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New GIB funding to make firms more energy efficient

New GIB funding to make firms more energy efficient

New GIB funding to make firms more energy efficient

The UK Green Investment Bank (GIB) has announced a £1 million round of funding intended to help small to medium-sized enterprises (SMEs) become more energy efficient.

Sustainable Development Capital LLP (SDCL) - GIB's fund manager - will be providing this finance, which is set to be matched by a further £1 million from SI Capital R&S1.

ReEnergise Finance Ltd's Smart Energy Finance vehicle will receive the full sum of this investment - and it will then be responsible for providing loans to SMEs for a wide range of energy efficiency projects.

Some loans have been granted for projects that are already underway, including some for biomass and lighting projects. In addition to this, further finance has been granted to organisations such as a garden centre and a training provider.

Smart Energy Finance is the first commercial vehicle designed to offer funding solutions to companies in the private and public sector alike. It is mainly intended for those who have struggled to find appropriate finance and independent advice so far.

As many as 20 projects are expected to gain support from this development, which is hoped to build a portfolio of £10 million in assets for GIB.

Projects will typically be valued between £25,000 and £400,000, with biomass boilers, low energy lighting and combined heat and power among the proposals that could lead to successful findings.

Companies taking advantage of these loans will find they are able to start making savings from day one as a result of how the business model has been created. This is because energy bills can be slashed by an estimated 20 per cent immediately.

Director of ReEnergise Finance Adam Hewson said he is delighted to be a part of this scheme and predicted demand is likely to be very high.

"It was clear from the outset that we would need to find investment partners to help build our fund, but more importantly deliver the range of dedicated energy efficiency financial services to UK SMEs we want to," he commented.

Chief Executive Officer of Sustainable Development Capital Jonathan Maxwell and partner of SDCL UK Jim Totty agreed collaborating with the ReEnergise team will be beneficial for businesses.

They explained biomass boilers, lighting retrofits and other efficiency-related retrofits represent "high quality deal-flow for energy efficiency projects for small commercial premises".

Despite this, they underlined the fact that it can be a difficult concept to promote to investors, which is something it is hoped this new funding will go some way to address.

Partner of SI Capital Michael Covington underlined the fact that his organisation is one of the UK energy efficiency market's leading asset finance platforms. He explained this means it "complements our existing portfolio of European smart energy solutions investments."

Business and energy minister Michael Fallon said: "This is a welcome investment that helps small businesses and shows that going green isn't just about building offshore wind farms or new energy plants. Any good business should want to become more efficient and saving on energy costs makes good business sense."

 

Posted by William Rodriguez

Image courtesy of Thinkstock/iStock