In brief, contracting is a financing method that enables investments to be made in energy saving measures, by placing the burden of the investment cost on a contractor or contracting fund until it is repaid through the energy costs saved.
The idea of Internal Contracting, often called Intracting (municipal internal performance contracting scheme), is to enable the municipality to finance multiple investments for energy savings without being tied to an external contractor. This requires that a revolving fund be setup.
Special features of Internal Contracting in Águeda: The FEWE has no legal status and is formed by the transfer to a specific heading in the municipal budget, established for this purpose, of an initial amount of funding created by the Municipality, as well as extra financing necessary to attain the objectives. After the formal decision by the Mayor, the proposal is forwarded for implementation to the Division of Environment and Sustainability.The Fund is 100% financed by the municipal budget, with €300,000 as a seed, and by the water and energy savings.