What is innovative about this project?

  • Project planning and management: Attracting and including private capital.
  • Social: Financial model and financial feasibility.
  • Social: Exploration of projects’ aggregation.

The ‘OPENGELA’ project set-up two neighbourhood offices in the Basque Country as One-Stop-Shops (OSS) to give advice and support to the residents of the Otxarkoaga (Bilbao) and the Txonta (Eibar) districts about green energy renovation. ‘OPENGELA’ provided an interesting financing model for the region. Born out of the premise that the income and repayment capacity levels of a great share of the population was too low to access ordinary bank loans and could only access subsidies or high-interest rate credits, the ‘MAS OPENGELA’ mechanism (a mix of public and private funds) offers loans refundable in 15 years to help those low-income households cover the full investment needed for the renovation of their homes. Housing and Debegesa developed two pilot One-Stop-Shops and their associated intervention areas. As private entities, GNE Finance and Zabala provided the consortium with expertise in new financial instruments, as well as technical, social and legal expertise.

Local Partnership

  • Company: GNE Finance; Zabala innovation
  • Municipality: Basque Government; Basque Energy Agency (EVE)
  • Housing provider: Bilbao Municipal Housing
  • Other: Debegesa; FEDARENE; Housing Europe; Gabineteseis

Opengela is an example of public-private collaboration. The partnership is constituted by different public entities, in addition to the Basque Government there is Basque Energy Agency (EVE), Bilbao Municipal Housing, Debegesa, as well as two European-level bodies (FEDARENE and Housing Europe) and the private sectors represented by three firms specialising in financing (GNE Finance), communication (Gabineteseis) and European affairs (Zabala). Bilbao Municipal Housing and Debegesa developed two pilot One-Stop-Shops and their associated intervention areas. As private entities, GNE Finance and Zabala provided the consortium with expertise in new financial instruments, as well as technical, social and legal expertise.

Key Facts

  • Year of construction: 1950-60s
  • Renovation period: 2019-2023
  • Area of intervention (m²): Otxarkoaga: 550,00 m² Txonta: 300,000 m²
  • Number of dwellings (before/after):488 (Otxarkoaga: 248 Txonta: 240)
  • Housing typology: multi-apartment buildings
  • Housing tenure: Otxarkoaga: Multi-ownership – 60% public rental housing 40% Owner-occupancy
    Txonta: Multi-ownership – Owner-occupancy
  • Number of residents: Otxarkoaga: 396
    Txonta: 486
  • Shared facilities: –

Financial information

  • Funding sources: European Commission (Horizon 2020)
  • Total cost of renovation (€): Otxarkoaga: 6,607,728€
    Txonta: 5,448,080 €
  • Subsidies received (€):Otxarkoaga: 3,065,000€
    Txonta: 3,261,000€
  • Rent before and after renovation (€/month): Otxarkoaga: 196.03 €/month after renovations
  • Energy bill (€/month): N/A

Context

Opengela was piloted in two districts categorized as “very vulnerable” by the Basque Government: the Otxarkoaga and the Txonta district.
The first pilot project took place in the Otxarkoaga district located on a hillside in the northeast of Bilbao. Initially built as a small town during the industrial expansion of the 1960’s in Biscay, the district has seen several rehabilitation initiatives being carried out since the 1990s to tackle multiple social and economic issues. Most multi-family properties are owned by the municipality and are allocated for social housing. The accessibility of the area was poor due to the topography and the distance to downtown Bilbao, which was a challenge for Otxarkoaga’s ageing population. The district also accommodates a high percentage of Romani people and others in social exclusion (characterised by low income, high unemployment levels). Building construction was of poor quality and ill-maintained.
The second pilot project was carried out in the Txonta district, located in Eibar (province of Gipuzkoa, Basque Country). This district is located in a valley, removed from the city centre. A typical housing block in Txonta is 4-storey high. 79% of the Txonta residents are homeowners and 18% are tenants. Its urban development was a consequence of the heavy industrial expansion during the 1950’s and 1960’s, where housing and industry were mixed together. Since the 1970s, due to economic crisis and industrial decline, population chose other places to live, and the population decreased. There are multiple insufficiencies in this district: lack of elevators; inadequate thermal insulation; need of extensive retrofitting, etc. The ground floor normally dedicated to hosting commercial activities, is mostly unused.

Goals

  • Improve the quality of life in neighbourhood communities through urban and district-level renovations targeting social housing and vulnerable households.
  • Minimize logistical, financial, administrative and legal burdens caused by a complex and multi-stakeholder home renovation process.
  • Ensure that building retrofits consider the social dimension by incorporating security, comfort, and improved accessibility for Basque citizens to further improve the quality of life of vulnerable population.
  • Design a scalable operating model of the one-stop-shop model and ensure the replicability at both the Basque Country and the EU-level.
  • Create strong and reliable public-private partnerships for the provision of the service.
  • Identify and overcome regional-local collaboration barriers inherent to home renovation services.
  • Increase homeowner and regional partner awareness of the multiple benefits of energy efficiency, including health, wellbeing, comfort, job creation and energy poverty alleviation.

Interventions

  • Set-up of a One-Stop-Shop (OSS) office in each neighbourhood, targeted at individuals and communities of homeowners who wish to renovate their apartment buildings. The OSS offers support to residents through the renovation process and centralises administrative procedures: from paperwork to dealing with energy services contractors or the provision of financial aid.
  • Financing for homeowner communities, serving vulnerable environments and through MAS OPENGELA (Social Support System Fund) – a blend of public and private funds – which offers refundable loans in 15 years to help low-income households cover the investment needed to renovate their homes. This system helps residents cover 100% of the investment. The application process is streamlined: it not linked to life insurance, there is no cancellation fee, the payment deadline is up to 15 years and the nominal interest rate is 5.95% or 6.45% depending on the energy efficiency ambition. In the current economic environment, a fixed rate loan at 6.50% is used.
  • Creation of a line of credit to finance public aid, eliminating potential liquidity traps generated by the aid. The instalments for this loan include only the interests and not amortisation of the capital. The credits last 2 years and are settled at the time of payment of the public aid.
  • Extension of the age limit for accessing the loan, allowing access to financing up to 70 years.
  • Offer of ‘Anti-crisis Contracts’ for rental housing to deal with financing.

Impact

  • In three and a half years, the OPENGELA project concluded successfully and has set up neighbourhood offices in 10 cities of the Basque Country: Otxarkoaga (Bilbao) and Txonta (Eibar) and in Durango, Lasarte, Pasaia, Abanto-Zierbena, Santurtzi, Valle de Trápaga, Orduña and Amurrio. Furthermore, other 14 neighbourhoods are in the early stages of roll out.
  • Nearly 800 people were supported in the refurbishment of their buildings which led to the refurbishment of 469 buildings. The average energy saving per dwelling exceeds 60%.
  • The financial solution has facilitated the uptake of building renovation in vulnerable areas without compromising the debt level of neighbours. On average, applicants allocate 26.20% of their income to cover debts with banks, which allows a low margin of debt to deal with financing. OPENGELA managed to mobilise private investment of 3.2 million €.

Advice to future “Lighthouse Districts”

  • Give value to a skilled workforce, as in any energy renovation project a low skilled workforce can have unintended multi-faceted negative consequences.
  • Partner with local authorities and other public authorities, especially regarding the funding and the business model.