A Green Deal Finance Company (GDFC) has been formed to create a consortium investigating how to finance the best value Green Deal option for consumers.
High street names in banking, building and energy have signed a deal to create the not-for-profit financial company which will, it is claimed, deliver billions of pounds of energy efficiency investment to residential and business premises.
The GDFC will work alongside the Green Deal, which is designed to make home improvements affordable by removing the upfront cost. Although the consortium includes rival firms, the mixture of collaboration and competition is expected to meet demand and benefit consumers.
Members of the GDFC include British Gas, Carillion, Clifford Chance, E.ON, EDF Energy, Goldman Sachs, HSBC, Insta Group, Kingfisher, Linklaters, Lloyds Bank Corporate Markets, Mark Group, npower, PwC, RBC Capital Markets and SSE.
Paul Davies, a senior partner at consultants PwC, who is co-ordinating the founding of the GDFC, told the
Guardian: 'The new company would put together as many loans as possible and very quickly give access to the capital markets.'
Mr Davies added that the GDFC would allow the Green Deal loan rate to drop by three or four percentage points, perhaps from 9 to 6 per cent, with each percentage point drop meaning a 7 per cent increase in the energy efficiency refurbishments possible. He also expects the green deal loan book to have a credit rating of at least AA, and suggested that another advantage of the consortium approach was that the loans would not appear on the companies' balance sheets.
Chris Huhne, Secretary of State at the Department of Energy and Climate Change, said: 'This is an exciting initiative with the potential to reduce interest rates on Green Deal finance, while also supporting healthy competition amongst Green Deal providers including small businesses. New firms like the Green Deal Finance Company are testament to the attractiveness of the Green Deal framework and its potential to offer a better deal to consumers.'
For more information on the Green Deal click
here.
