The term “energy performance contracting” or “energy contracting”, as the institute for the contractual provision of energy savings is often colloquially called, is defined by Directive 2012/27/EC on energy efficiency in Article 2 (27) as a contractual arrangement between the beneficiary and the provider of an energy efficiency improvement measure, verified and monitored during the whole term of the contract, where investments (work, supply or service) in that measure are paid for in relation to a contractually agreed level of energy efficiency improvement or other agreed energy performance criterion, such as financial savings.

In this regard, recital 47 of the Preamble of the Energy Efficiency Directive states that as in other forms of third-party financing arrangements, in an energy performance contract the beneficiary of the energy service avoids investment costs by using part of the financial value of energy savings to repay the investment fully or partially carried out by a third party.

With the adoption of the Energy Act (Energetski zakon), the concept of energy performance contracting was also transposed into the Slovenian legal system, namely in Article 4 (29), where the law reiterates the diction of the term “energy performance contracting”, as written in the Energy Efficiency Directive, but the Energy Act fails to regulate the energy performance contracting institute in more detail.

Guidelines for the implementation of energy efficiency improvement measures in public sector buildings according to the principle of energy performance contracting On 23 December 2014, the Ministry of Infrastructure published Guidelines for the Implementation of Energy Efficiency Improvement Measures in Public Sector Buildings According to the Principle of Energy Performance Contracting. The Guidelines represent explanations, instructions and recommendations for the implementation of energy efficiency improvement measures in public sector buildings under the principle of energy performance contracting.



Energy efficiency improvement projects in public sector buildings can be undertaken in one of the following ways:

  • As a classic public procurement, in cases where the contracting entity fully provides the necessary financial resources for implementing the necessary energy rehabilitation measures of a public building. In these cases, the project is managed like other classic public investments, in which the contracting entity is obliged to prepare project and investment documentation, including detailed technical specifications for the implementation of the necessary measures to improve the energy efficiency of the public building. Bidders then submit their bids for the implementation of measures pursuant to the provisions of the tender documents, as defined in advance by the contracting entity. Providers do not assume the risk of ensuring energy savings but exclusively the risks associated with the implementation of the undertaken measure, as defined by the technical specifications. Responsibility and consequences for errors or deficiencies in the technical specifications are assumed by the contracting entity. The achieved energy saving belongs entirely to the contracting entity. As a rule, the provider does not guarantee energy savings, but the payment method may be designed to take into account the actual energy savings achieved;
  • In the form of a public-private partnership, taking into account the provision of Article 80 of the ZJZP, in such a way that facilities and devices become concessions either immediately (for example, the build-transfer-operate or BTO model) or after a certain period has passed (for example, the build-operate-transfer or BOT) property of the public partner, unless this is not possible or economically justified (for example, the build-operate-own model or BOO). Economic viability must be established for each model, and this must be the subject of an assessment in the preliminary procedure.

Here, it is reasonable to take into account the provisions of Directive 2014/23/EU that provides the concessionaire shall be deemed to assume principal operating risk where it is not guaranteed to recoup the investments made or the costs incurred in operating the works or the services which are the subject-matter of the concession. In the Preamble, the Concession Directive makes clear that the main feature of a concession, the right to exploit the works or services, always implies the transfer to the concessionaire of a risk of economic nature involving the possibility that it will not recoup the investments made and the costs incurred in operating the works or services awarded. The application of specific rules governing the award of concessions would not be justified if the contracting authority relieved the operator of any potential loss by guaranteeing a minimal revenue equal to or higher than the costs that the operator has to incur in relation to the performance of the contract. Simultaneously, the Preamble of the Concession Directive explains that some of the arrangements which are fully paid by the contracting authority should be considered concessions if the return on the investments and the costs incurred to the operator in operating the works or providing the services depends on the actual demand for services or resources or their delivery. In relation to the concept of energy performance contracting, the provisions mentioned above must be understood in such a way that the private partner assumes most of the project risks, i.e. the risk of design, construction and management, including the risk of financing the necessary measures to carry out the energy renovation of a public facility, as well as the risk of ensuring the minimum agreed on energy savings, whereby payments to the private individual are linked and depend on the achieved energy savings. One of the key features of energy performance contracting is precisely that the investment in the implementation of the necessary measures is recouped through the generated energy consumption savings, which means that the private individual is entitled to payments for services provided with a reduced energy consumption only if actual savings are achieved. Otherwise, the service is not considered to have been performed or of a quality. In this regard, it is recommended for the contract to define payment mechanisms for bonuses and maluses, which financially reward the contractor who achieves higher savings than agreed and financially punish the contractor who fails to achieve the minimum agreed savings. In this way, private individuals are motivated to create the highest possible energy savings, as this increases the payment they receive.

