Sunday, August 12, 2012

Green Deal loans to be underwritten by Government

Danny Alexander, Chief Secretary to the Treasury
Danny Alexander said said that there are over 30 expressions of interest so far in Green Deal infrastructure loans.
The Green Deal is to be an early candidate for UK Infrastructure Guarantees scheme, said Danny Alexander, Chief Secretary to the Treasury, last week.

In other Green Deal news:
  • the register for Green Deal providers, assessors and installers has been opened
  • a £7 million loan has been advanced to the Green Deal Finance Company (GDFC)
  • and social landlords are being encouraged to take up the millions of pounds still on offer for Renewable Heat Premium Payment Scheme.

Infrastructure Guarantees

The Infrastructure Guarantees scheme is a new credit enhancement scheme set up to kick-start critical infrastructure projects by stimulating the injection of private finance with loans underwritten by the Government.

Mr. Alexander said that there are over 30 expressions of interest so far.

"The Green Deal is the largest ever programme for investing in the energy efficiency of our housing stock," Mr. Alexander told the Global Business Summit on infrastructure in London, “And we are looking at whether and how a guarantee could ensure that the finances are in place to get the programme off to a very strong start."

A spokesperson for the Department of Energy and Climate Change (DECC) said that it "is currently undertaking discussions with interested parties, such as the banks and investors on whether and how a guarantee could support the provision of low cost finance for Green Deal."

Attracting loan financing has been one of the stumbling blocks inhibiting the full launch of the scheme this October. The Institution of Civil Engineers (ICE)'s Director General, Nick Baveystock, expressed relief at the news: “When this scheme was announced, we and others across industry voiced concerns around whether the criteria for accessing guarantees were too high to attract applicants," he said.

"The news that there are over 30 expressions of interest so far is positive and we look forward to further updates from Government on which [other] projects it will be providing guarantees for.

“Reducing demand by making existing older homes more energy efficient is a vital if we are to have a resilient, affordable and low carbon energy system in future years," he added. But he cautioned that the government must make public "figures on exactly how many projects are actually moving forward as part of the scheme”.

DECC also announced yesterday that it has advanced a £7 million loan to the Green Deal Finance Company (GDFC), the not-for-profit company that will provide low-cost Green Deal finance to homeowners and businesses. Longer term, it expects to secure finance from the bond markets to ensure residents taking the Green Deal will be offered sufficiently low rates to attract their interest.

The GDFC is also in discussions to secure financing from the new Green Investment Bank (GIB). The GDFC's members include British Gas, Carillion, Clifford Chance, E.ON, EDF Energy, Goldman Sachs, HSBC, Insta Group, Kingfisher, Linklaters, Lloyds Bank Corporate Markets, Mark Group, npower, PwC, RBC Capital Markets and SSE.

It was forced to suspend operations earlier in the summer because it had not been able to secure the funding it needed through UK Green Investments, which had been set up to provide funding ahead of the GIB receiving State Aid approval.

State Aid approval has still not been given but is expected by the end of the year.

Green Deal register

DECC also announced that it has opened the register for Green Deal providers, assessors and installers. This register will give the 'seal of approval' to businesses that successfully go through the Green Deal authorisation process.

A Green Deal Quality Mark will show who is authorised and protect consumers.

"The opening of the Green Deal register will enable businesses to start becoming Green Deal authorised and the Green Deal Quality Mark will show they have met our standards. Crucially, this will protect consumers, who will know that anyone displaying the Quality Mark has been through the required process to become authorized," said Energy Minister Greg Barker.

Anyone with questions about the guidance should contact the Green Deal Oversight and Registration Body on 020 7090 1031 or visit their website at

Businesses wishing to become Green Deal Providers can apply directly online, while accredited certification bodies will be able to submit the details of Assessors and Installers to be authorised.

Many housing associations are hoping to become Green Deal providers and include: Gentoo, Affinity Sutton, Places for People, Alliance Homes and the Aster Group.

Social landlords

These and other social landlords have also been encouraged to take up the millions of pounds still on offer for renewable heat.

This is under the Renewable Heat Premium Payment (RHPP) scheme, which had failed earlier in the year to disburse all of the funds at his disposal.

The competition is being reopened, with a millions of pounds available for social landlords to get kit such as biomass boilers, solar hot water panels and heat pumps into social tenants’ homes.

Energy and Climate Change Minister Greg Barker said: “I would urge social landlords across the nation to apply and take advantage of all this scheme has to offer.”

Registered providers for social housing, such as local authorities and social housing associations, can bid for funds up to the Sterling equivalent of €200,000, which currently amounts to around £156,000 each. Up to £2.5 million of additional funding will be allocated under this element of the competition.

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