ESCO (Engl. Energy Service Company) is the term for a company and a business model that incorporates planning, implementation and financing of energy efficiency projects, and it is funded through savings generated in usage and maintenance of facilities. To put simply, the clients of the ESCO companies make savings without investment or financial risk.
Definition from Directive EU 2006/32: ESCO (Energy Service Company) is defined as a natural or legal person that delivers energy services and/or other energy efficiency improvement measures in a user’s facility or premises, and accepts some degree of financial risk in so doing. Payment of provided services (in total or partially) is based on reached energy efficiency improvements and fulfilment of other criteria agreed upon regarding these targets.
With the Law on efficient energy use, the Republic of Croatia has accepted the definition of immediate expenditure according to the EU Directive.