will be reported by the cooperative to the SVN.

3. Approval of initial survey, grant of credit

The proposal of the cooperative is reviewed by the SVN and if it meets the established criteria, the credit to the beneficiary is approved. Through the granting of credit, the beneficiaries will be incorporated into the financial system.

4. Execution of interventions, final diagnosis

The interventions are intended to be carried out in a period of 1 to 10 days and will be executed by trained “Weatherizers”. Different pre-established intervention prototypes are proposed, which will be selected according to the climate zone and the state of the housing at the time of the initial diagnosis, namely: 1) thermal and hydrophobic roof insulation; 2) thermal and hydrophobic roof plate insulation; 3) inner thermal insulation of walls; 4) sealing leaks; 5) replacement of lamps with LED. These prototypes will be used in two types of predefined interventions with a maximum cost per intervention of USD 2,000. Each intervention will be selected according to the initial state of each housing, the decisive factor being the structural state of the roof:

- Call

- Housing application - Acceptance criteria

- Data validation

- Designation of cooperative - Initial survey

- Survey approval

- Granting of credit

- Execution of interventions - Final diagnosis

- Payment of loan

- Results follow-up

2 1 3 4


Intervention 1 Intervention 2

2. Thermal and hydrophobic insulation and change of roof plate

4. Sealing leaks

5. Replacement of lamps with LED

1. Thermal and hydrophobic roof insulation

3. Inner thermal insulation of walls

4. Sealing leaks

5. Replacement of lamps with LED

- The Cooperative will buy the necessary materials for the development of the intervention. - The Weatherizer will develop the execution of the improvement, under the supervision of the Diagnostic Technician. - The Diagnostic Technician will make the final diagnosis once the housing intervention is finished. - The Diagnostic Technician and the Weatherizer will transmit the results of the intervention and concepts about the use of sustainable

housing to the beneficiaries, reinforcing the messages of responsible use of energy and water in the house. They will also deliver a “Housing User Manual” that will include all such content.

- The FFVS will reserve the right to carry out an on-site audit of the improved housings to verify the veracity and compliance of the Program.

- The FFVS will issue the payment to the cooperative at the end of the intervention once the beneficiary has issued the compliance document.

- To verify the effectiveness of the intervention, the Program will be monitored according to the compliance indicators found in Annex 4. Part of the follow-up consists in comparing and contrasting the electricity and gas bills of the previous 12 months and the 12 months after the intervention to calculate in each case the actual energy savings and evaluate the reduction of emissions obtained.

- The beneficiary of the loan, who is also the person responsible for the electric service, will receive the fee corresponding to the loan granted for the intervention in the billing of services.

- As part of the Program's sustainability scheme and with the purpose to maintain energy saving over time, a “public recognition” mechanism will be generated for those beneficiaries who achieve the best savings throughout the Program. Although this recognition will be symbolic at first, a type of bonus in the loan fee for those who achieve the greatest savings in each area will discussed.

Expected results of the interventions: Calculations have been made to estimate the savings for both interventions, taking as reference a housing located in the climate zone 3 belonging to the Province of Buenos Aires, where the potential savings are the most conservative (minimum savings) and there are areas with much more savings potential (zones 4, 5 & 6). To carry out the simulation and obtain the following results, we worked in a 58 m2 covered house with the characteristics shown in Annex 5.

Total energy requirement of each housing after implementation of each prototype. Source: software simulation IRAM 11.900 rule.

The results show an energy savings of 49% for Intervention 1 and an energy savings of 56% for Intervention 2.

“Capacity building" component

A fundamental point to guarantee the success of the Program is capacity building, which must be developed for all the intervening profiles. Training will be carried out for four groups of people: "Trainers", "Diagnostic Technicians", "Weatherizers" and "Beneficiaries" in order to:

- Unify the intervention and survey criteria of the beneficiary households of the Program. - Generate local capacities for the professionals involved in the construction so that they can continue replicating energy efficiency

interventions in their particular works.

- Promote a paradigm shift in traditional construction in low-income sectors, encouraging low-emission construction through the use of insulating materials more efficient than traditional materials.

- Train the beneficiary to use energy responsibly in order to guarantee compliance with the Program's savings and avoid a rebound effect on energy consumption.

