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

Yu-Sen Chuang, Hong-Ping Cheng, Chin-Chi Cheng


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.


Debtor-creditor relationship; Financing guarantee; Firefly project; Revolving fund; Small and medium enterprise (SME)

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