In Croatian legislation ESCO is known as the providing of energy service
In general the term ESCO means a model of implementing measures of improving energy efficiency in which a private ESCO company develops a project to improve energy efficiency, invests their own funds in the implementation of energy efficiency measures, technology and work on the property of the client and by the implementation of modern technology it increase energy efficiency and achieves energy savings for the client, and the compensation for investing their own funds is paid back exclusively from those achieved savings. ESCO model refers to buildings, heating and public lighting.
In the essence ESCO implies a private company which is performing a specific energy efficiency project on the property of the client that includes the development, designing, financing and the implementation of the project in a way that ESCO company invests its own resources (money, technology and work) in the project and is paid back exclusively out of verified savings during a number of years.
When providing modernization / reconstruction of public lighting using this model, a private ESCO company invests its own resources in the modernization / reconstruction and thereby bears the full financial, technical and commercial risk. In this way the local government (LGU) immediately gets new and technologically modern public lighting with no initial investment and costs, while the ESCO company charges paid back instalments exclusively out of measured and verified savings (for which ESCO company provides the guarantees) during contracted number of years.