0

5.000

10.000

15.000

20.000

25.000

Base Case Intervention 1 Intervention 2

kW

h/y

ear

Annual Energy Requirement per Housing

Lighting

Hot water

Refrigeration

Heating

49% 56%


To execute this capacity building component, the SVN, together with the Municipality, will publish a call for the registration of local cooperatives to the Program. In order to participate in the Program, these cooperatives must ensure the participation of their staff in the training for “Diagnostic Technicians” and “Weatherizers” and they must pass an exam, after which they will become part of the “National Registry of Diagnostic Technicians and Weatherizers”. Cooperatives that want to apply to carry out the interventions in households enrolled in the Program must have personnel registered in the aforementioned categories.

At the beginning of the Program there will be a specialist in energy efficiency and construction-related issues, who will begin to train the Trainers, Diagnostic Technicians and Weatherizers to build multiplier networks and train a significant number of participants to begin to run the program. Then it will be the responsibility of the “Trainers” to continue with the task.

The “Trainer” will be a construction technician with teaching experience. Their task will be to transmit to the "Diagnostic Technicians" and "Weatherizers" theoretical and practical knowledge about the household survey, the energy use survey, the interventions to be carried out, and the training of the "Beneficiaries”.

The “Diagnostic Technician” will be a technician in the construction area (for example, a foreman), and the “Weatherizer” will be a worker in the construction area. Both will be within a local labor cooperative attached to the Program, and will receive specific training for each profile respectively (make the initial diagnosis and execute the interventions in the households) and provide the beneficiary with information on the responsible use of energy and water in the household.

The “Beneficiary” will be the owner of the electric service of the participating housing and will receive training from the Diagnostic Technician during the intervention.

Finally, the electric utility companies participating in the Program will replicate the same message to all the beneficiaries in order to reinforce the advice on the responsible use of energy over time and guarantee its implementation. It should be noted that all social education and training programs will be guided by pro-equality measures that take into account gender inequalities; therefore, these considerations will be included in the calls, contents, and instructional methods.

B.3. Expected project results aligned with the GCF investment criteria (max. 3 pages)

1. Impact potential

The impact on mitigation of GHG emissions presented by this Program will be at least 4.6 MMtCO2eq. The following table shows the expected results based on interventions 1 and 2 in terms of energy saved, annual avoided emissions and cost; both for individual housing and for the 50,000 housings to be improved in the 5 years of the Program.

Individual calculation per housing

Calculation of the entire project (50,000 housings)

Unity Intervention 1 Intervention 2 Intervention 1 Intervention 2

Intervention cost USD $ 2,000 $ 2,000 $ 100,000.000 $ 100,000,000

Electricity saved MWh 51.18 50.22 2,559,060 2,511,060

Natural gas saved dam3 24.62 28.48 1,231,150 1,423,971

Emissions saved tCO2eq 92.06 101.96 4,615,303 5,110,145

The numbers presented are conservative since they were calculated for the climate zone of the Province of Buenos Aires and the potential for savings is greater in the colder areas of the country.

A minimum energy saving per intervention per household of 49% (estimate based on housing prototypes planned by the SVN and the simplified survey method conducted by the Government Secretariat of Energy) would result in a minimum annual emission reduction of 4,615,303 tCO2eq among the 50,000 housings involved.

