By 2050, two-thirds of all humanity will be urban. Growing interconnectivity, ballooning populations and climate change all add up to the pressing need for smart infrastructure. Technology such as smart grid control, storage solutions and building automation can improve the energy efficiency and reliability of our environments - a crucial part of implementing multiple United Nations Sustainable Development Goals.
Financing plays a vital role in enabling such technological transition. However, in times of limited public funding or commercial budget constraints, many policymakers and business owners are not fully aware of the financing possibilities that can help manage risks, reduce initial costs, or make complicated projects bankable.
At Siemens Financial Services, we understand the complex investment decisions behind the digital technologies that matter – by combining our deep technological knowledge and financing expertise.
Insight Series: Financing smart buildings - driving value in the "new normal"
The pandemic and its resulting economic pressures are driving the need to make buildings smart and more energy efficient. Our latest insight series examines the importance of smart finance in facilitating this conversion in a financially sustainable way, and takes a closer look at how five sectors across the globe (offices, hospitals, manufacturing, public buildings and education are coping with the "new normal".
Transforming smart building data into economic benefits
From intelligent building systems to energy efficiency technology, financing plays a key role in helping buildings – from hospitals, schools, to commercial and government buildings – harness sustainable capital for growth and innovation while acquiring future-proof technological benefits.
When engineering and financing solutions come together, buildings can unlock huge energy saving potential – in energy consumption and in cost. A good example of this is Siemens’ energy performance contracting for building technology in more than 10 countries – a combination of consulting, modernization services and customized financing. With this approach, customers do not need to make any initial investment – they simple use the energy cost savings to pay for the installments.
Worldwide, Siemens has modernized more than 5,200 buildings with Siemens' building technologies, with more than €1 billion in savings and more than 10 million tons of CO2 reductions.
Tailored financing for smart buildings
The future of building technology will encompass the holistic building performance through digitalization, from operations, security to comfort. Instead of being deterred by the initial cost, smart financing can help buildings acquire the technological benefits through a wide range of financing solutions. One example is public-private partnership.
In Vienna, the new Bildungscampus Nordbahnhof will be the city’s largest campus, cross-linking kindergarten, schools and leisure space. Combined with smart building technology such as energy forecasting and building lifecycle competence, Siemens Financial Services is also financing 50% of the construction and operation cost in this public-private-partnership, making real matters for United Nations Sustainable Development Goal of Quality Education.
Financing our future energy ecosystem
Our energy system topology is transforming from centralized models into a more distributed, decarbonized, digital ecosystem, one with increasing sector coupling and bidirectional power flow.
Energy data across these dynamic value chains can unlock economic benefits. From smart grids, low- and medium- power distribution to automation technology, intelligent energy solutions can be scaled by innovative financing models through understanding the data across operation interfaces.
By combining digitalization and flexible financing options, businesses can master energy like never before, unlocking savings and extra revenue for their next innovation lever, while ensuring power reliability, efficiency and security.
Shaping urban life with mobility finance
By 2050, 66% of the global population will live in cities. In some key commercial hubs, the commuting population is estimated to increase by over 40% by 2030.
Upgrading transportation systems in developed regions also require sizable investment. Megaprojects such as London’s Thameslink rail network upgrade face huge investment and financial structuring complexities, including operational, technological and counterparty risks. By financing €1.8 billion in equity and debt while structuring risks in an advisory capacity, Siemens provides the Thameslink network with 1,140 new carriages, with over 15,000 extra seats and energy reduction of 50%.
The future of rail transport will need to connect people and resources on an unprecedented scale. Private financing that is designed to manage megaproject risks and technological life cycles, especially for digitalized solutions, will be key when it comes to driving rail development and helping cities reach their economic and social goals.
Mass transportation must be developed further to increase capacity while improving energy efficiency. However, transportation projects require significant financing, which public resources cannot manage alone. This is where specialized mobility financing can make a difference.
In the city of Pune, one of India’s designated smart cities, Siemens Financial Services teamed up with Tata Group to invest in and develop an elevated metro line that will connect Hinjewadi and Shivajinagar, easing congestion for 400,000 people working in Hinjewadi, Pune’s fastest growing IT and education hub.