GIB forms 50m JV with Societe Generale to finance energy efficiency measures
The UK Green Investment Bank (GIB) and Societe Generale Equipment Finance (SGEF) have joined forces to provide £50 million of finance for energy efficiency projects. Both institutions are committing £25 million.
The alliance will marry SGEF's strong track record in equipment financing with additional capital and expertise from GIB, helping public and private sector organizations reduce their energy costs and greenhouse gas emissions.
Funding from the alliance will allow organizations 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 GIB-SGEF alliance will ultimately be providing the finance for the full amount of the project. Cofely, the energy and technical services provider, will design and install the equipment, including making the initial £5 million investment. GIB-SGEF will then reimburse Cofely on completion of the installation.
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.Health Minister Norman Lamb said:
"It is great to see the Green Investment Bank helping the NHS to save money and reduce emissions. I want all parts of the NHS look at how they can reduce their energy consumption, and I hope to see more hospitals across the UK benefit from the scheme announced today."Giles Turner, Managing Director of Societe Generale Equipment Finance UK, said:
"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"Paul Rawson, Energy Services Director, Cofely, said:
"The new energy centre will provide Rampton Hospital with a more efficient, reliable and responsive energy infrastructure that will deliver guaranteed savings with a fast return on investment. The long-term re-financing of our initial investment using GIB-SGEF funding, is an innovative alternative model to direct financing by Cofely, which we are now able to provide for our customers. We look forward to working with GIB-SGEF to help both the Trust and other public and private sector organisations reduce their energy costs and emissions through similarly financed projects."Dr Mike Harris, Executive Director Forensic Services, Nottinghamshire NHS Trust, said:
"This project, which has benefited from GIB-SGEF funding, will deliver on 'spend to save'. On completion the Trust will benefit from a new efficient and resilient plant, responsive specialist operator support and experience, plus Government incentive schemes such as the Renewable Heat Incentive (RHI), along with significant financial savings which can be invested back into services for patients."