0

2.000.000

4.000.000

6.000.000

8.000.000

10.000.000

12.000.000

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

tCO

2e

q

year

Emissions for 50,000 households

Baseline Emissions Emissions Intervention 1 Emissions Intervention 2

Intervention 1:4,615,303 tCO2eq

Reduction

Intervention 2: 5,110,145 tCO2eq

Reduction


2. Paradigm shift potential

This Program generates a paradigm shift in terms of how the qualitative housing deficit is addressed, which generally does not include the concept of energy efficiency of the envelope in the improvement proposals, nor does it take into account the bioclimatic zone to determine a better intervention. The Program would also be leveraging the reduction in the fossil fuel subsidy. Due to their income range, the beneficiaries of the Program have access to what is called "Social Rate" in Argentina. This rate is subsidized and involves the electricity, water, and gas services. As the primary energy matrix is composed of 87% fossil fuels, and the energy matrix is composed of 70%, it is understood that a large part of this subsidy will directly subsidize the consumption of fossil fuels. The interventions are expected to reduce the energy requirement of these housings and therefore reduce the budget allocated to the fossil fuel subsidy. That is to say, with this Program, a subsidy to fossil fuels would be redirected towards a subsidy for energy efficiency actions, a fact that is transformational for Argentina. Potential for expansion and replication: Argentina has about 1,359,078 housings with qualitative deficit with the opportunity to increase their energy efficiency and generate a direct impact on the reduction of the country's emissions. Although the Program starts by reaching 50,000 housings, there is potential to expand it throughout the country. The expansion can be done through public policy, expanding the scheme proposed in this Program, but it is also expected that in higher income housings energy efficiency actions can be replicated in a particular manner, even more when technical capabilities have been developed. Potential for knowledge and learning: the Program will contribute to capacity building and exchange among all market players at the different stages of this program: at the beginning, the SVN will provide training courses for the construction sector (Local Cooperatives) in order to disseminate the intervention methodology, the procedure to perform the diagnosis, and the tools to train residents during the intervention. This will result in the dissemination of content nationwide. Then, during the intervention, the team will train the beneficiaries in good practices of efficient energy use and gather information from an initial diagnosis and a survey about energy uses in the households. After the intervention, a final diagnosis will be made to evaluate the energy impact obtained by the improvements, and energy bills will be monitored for more than one year to measure the effectiveness of the Program. The information obtained will be disseminated, helping to establish a reference business case for housing modifications and generate information for better formulation of future public policies. The capacity building of Local Cooperatives will have a positive social and economic impact because they will have new skills to apply not only during the Program but also in their work elsewhere, either in other future stages or in the private sector. Contribution to the creation of an enabling environment: the project will systematically focus on resolving barriers and investment risks that currently limit the modifications of housing by users. Current barriers are of financial, commercial, and technical/capacity nature. These barriers are:

• Lack of funding for the construction sector and especially for the low income class.

• Lack of local knowledge in the public and private sector capable of identifying and carrying out energy efficiency projects;

• Local cooperatives interested and capable of undertaking housing modifications based on an Engineering, Procurement, and Construction (EPC) model;

The project is designed to ensure that each of these barriers is removed or reduced as much as possible in activities specifically designed for that purpose, resulting in the creation of a favorable market environment for investment and in housing upgrades that will continue beyond the scope of the project.

3. Sustainable development potential

Economic co-benefits: the Program will create new jobs, not only in construction, but also through upward and downward connections (suppliers of local building materials, repair and service sectors) and also through jobs created by the construction cooperatives. Households will feel an improvement in their family economy. Due to the savings in energy consumption, beneficiaries will pay less on monthly bills and that money can be used to cover other family needs, which will positively impact the local market. Social co-benefits: a total of 50,000 beneficiaries and their families living in the same home will have their energy-efficient housing with an adequate thermal balance and good air quality inside the house, since with the intervention the air and water leaks that produce moisture in walls and roofs that cause asthma and allergies to its inhabitants will be eliminated. This will improve the quality of life and health of the inhabitants, reducing the rate of disease and respiratory problems resulting from low temperatures and ambient humidity. According to the Pan American Health Organization8 “The risks and effects on health are not distributed equally among the population. People with low income and those living in vulnerable situations, as well as women and their children are at greater risk.” By reducing disease rates, absences from school and work will be reduced, which will also have a positive economic impact since many times the beneficiaries are paid by the day at work and if they are absent, they do not get paid.

Environmental co-benefits: the Program will contribute to the reduction of energy consumption, which will have an impact not only due to the reduction of GHG emissions but also due to the reduction of local emissions (CO, NOx, SOx, particulates) resulting from the burning of fossil fuels (natural gas, LPG, and electricity with a strong fossil component). As a co-benefit, it will also work on the environmental awareness of the inhabitants reached by the Program, who will be trained in responsible use of energy and water resources.

Impact of gender-sensitive development: Employment in the Program area will also benefit women in the workforce. There are three important aspects to be highlighted: a) the improvement in the physical and material conditions of the housing contributes to the quality of life of its inhabitants. Household chores, mostly performed by women, take place at home. If the housing is

8 https://www.paho.org/hq/index.php?option=com_content&view=article&id=12918:ambient-air-pollution&Itemid=72243&lang=es

https://www.paho.org/hq/index.php?option=com_content&view=article&id=12918:ambient-air-pollution&Itemid=72243&lang=es


deficient, that affects especially the health of women, children, and the elderly who stay longer at home. If living conditions are improved, women, children, and the elderly, who stay longer at home, will be particularly benefited; b) The gender wage gap (income difference between men and women for equal work) is close to 25%9; in practice this means that women will have greater difficulties in having an income that will allow them to improve housing, a fact that would be modified with this Program, especially in the cases of female breadwinners; c) the qualitative housing deficit is related to precarious housing conditions that directly affect the health of its inhabitants and, by extension, the unpaid work of women in charge of their homes. Therefore, the reduction in the qualitative housing deficit would tend to reduce the need for medical care due to climate discomfort.

