The Green Deal Finance Company (GDFC) has confirmed details of a £244m funding package agreed with a major group of shareholders, the Department of Energy and Climate Change (DECC) and the UK Green Investment Bank (UK GIB).
The finance agreement provides GDFC with the means to set up and administer Green Deal plans enabling Green Deal Providers to begin sellings the plans immediately.
The package consists of £69m capital from stakeholders including British Gas, Npower and PricewaterhouseCoopers LLP, £50m from DECC and £125m provided by UK GIB.
Coupled with a debt facility that The Green Deal Finance Company intends to arrange with the European Investment Bank, this financing package will provide over £300m of finance for at least the first year of expected demand for Green Deal Plans.
The GDFC has also confirmed that it is offering an initial interest rate for Green Deal Plans of 6.96% per annum. Each Green Deal Plan will also have a set up charge of £63 and an annual operating charge of £20.
Mark Bayley, chief executive of the Green Deal Finance Company, said: “I am delighted to confirm the completion of the £244m financing package with our principal stakeholders, DECC and the UK Green Investment Bank. We can now offer Green Deal Providers a one-stop-shop to set up, finance and administer Green Deal Plans. This package will provide very long-term and low-cost funding to enable householders across all parts of the country to finance energy efficiency improvements to their homes.
“By ensuring that householders can only borrow what they can expect to save in energy bills, and by offering a fixed rate for 10 to 25 years, Green Deal Plans will be affordable and widely available to over 80 percent of the population. No other consumer credit product offers a fixed rate for up to 25 years and is this inclusive.
“I am also delighted to be making this announcement after very strong growth in Green Deal assessments of energy-saving measures requested by householders during March, well in excess of the 1,800 or so assessments carried out in February. Many of these assessments can be expected to convert into Green Deal Plans as householders install the measures into their homes.”