Therefore, the fundamental feature of energy performance contracting is that the implementation of the necessary measures to improve energy efficiency is mostly financed from the energy savings created as a result of the implemented measures. For this reason, regardless of the chosen path of project implementation or the chosen public-private partnership model, the risk of ensuring the agreed energy savings must be assumed by the contractor or a private partner, whereby its payment shall be linked to the achieved results of the implemented measures and the actual savings achieved.



Energy performance contracting projects in Slovenia can be implemented mainly in the following forms of public-private partnerships or forms derived from them:

  • As a works concession in the form of DBTO: the specified form is useful in cases where the private individual does not become the owner of the implemented measures, but the property right of the implemented measure immediately passes to the public partner (e.g. in the case of replacement of windows, rehabilitation of facades, roofs or in other cases, where there is a permanent connection of the implemented measure with the real estate and the principle of superficies solo cedit applies as defined in Article 8 of the Law of Property Code: “Anything with a purpose that is permanently affixed to an immovable property or anything that is permanently situated on, above or under an immovable property, shall be a component thereof unless otherwise provided by an Act”), whereby the above could be considered as an investment by a private investor in a public building, i.e. in a fixed asset of the other, which would result in an increase in public debt. Therefore, in practice, the stated issue is solved by using the so-called up-front payment(s), i.e. the private partner pays the public partner a concession fee in advance for granted concession, which is used to pay the costs of the implemented measures to the private partner, with the criterion of acceptability of offers, as a rule, it is considered that the amount of the offered concession fee must not be less than the estimated costs of implementing the necessary measures. In the rest, all elements characteristic of energy performance contracting can be successfully implemented;
  • As a works concession in the form of DBOT: the specified form is useful in cases where a private individual can remain the owner of the implemented measures (e.g. in the case of modernisation of boiler rooms, replacement of lighting elements, air conditioning devices or in other cases when the implemented measure is not permanently combined with real estate) or when it is possible and permissible to grant, e.g. building rights to a private individual. Precisely in the case of the use of the right of superficies institute, special attention should be paid to the issue of payment of compensation for the granted right of superficies and, on the other hand, to the issue of the increased value of the real estate due to the private partner’s investments in the public building upon the termination of the concession relationship. The advantage of the mentioned model is that it does not affect the increase in the public debt of the public partner and that it allows the private partner to manage the investments in the implemented measures in its books of account as its fixed assets;
  • As a services concession or as a works concession in the form of DBOO: in this regard, Article 80 (2) of ZJZP is particularly relevant, which stipulates that in the event of structures and facilities of a concession not becoming the property of the public partner, this shall not be a works concession but a services concession. Therefore, it is a form where the owner of the implemented measures remains a private partner. Unlike the works concession forms mentioned above, where the procedure for the implementation of the public tender is conducted taking into account the provisions of the regulations on public procurement, in this case of awarding the concession, the service is not carried out under the rules of the regulations on public procurement, but (until the enactment or implementation of the Directive on the awarding of concession contracts) the public tender procedure is carried out taking into account the rules of the ZJZP, in cases where the concession service also includes the performance of an economic public service, also taking into account the ZGJS.

In all the cases mentioned above, special attention should be paid to the issue of early termination of the concession relationship, as well as to the tax aspects of individual chosen solutions.



The selection of the energy performance contracting model depends mainly on the substance of the planned energy rehabilitation measures.

For projects where the majority of investment in energy retrofits will relate to: e.g. replacement of windows, renovation of the facade, renovation of the roof, implementation of insulation measures, renovation of internal installations, etc. we estimate that it is most suitable to choose the works concession model in the form of DBTO. For projects where the majority of the investment in the energy retrofits of the building will relate to: e.g. renovation of boiler rooms, heat pumps, air conditioning and air recovery devices, cogeneration units, photovoltaics, updating of internal and external lighting, etc., we estimate that it is most suitable to choose a works concession model in the form of DBOT.

Where there is a combination of different measures, a combination of both works concession models in the form of DBTO and the form of DBOT is also permissible.

Where there will be no transfer of ownership of the implemented measure to the public partner or when the subject matter of the concession is mostly only the provision of services, e.g. energy-saving service, energy management service, etc. we believe it is most appropriate to choose the services concession model.



In the context of the contractual provision of savings, the latter cannot be calculated in advance simply as a comparison between past energy costs and costs after the investment.

The costs for the energy used depend on many variables that do not depend on the individual and the quality of the measures implemented, for instance:

  • Energy price,
  • Time of use of the facility,
  • Temperature deficit,
  • The additionally implemented measures,
  • Any other factors.

Failure to take into account the factors mentioned above when calculating the actual savings could result in a private person carrying out flawlessly all the measures and services but still not be entitled to payment, or vice versa, in the case a private person’s measures not contributing to savings at all, and the public the partner nevertheless makes payments for apparent savings due to less use of the facility, warmer winters or other factors.