4. Needs of the Recipient

In Argentina, more than 35% of the population live in extreme poverty. High energy expenditures that do not match income result in energy poverty 10 and households cannot pay the initial costs of the modifications to be able to afford them all on their own. In addition, this Program is aimed at a sector of the population that normally does not have access to formal credit that would allow them to make improvements in their housings. The project addresses these groups directly through targeted subsidies to help address the affordability gap and stimulate the demand for housing upgrades in terms of energy efficiency.

5. Country ownership

The Best Sustainable Housing Program is aligned with the National Action Plan for Energy and Climate Change, in the mitigation actions “Residential Lighting” and “Building Envelope Improvement; and the National Plan of Action for Infrastructure and Territory and Climate Change that is about to be published, in particular with the mitigation action called “Reconditioning housings in qualitative deficit – Best Sustainable Home”. Both Plans are in line with the Nationally Determined Contribution (NDC). The action "Building Envelope Improvement" contains the National Housing Labeling Program that proposes the quantification of the current construction quality throughout Argentina for existing and regularized housings, resulting in the suggestion of measures to improve their energy rating. This Program is based on the application of the IRAM 11.900 v2018 rule, which is analogous to the European Energy Performance of Buildings Directive (EPBD) and is not mandatory.

6. Efficiency and effectiveness

The objective of the project is to implement a set of interventions to promote the reduction of greenhouse gas (GHG) emissions in low-

income housing, as well as to promote other benefits of sustainable development. Barriers that must be overcome to achieve that include those of political, financial, commercial, and technical/capacity nature. The estimated cost per ton of CO2eq (total investment cost / reduction of direct emissions for the term of the project) is:

Intervention 1 Intervention 2

US$ / tCO2eq GCF financing 7.69 6.95

US$ / tCO2eq Total Project Financing 21.99 19.86

Application of best practices: The best available technologies have been considered and will be applied. The energy efficiency

parameters of materials and measures will be higher than local standards and will reflect the best practices of the European Union.

B.4. Engagement among the NDA, AE, and/or other relevant stakeholders in the country (max ½ page)

The executing unit of the Program is the National Office of Access to Land and Regularization, under the Government Secretariat of Housing of the Ministry of Interior and Public Works. This Office is already running Innovation and energy efficiency Programs throughout the country, improving construction standards, requiring mandatory labeling and a minimum “B” standard according to the IRAM 11.605 rule in housings built with funds from the national government. The National Cabinet of Climate Change (GNCC, in Spanish) groups national ministries involved in climate policies and coordinates. through extended bureaus, with civil society, academics, the private sector, and workers. The GNCC articulates the policies related to climate change and processes between the different areas of government and between the national government and the provinces. In 2016, the GNCC adopted a participatory process to review the NDC and in 2017 it began to develop sectoral roadmaps for its implementation. Sectoral Action Plans for Climate Change regarding energy, forests, transport, industry, agriculture, and livestock, and infrastructure and territory were elaborated and validated, which will lay the foundations for the development of the National Mitigation Plan and the National Adaptation Plan, and these will be inputs for the development of the National Climate Change Response Plan.

Within the framework of GNCC's works, the NDA, together with the Government Secretariat of Environment and Sustainable Development of the Nation, established a national participatory process to develop a portfolio of prioritized projects to comply with the NDC of the country. Through the Readiness Project “Strengthening climate finance and the implementation of the NDC through mitigation proposals developed in participatory federal processes”, workshops were held in the different regions of the Federal Environment Council (COFEMA, in Spanish), as well as meetings with different national Ministries and Secretariats. More than 30 project ideas were discussed and 6 were selected to be converted into Concept Notes. This Project was prioritized as one of those 6 Concept Notes due to its high impact and alignment with national climate change strategies.

