Green loan facility would enable associations to keep feed-in tariff income
NHF plans £75m retrofit fund
The National Housing Federation has called for expressions of interest from housing associations to set up a retrofit loan fund that could be worth hundreds of millions of pounds.
It is working with the European Investment Bank to set up a vehicle that could finance retrofit across the UK social housing sector.
The EIB could commit a minimum of £75 million to the fund. However, it is understood to prefer larger scale loans in the order of £200 million, with which it would lend 50 per cent of the costs, meaning that the fund could be worth much more than this. The fund is intended to act as a green loan facility for associations to borrow through the Housing Finance Corporation at very low rates over a period of at least 25 years.
Around 25 housing associations would need to participate in order to make the fund work successfully.
Improvement work would focus on installing photovoltaic panels and renewables to take advantage of the government’s feed-in tariff scheme.
To borrow money, housing associations would have to produce a business plan for their housing stock. Any loan would be made using FIT income to finance further works and repay interest on the loan.
The NHF is working with the Energy Efficiency Partnership for Homes and other partners, including the HFC and environmental consultancy Camco, on the deal.
Piers Willamson, chief executive of the HFC, said the fund would be touted as a more financially beneficial alternative to the companies that are offering to install ‘free PV’ on the roofs of housing association properties in return for the income from the FIT.
Mr Williamson said: ‘By signing up to a scheme there are plenty of benefits, but someone else is trousering the profit. This allows for more of the value of the feed-in tariff to be captured by a housing association.’
The HFC wants to launch a separate fund in Scotland that would also work for local authorities.
Corine Meier, international affairs officer at the NHF, said: ‘This is a way to make the feed-in tariffs and, if and when it’s in place, the renewable heat incentive schemes accessible to members, as the initial cost of capital is the main barrier at present for them to invest in photovoltaics.
‘This project will not however replace the need for suppliers obligations and the green deal to pay for energy efficiency measures.
Retrofit fund : the figures
£75 million
initial amount secured from the European Investment Bank
25
minimum number of housing associations needed to make the fund work
25 years
minimum loan period
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Readers' comments (1)
Barry Johnston | 02/09/2010 6:24 pm
This looks like better value than the free PV schemes - if you buy in bulk.
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