National Wealth Fund and THFC launch unsecured retrofit debt facility with £150m from pension insurer

The aim is to help speed up the retrofit of social housing stock across the UK and accelerate the country’s progress towards meeting its net zero targets.  

“Ambitions to curb greenhouse gas emissions require a significant retrofitting effort, yet high upfront costs are often prohibitive for low-income households,” the organisations said.

The National Housing Federation has estimated that close to £36bn of investment will be needed to fully decarbonise housing association properties.

Chancellor Rachel Reeves said: “This new partnership will unlock £150m in private investment and create further jobs, building on the 6,500 jobs already expected in the retrofit sector across the UK, so more people can get sustainable, high-quality, energy efficient social housing.

“The NWF is mobilising billions of pounds of investment in our world-leading industries, creating jobs and kick-starting economic growth, as we deliver on the country’s priorities in our Plan for Change.”

THFC and the NWF said they hope to grow the scheme to £250m over the next six months.

Priya Nair, chief executive of THFC, said: “Partnering with the NWF on this innovative approach to retrofit funding will bring significant benefits to the sector.

“The collaboration will help decarbonise the social housing sector and support the country’s net zero ambitions.”

The NWF – formerly the UK Infrastructure Bank – announced in October that it was working with Barclays and Lloyds Banking Group to release £1bn of funding for retrofit.

The NWF has £27.8bn and has been tasked with deploying it to mobilise private capital around the government’s strategic priorities.

John Flint, chief executive of NWF, said: “The launch of a long-term, attractively priced, unsecured offer into the market by THFC will accelerate uptake and increase the ambition of projects in retrofit.”

Tom Pearce, chief executive of Rothesay, added: “Innovative partnerships like these have the potential to unlock significant volumes of institutional capital, and we are committed to continuing to work with the NWF and THFC to support the growth of the facility along with other future initiatives.”

In September, Ms Nair said bond aggregator THFC was looking to find ways that would “make the cost of capital cheaper” for retrofit, which is not linked to obvious financial returns.