Financing Obstacles of the Taiwan Energy Service Company (ESCO) Industry

Since 2005, the Taiwan government has been promoting the energy service company (ESCO) as an industry to improve energy efficiency and reduce carbon dioxide emissions. The so-called ESCO is an industry that adopts energy-saving performance contract (ESPC) as its business model. Financing means financial circulation. In Taiwan, most of the ESCOs are small and medium-sized enterprises (SMEs), which are unable to obtain sufficient loans due to a lack of collateral. Although Taiwan has the Firefly Project provided by the SME credit guarantee fund (SMECGF) as a financing guarantee mechanism, few ESCOs have used this guarantee mechanism, so there is still a need to strengthen the promotion. Besides, even with the Firefly Project as a financing guarantee mechanism, ESCOs still have difficulty obtaining low-interest loans. Therefore, in addition to the guarantee mechanism, the Taiwan government should provide funds for low-interest loans for ESCOs to support the development of the ESCO industry.