SMEs To Get Help From The Green Investment Bank

The UK Green Investment Bank (GIB) is launching a fund aimed at helping SMEs to make new investments in energy efficiency.

It is providing £1 million via its funding manager Sustainable Development Capital LLP (SDCL), which is being matched by £1 million from SI Capital R&S 1.

The cash will be used to fund the ReEnergise Finance Ltd Smart Energy Finance vehicle, which will provide loans to small firms. These can be used for projects such as biomass boilers and low-energy lighting, with firms being able to pay the money back out of the cash saved by having lower energy bills.

Loans are expected to vary in size from £25,000 to £400,000 and around 20 projects are expected to be funded by the initial £2 billion investment, ultimately building up a portfolio of assets worth £10 billion.

Chief executive of the GIB Stuart Kingsbury said: "The investment announced today will help small businesses across the country to save money. Energy is a significant cost for any company, and putting in place energy efficiency measures will have a real impact on these organisations' bottom line.

"The funding model means that they won't need to find the capital upfront and can pay for the capital costs from the savings they make on energy bills."

Since it was formed in 2012, the Green Investment Bank has injected £50 million into the SDCL vehicle for the purpose of helping SMEs become more energy efficient.

The announcement comes just after the GIB published its latest annual report, which revealed it had committed £668 million to 18 new green projects in 2013-14, leveraging a further £1.9 billion of private sector money in the process.

It is also planning to raise a £1 billion fund to encourage investment in offshore wind farms.

The GIB said its current portfolio of investments, once fully operational, will help cut carbon emissions by 3.5 million tonnes a year and produce 12.8 TWh of renewable energy, enough to power three million homes.

Expert Opinion

For small businesses, every penny can be incredibly important – so it is vital that they consider potential easy wins when it comes to operation efficiencies. <br/> <br/>“Energy efficiency is one potential area to embrace and could ensure that organisation are able to maintain a focus on using their finances to drive their business ambitions forward. <br/> <br/>“We would urge small firms to consider their options in this area and also seek legal advice to ensure that they meet all responsibilities when it comes to taking advantage of the opportunities that this new funding creates.” <br/> Steven Beahan - Partner