The UK Green Investment Bank (GIB) and Societe Generale Equipment Finance (SGEF) have joined forces to provide £50m of finance for energy efficiency projects. Both institutions are committing £25m.
The alliance will marry SGEF's track record in equipment financing with additional capital and expertise from GIB, helping public and private sector organisations reduce their energy costs and greenhouse gas emissions.
Funding from the alliance will allow organisations to put in place energy efficiency measures without having to fund the finance upfront. Projects could include combined heat and power plants, boilers, building retrofits, lighting and energy reduction technologies for production processes, among others.
The first project to benefit from the GIB-SGEF partnership is at Rampton Hospital, managed by Nottinghamshire Healthcare. The £5m investment will finance the installation of a combined heat and power plant, dual fuel boilers, biomass boilers and an effluent treatment plant.
Shaun Kingsbury, chief executive, UK Green Investment Bank, said, "Many organisations understand that energy efficiency measures make good commercial sense but, with few financiers in this space, they simply cannot afford the initial investment. Our partnership with one of the industry leaders allows these organisations to realise cost savings from day one without having to fund the capital upfront. The project at Rampton Hospital is a great example of how an institution can lower its energy costs, produce on-site heat and power, manage waste and cut its carbon emissions."
The Trust will pay the cost back over a 15 year period. This 'spend to save' model means that the cost savings from the energy efficiency measures will exceed the cost of the repayments. A similar model will be used for other projects financed by the alliance.
It is estimated that the project at Rampton Hospital will save the hospital £1.7m. It will save 88,000 tonnes of CO2e over the lifetime of the project, equivalent to taking around 2,500 cars off the road. It will also generate around 5000 MWhth per annum of renewable heat. The effluent treatment plant will improve wastewater quality and energy efficiency.