9 Source: International Labour Organization “Gender gaps in the labour market in Argentina 10 According to the methodology used by Eurostat (official EU statistics) using the European Survey of Income and Living Conditions (EU SILC) and validated in Argentina by the Argentine Political Economy Center with the Household Expenditure Survey, households in a situation of energy poverty are considered to be those that must spend more than 10% of their income on the energy supplies associated with their housing (air conditioning, domestic hot water, lighting, cooking, and other significant consumption).

https://www.argentina.gob.ar/ambiente/sustentabilidad/planes-sectorialeshttps://www.argentina.gob.ar/ambiente/sustentabilidad/planes-sectoriales/energiahttps://www.argentina.gob.ar/ambiente/sustentabilidad/planes-sectoriales/bosqueshttps://www.argentina.gob.ar/ambiente/sustentabilidad/planes-sectoriales/transportehttps://www.argentina.gob.ar/que-es-el-cambio-climatico/plan-nacional-de-mitigacionhttps://www.argentina.gob.ar/que-es-el-cambio-climatico/plan-nacional-de-mitigacionhttps://www.argentina.gob.ar/que-es-el-cambio-climatico/plan-nacional-de-adaptacion


C. Indicative Financing/Cost Information (max. 3 pages)

C.1. Financing by components (max ½ page)

Component/Output Indicative cost

(USD)

GCF financing Co-financing

Amount

(USD)

Financial Instrument

Amount

(USD)

Financial Instrument

Name of Institutions

Intervention in housings 100,000,000 34,000,000 Subordinated

loan 66,00,000

Contribution budget or soft

credit of multilateral

agency (to be defined)

Government Secretariat of

Housing

Capacity building 1,500,000 1,500,000 Grant - - -

Indicative total cost (USD)

101,500,000 35,500,000 66,000,000

C.2. Justification of GCF funding request (max. 1 page)

GCF financing is being requested to implement a policy aligned with the NDC that has ample potential to reduce greenhouse gas emissions in a cost-effective way as a result of energy consumption in housings. Although two pilots are currently running in two climate zones of the country with a range of 1,100 housings, in order to execute the Program nationwide and reach 50,000 housings in 5 years, as proposed by this Program, an initial outlay of significant public funds would be necessary, and without GCF financing the estimate would be much longer than the 5 years planned.

In the case of beneficiaries, they have difficulties in accessing traditional financing, as mentioned in section B3.2 “Lack of financing for the construction sector and especially for the low-income class”.

In addition, the GCF funds would enable the creation of a Program with its own funds and a feedback fund with the payment of loan installments, which transcends any annual budget planning, change of government, or political decision; that would transform the Program into a state policy.

C.3. Sustainability and replicability of the project (exit strategy) (max. 1 page)

To guarantee the sustainability and replicability of the Program, a trust fund will be used to collect the payments of the installments of the loans granted, which in this first stage of 50,000 housings will be used to repay the GCF loan. At a future stage, one could continue with an initial injection of public funds and then with repayment, feed the trust fund, thereby granting more credits and improve more housings. Based on what is expressed in the description of the context, the Program is considered to be scalable to the entire universe of low-income housing with qualitative housing deficit, including those with medium resources that currently do not perceive the improvement of the building envelope as a value that would also generate an improvement in housing comfort, significant energy savings, and consequently a reduction in greenhouse gas emissions. At the same time, the execution of this Program is of interest to the national, provincial, and municipal spheres as it is directly focused on a policy of reducing emissions, increasing the welfare of vulnerable households, and improving the quality of life of users and their communities together with the local economy. On the other hand, the Program will be monitored and adjusted according to the indicators found in Annex 4 in order to guarantee compliance and long-term sustainability. The channels and management networks formed for the execution of the Program will be in progress and the main players involved will already be able to continue developing the Program. The capacity building component will reinforce the continuity of the Program beyond the initial scope proposed, since specialized labor will be available to provide services beyond the limits of this Program. In addition, to guarantee the sustainability of the Program, work will be carried out with the electric utility companies to reinforce the message of rational and efficient use of energy, to monitor the energy consumption of the beneficiaries already improved for follow-up, and to detect the savings and to reward those who save the most in each electric utility company.

D. Supporting documents submitted (OPTIONAL)

☒ Map indicating the location of the project/programme

☐ Diagram of the theory of change

☐ Economic and financial model with key assumptions and potential stressed scenarios

☐ Pre-feasibility study

☐ Evaluation report of previous project

☐ Results of environmental and social risk screening


Self-awareness check boxes

Are you aware that the full Funding Proposal and Annexes will require these documents? Yes ☒ No ☐ • Feasibility Study

• Environmental and social impact assessment or environmental and social management framework

