Today Greg Barker could be excused for walking with a bit of swagger. To most of us, it’s just another relentlessly grey day of April drizzle. But today, for the climate change minister, the sun is peeking out from behind the clouds and the birds are singing. Why? Because, after a cruel two year winter for the green deal it appears that public opinion is starting to thaw – and maybe spring is around the corner.
First of all, the latest green deal assessment figures released by the Department of Energy and Climate change show an increase in interest from Joe Public. There have been more than 9,000 assessments carried out since the green deal launched properly at the end of January – and there were 7,400 in March compared to 1,803 in February. Sure, these are largely government subsidised and may not be converting to actual green deals, but it is promising nonetheless.
Best of all, though, the finance for the scheme has been secured. The Green Deal Finance Company today confirmed that it has raised £244 million of funding. Wehay. What a relief for Mr Barker. In the words of Paul Davies, partner, PwC Corporate Finance which has been overseeing the GDFC, the significance of this is that ‘finance is no longer a barrier’ to the success of the green deal.
‘The green deal’s success will ultimately be judged by its take up from households, landlords and housing associations, but the availability of TGDFC finance to all of them at a long term low rate is a huge catalyst to uptake,’ he says.
‘The scale of the combined buy-in from industry, government, and the Green Investment Bank to arrange this finance is unprecedented. We share a common view of the importance of long term low cost finance to underpin the green deal. The involvement of the Green Investment Bank has been critical. As one of the largest investments it has made, it’s a strong signal of their ability and willingness to underpin low carbon development and green growth.’
This is true. But as revealed by Inside Housing, only around half of this cash has come from the government’s Green Investment Bank. The GIB has put up £125 million of senior debt – by no means an insignificant sum (indeed, its biggest loan to date) – but less than half what Mr Davies was hoping to secure last year.
In addition to the GIB loan, the GDFC has raised £69 million from its members – mostly private blue chip companies, but also councils and housing associations - and ‘other stakeholders’. This is a combination of stakeholder loans and junior capital. On top of this, Mr Barker has managed to persuade his own department (DECC) to part with £50 million: £20 million as a junior capital facility and £30 million as a contingent capital facility for the GDFC. A big win in tight times.
On top of all this – and previously unreported by me or anyone else – the GDFC is hoping to secure a separate loan facility with the European Investment Bank to bump the overall package up to the £300 million Mr Davies had been targeting.
Next stop the capital markets. But that’s not Mr Barker’s problem. His work in getting the green deal off the ground is largely done. All he has to do is iron out the creases and make sure that momentum for the green deal keeps building – or at least that is what he will be telling himself as he struts down the street bathed in a beam of light, largely oblivious to the misery around him. Let’s just hope the coming days continue to bring good news for Mr Barker and the green deal.