An alliance between the UK Green Investment Bank (GIB) and Societe Generale Equipment Finance (SGEF) will see GBP50m of finance provided for energy efficiency projects, with each institution committing GBP25m, GIB announced on Wednesday.
SGEF, an international equipment and vendor finance specialist, will work with GIB, which has been funded by the UK Government to the tune of GBP3.8bn in order to accelerate the UK’s transition to a greener economy, to help public and private sector organisations reduce their energy costs and greenhouse gas emissions.
Under the partnership, funding will be provided to organisations to carry out energy efficiency measures, including projects such as combined heat and power plants, boilers, building retrofits, lighting and energy reduction technologies for production processes, among others.
The GIB-SGEF alliance will makes its first investment of GBP5m in a project at Rampton Hospital in Nottinghamshire and will ultimately provide the finance for the full amount of the project. The design and installation of a combined heat and power plant, dual fuel boilers, biomass boilers and an effluent treatment plant at the hospital will be carried out by Cofely, a provider of energy and technical services. Cofely will make the initial investment of GBP5m and will be reimbursed by GIB-SGEF when the installation has been completed. Nottinghamshire Healthcare NHS Trust, which manages Rampton Hospital, will pay the cost back over a 15 year period. Cost savings from the energy efficiency measures are expected to exceed the cost of the repayments. GIB added that a similar ‘spend to save’ model will be used for other projects financed by the alliance.
According to GIB, the project at Rampton Hospital is expected to save the hospital GBP1.7m. Over the lifetime of the project, 88,000 tonnes of CO2e will be saved, which will have a similar effect as taking around 2,500 cars off the road. The project will also generate around 5000 MWhth per annum of renewable heat and the effluent treatment plant will improve the efficiency of wastewater quality and energy.
Chief executive of UK Green Investment Bank, Shaun Kingsbury commented:
“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.”
Societe Generale Equipment Finance UK’s managing director, Giles Turner, stated:
“SGEF is delighted to have worked in partnership with Cofely and UK Green Investment Bank in assisting Rampton hospital with its key investment in new energy efficient heating and water treatment plant. The conclusion of the Rampton project demonstrates SGEF’s successful strategy of working with market leading service providers, where long term partnerships help deliver finance solutions in a cost effective and proven manner. With UK Green Investment Bank’s support in this exciting market, SGEF looks forward to supporting UK investment in energy efficient measures and further success with NHS and industrial customers”