• Stakeholder consultations at national and project level implementation including with indigenous people if

relevant

• Gender assessment and action plan

• Operations and maintenance plan if relevant

• Loan or grant operation manual as appropriate

• Co-financing commitment letters

Are you aware that a funding proposal from an accredited entity without a signed AMA will be reviewed but not sent to

the Board for consideration? Yes ☒ No ☐


Annex 1 – Map of climate zones IRAM 11.603 rule

Zone I: Very warm

Zone II: Warm

Zone III: Warm tempered

Zone IV: Cold tempered

Zone V: Cold

Zone VI: Very cold


Annex 2 – FFVS

The Trust Fund for Social Housing (FFVS) was created by Act 2734, which approves the General Budget of the National Administration for the Year 2017 under the then Government Secretariat of Housing and Habitat of the Ministry of Interior, Public Works and Housing in order to finance the current social housing and basic infrastructure Programs with funds from public, private, international, multilateral, or trilateral organizations. The trustee is BICE Fideicomisos S.A., which manages the fund according to the instructions of a Board of Directors, whose conformation and functions were established by Resolution 1027-E/2017 of the Ministry of Interior, Public Works and Housing. Part of the fund's income is composed of investments to protect capital and meet future execution needs. Also, 35 agreements have been executed in 2018, through which the construction of 2,645 housings has been financed. In turn, in 2019 the FFVS has entered into 109 housing agreements, which represents 7,895 housings under execution.

Budget allocated per year

Budget year AR$

Budget 2017 $ 1,613,406.97

Budget 2018 $ 54,901,144.64

Budget 2019 $ 146,042,235.90

Total Treasury and World Bank Contribution $ 202,556,787.51

Number of agreements and housings

Total Agreements 2018 35

Number of Housings 2018 2,645

Total Agreements 2019 109

Number of Housings 2019 7,895

Note: the agreements signed in 2018 are included in 2019.


Annex 3 - Program Flowchart. Source: Government Secretariat of Housing

SVN SVN COMMUNICATION

SVN IMPROVEMENTS

COOPERATIVE FFVS DISTRIBUTION COMPANY

Training for diagnosis and carrying out sustainable improvements RECTIFICATION Project approved? YES Request for credit with calculation of grant % and credit % Approved backend

NO Email notification Email notification to beneficiary

Receipt of submission and validation with SINTYS11 Are requirements met? YES Notification to cooperative Notification to FFVS for payment to the cooperative and credit registration

Certification Improvement accepted? Visit home for (technical and social) survey and diagnosis + delivery of most recent bill and DNI copy Is the home suitable for intervention? Present project via TAD12 including: - computation and budget - construction works deadline Visit beneficiary to sign acceptance of credit request + agreement on start date Purchase of materials Carry out improvement + delivery of use manual Home visit for post-intervention diagnosis + Beneficiary compliance Presentation via TAD invoice intervention Improvement is paid END

Receipt of grant and credit amount Project registration + Payment to the cooperative + Notification to the distributor of the credit collection to the beneficiary Receive payment of fees

Stage updating No. of clients and delay status Registered parties data, reduced rates, consumption history for 12 months Incorporation of credit into the invoice Raising money and transfer to the FFSV 12 month consumption record

11 SINTYS - National Tax and Social Identification System 12 TAD – Remote Process


Annex 4 – Project Indicators

Performance indicators

Perspective Objective Indicator Unit

Training Train Diagnostic Technicians Amount Approved per Course Quantity

Training Train Weatherizers Amount Approved per Course Quantity

Training Train Program Beneficiaries Amount of train beneficiaries Quantity

Execution Measure the credibility and scope of the program

A - Amount of Postulated Housing

Quantity

Execution Improvement of existing housings B - Amount Intervened Housing Quantity

Execution Respond to housing stock demand B/A Percentage

Energy Complete surveys when the intervention is completed and quantify the savings obtained

Electricity Generated Savings kWh

Energy Complete surveys when the intervention is completed and quantify the savings obtained

Natural Gas Generated Savings m3

Finance Fund Optimization Budget Executed $$$

Finance Avoid late payment and non-payment Slow payer / uncollectible Percentage

Annex 5 – Type of housing used as Base Case

BASE CASE | HOUSING 58m2

Roof C (1,9 cm) | M Pine 1,8 | CHG 0,1

Walls M (23,0 cm) | Ri 2 | LCH 18x18x25/33 | Re 3

Aluminum frame openings with simple glass, sliding,

no protection, general condition: bad

Infiltrations area equivalent to 600 cm2

Base Case 58m2 Housing – Best Sustainable Housing Program. Source: Government Secretariat of Energy ‘

CN cover pageCover template_doc_cover-projects_CN

23190

Promoting energy efficient retrofits in Argentinian low-income ......national standard (IRAM 11603). It ranges from warm in the north to tempered in the central zone and cold with

Documents