*3.1. Research Assumptions and Design*

As shown above, the realisation of energy industry projects in local governmen<sup>t</sup> units and enterprises is often a challenge and even a problem, resulting in low motivation to undertake such projects. The reasons for this situation certainly include the difficulty of selecting appropriate sources of financing for those projects, often combined with poor preparation and qualification for managing them and the need to accept deferred profit or to obtain dominant environmental and social profits with only a small margin of economic gain from such projects.

In principle, in addition to direct financial resources, the use of both EU funds and repayable and non-repayable national public funds for energy industry projects is recommended. This is, however, connected with numerous limitations described in literature, such as bureaucratic procedures, a long waiting period for project evaluation, restrictive conditions of project accounting, the risk of having to return the grant, a lack of funds for investor contribution, limited eligibility of costs and activities that can be financed from the grant. Moreover, when it comes to externally financed repayable debt (e.g., a loan or credit), the main problem is often the inability to demonstrate adequate collateral for the debt or the need to include it in the financial statements as an additional encumbrance on the entity's liquidity [43–45].

Taking the identified limitations concerning the implementation of the described forms of financing of the energy industry projects by local governmen<sup>t</sup> units and enterprises into account, in this article, the authors formulated a research problem concerning the conditions of applying the ESCO formula as a solution supporting those entities in terms of energy industry project development.

To solve the research problem, the authors defined two research questions:

1. What factors influence the interest of local governmen<sup>t</sup> units and enterprises in implementing energy industry projects in the ESCO formula in Poland?

2. What solutions can support the implementation of the ESCO formula in Poland? To answer the first research questions, the authors analysed:



To answer the second research questions the authors analysed:

	- - the attractiveness of different instruments financing energy industry projects;
	- - the benefits for the local governmen<sup>t</sup> units and enterprises resulting from using the ESCO formula;
	- - the influence of current and future target groups on the ESCO formula development in Poland.

Based on the above research questions, the authors defined the paper's goal concerning recognising the conditions for applying the ESCO formula by local governmen<sup>t</sup> units and enterprises implementing energy industry projects in Poland.

Additionally, the authors formulated three sub-goals:

