• El Amir INC, a small-sized enterprise specializing in the hospitality industry, particularly in managing upscale resorts and hotels in Egypt, is dedicated to aligning its operations with Sustainable Development Goals (SDGs). Recognizing the urgent need to enhance energy efficiency, the company aims to make substantial contributions to Sustainable Development Goal 7: Affordable and Clean Energy.Current Conditions:

  1. Energy Efficiency Assessment: The SME, El Amir INC, conducted a thorough assessment of its energy consumption to gain a detailed understanding of its environmental impact. The assessment covered both internal energy usage (Scope 1) and indirect energy usage associated with the supply chain (Scope 2).

  • Scope 1 Energy Usage: El Amir INC's direct energy consumption from internal sources, including production processes and facility operations, amounts to approximately 50,000 megawatt-hours annually.

  • Scope 2 Energy Usage: Indirect energy consumption resulting from the supply chain, mainly associated with raw material production and transportation, is estimated at an additional 30,000 megawatt-hours per year.Breakdown of Energy Consumption

  :• Production Processes: Production processes contribute the most to energy consumption, accounting for approximately 60% of the total energy usage (30,000 megawatt-hours annually).

  • Facility Operations: Energy consumption in facility operations, including lighting, heating, and cooling systems, constitutes around 25% of the total energy usage (12,500 megawatt-hours annually).• Supply Chain: The supply chain's energy footprint, related to raw material production and transportation, contributes to the remaining 15% (7,500 megawatt-hours annually).Comparative Analysis

  :• Previous Energy Consumption Levels: A comparative analysis indicates a 8% increase in total energy consumption over the past three years, emphasizing the growing environmental impact of El Amir INC's operations

  .• Industry Benchmarks: Benchmarking against industry standards reveals that El Amir INC's energy intensity (energy consumption per unit of production) is 25% higher than the industry average, highlighting the need for targeted energy reduction initiatives .Immediate Action Items:

  • Energy Efficiency Targets: Setting a target to enhance energy efficiency by 20% within the next two years, aiming for a total reduction of 16,000 megawatt-hours annually.

  • Supply Chain Optimization: Implementing a supply chain optimization strategy to identify and reduce energy-intensive processes, with a goal to decrease supply chain-related energy consumption by 10%, equivalent to 3,000 megawatt-hours annually

  .• Technological Innovation: Investing in innovative production processes and technology upgrades with the aim of cutting energy consumption associated with manufacturing by 30%, targeting a reduction of 9,000 megawatt-hours annually.

  2. Regulatory Environment: El Amir INC operates in Egypt with tightening environmental regulations. Compliance with energy consumption reduction targets is not only essential for sustainability but also for maintaining a competitive edge in the market.

  3. Technological Infrastructure:

  • The current technological infrastructure of El Amir INC includes outdated machinery and energy-intensive processes, contributing to higher energy consumption.• The company recognizes the need for technological upgrades to adopt cleaner and more energy-efficient production methods

  .4. Financial Landscape:Budget Allocation for Sustainability Initiatives: El Amir INC allocates approximately 1% of its annual budget to sustainability initiatives, amounting to 10 million LE earmarked for enhancing energy efficiency and aligning with Sustainable Development Goal 7.Projected Investment for Energy Efficiency Projects: The projected investment required for implementing energy efficiency projects, including technological upgrades and process innovations, is estimated at 90 million LE over the next three years.Current Financing Sources: El Amir INC currently relies on traditional bank loans and internal reserves for financing its sustainability projects. The company has secured a loan of 30 million LE, with an interest rate of 7%, to initiate the first phase of its energy efficiency initiatives. Debt Service Capacity: The company's debt service capacity, considering existing loans and interest rates, allows for an annual repayment of up to 10 million LE without significantly impacting operational efficiency.

  5. Supply Chain Collaboration:

  • El Amir INC has identified the importance of working collaboratively with suppliers and customers to create a more sustainable supply chain. However, there is a need to find financially viable incentives to encourage participation and cooperation in enhancing energy efficiency.6. Employee Engagement:

  • The employees of El Amir INC are aware of the company's commitment to sustainability. However, there is a need for training programs to enhance their understanding of sustainable practices and encourage active participation in energy efficiency initiatives.Student Research Objectives:Given the current conditions, students are tasked with conducting research to identify the best alternative financing options for El Amir INC to achieve its SDG goal of energy efficiency optimization. The research should include:1. Financial Instruments:

  • Explore and evaluate various financial instruments, such as green bonds, sustainability-linked loans, or impact investing, that align with the company's sustainability goals.

  • Research financing options specifically designed for technology upgrades and innovations that promote energy efficiency and emissions reduction.2. Government Grants and Incentives:

  • Investigate available government grants, subsidies, or tax incentives related to energy efficiency. Assess the eligibility criteria and application process.3. International Grants and incentivesInvestigate available international grants and incentives related to energy efficiency. Assess the eligibility criteria and application process4. Risk and Return Analysis:

  • Conduct a risk and return analysis for each proposed financing option, considering both financial and non-financial impacts on the company's operations and reputation.

  
  

 

 

Answer rating: 100% (QA)

To conduct research on alternative financing options for El Amir INCs energy efficiency initiatives aligned with Sustainable Development Goal 7 heres a structured approach 1 Financial Instruments Eval... View the full answer