The Carbon Trust and Siemens announced the launch of a new £550m (US $894 million) green financing initiative that commits to helping firms cover the upfront cost of energy efficiency investments.
The scheme, to be formally launched in early April, promises to offer a corporate version of the government's proposed Green Deal scheme, allowing firms the opportunity to cover the cost of the financing through the energy savings that result from increased efficiency.
Siemens Financial Services Ltd will provide the £550m of financing over the next three years and manage the supply of the funding, while the Carbon Trust will use its experience of managing energy efficiency projects to assess the carbon, energy and cost savings of loan applications in order to ensure that the financing pays for itself through reduced energy bills.
The scheme will welcome applications from businesses as of April 4 and will also be reinforced later this year by the launch of a new joint venture between Siemens and the Carbon Trust that will offer firms procurement support designed to ensure they purchase effective energy efficiency equipment from accredited suppliers.
Tom Delay, chief executive of the Carbon Trust, said that the scheme would aid businesses to bridge the financing gap that hampers many energy efficiency projects. "A missing ingredient at present is access to affordable finance to enable business to make green investments," he said. "This new major finance facility will improve business competitiveness, cut carbon, and boost green growth."
The proposal was also welcomed by John Sauven, executive director at Greenpeace, who predicted that it could provide a template for further green financing schemes. "A green growth strategy can only work if it is backed by green finance," he said. "Deals like this, alongside the development of a green infrastructure bank, could be a tipping point that the U.K. economy needs to get out of the current doldrums."
The new venture will also provide a major boost to the Carbon Trust in the wake of the announcement last month that it will see its budget slashed by 40 percent next year as a result of the coalition's spending cuts. About 35 jobs are expected to go at the government-backed company as a result of the cuts and a number of services will be scaled back.
However, the Siemens deal appears to provide a template for how the Trust can continue to offer effective services by strengthening ties with commercial organizations.
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