Government to give green deal a £40bn boost
The government is planning to give its flagship energy efficiency scheme a boost by including it in its £40 billion UK guarantees scheme.
Chief Secretary to the Treasury, Danny Alexander, is to announce later today that the green deal will be an early candidate for receiving government guarantees.
Last month Chancellor George Osborne unveiled the UK guarantee scheme in which the government will underwrite £40 billion of stalled projects within the National Infrastructure Plan by offering guarantees for projects ready to start in the next 12 months.
The Department of Energy and Climate Change also today announced it had agreed to make a £7 million loan to The Green Deal Finance Company so the organisation can provide low cost finance early in 2013.
The moves will be welcomed by welcomed by critics that are concerned that the financing risks around the green deal will put off the private sector companies expected to deliver the scheme as ‘green deal providers’ when it is soft launched in October.
Under the green deal, households will be able to receive energy efficiency works on their homes at no upfront cost.
The green deal providers that pay for the works through green deal finance loans that are fixed to the properties will recoup the costs through the resulting savings in household energy bills.
Earlier this year the GDFC said it had put its work on hold as it waited on hearing a confirmation of whether it would receive a £300 million loan from the Green Investment Bank which is awaiting state aid approval in Brussels. However, it has since continued its work.
Climate change minister Greg Barker said: ‘The loan we have agreed with The Green Deal Finance Company will help them to undertake essential development and be ready to offer finance to green deal providers in early 2013.’
Speaking at the UK Trade & Investment Infrastructure Summit at Lancaster House in London today Mr Alexander will say: ‘I am pleased to announce that the green deal will be an early candidate for the use of these guarantees.
‘The green deal is the largest ever programme for investing in the energy efficiency of our housing stock and we are looking at whether and how a guarantee could help ensure that the finances are in place to get the programme off to a very strong start.’