A £500 million energy efficiency fund has been launched by the Mayor of London to help small businesses and public sector organisations to cut carbon emissions.
The Mayor’s Energy Efficiency Fund (MEEF) is the UK’s biggest ever dedicated investment fund for urban energy efficiency measures. It will aim to deliver new low carbon technology and upgrade existing infrastructure, with an investment period of up to 20 years.
The MEEF will support carbon-cutting projects such as on-site energy generation, battery storage, small-scale renewables and electric vehicle charging stations. The venture is being managed by infrastructure specialists Amber Infrastructure Group and has received £43m from the EU’s European Regional Development Fund.
It has also secured investment from sustainable bank Triodos, high street banks including Natwest and Santander, and the Sumito Mitsui Banking Corporation.
Mayor of London Sadiq Khan, said: “This is the largest fund of its kind in the UK that will help deliver the low-carbon, sustainable projects and infrastructure London needs to cut energy costs and reduce carbon emissions across our universities, hospitals, museums and small businesses.
“It is a great example of how the public and private sectors can come together to create millions of pounds of investment for low-carbon projects and help fast track London towards our goal of becoming a zero-carbon city by 2050.”
The move follows a recent report from the government-appointed Green Finance Taskforce. It found that many businesses and public sector organisations such as hospitals, museums, offices, libraries, social housing, and universities, are often unable to access the finance needed to install energy efficient measures. Implementing these would boost the energy efficiency of their buildings and deliver long-term savings.
Amber Infrastructure Group is now welcoming applications for funding.
Joanne Patrick, MEEF Director at Amber Infrastructure Group, said: “It’s a key part of the mayor’s strategy to improve the capital’s existing building stock and improve the energy performance of new buildings – helping homes, businesses and public buildings to use less energy and save money on energy bills.”
The new fund builds on the mayor’s London Energy Efficiency Fund (LEEF), which has injected £350m into eight major projects since 2011. These have reduced carbon emissions by over 35,000 tonnes – equivalent to taking 32,000 cars off the road.
Philip Bazin, Environment Team Manager at Triodos Bank UK, said he was delighted to be involved in the fund.
He said: “We have over 20 years of specialist experience helping organisations to get renewable energy projects up and running to produce clean energy. Energy efficiency measures are also crucial to help us hit our climate change and city clean air goals.”
The fund marks a recent surge in energy efficiency funds available for retail investors to support. This week a Somerset community energy group launched a £4 million green bond to pay off a 36,000-panel solar farm’s debts.
Burnham and Weston’s 9.3MW community solar farm, which has been in operation for nearly two years, generates enough renewable electricity to power the equivalent of more than 2,000 homes. It generates around £1 million per year in revenue.
The investment will allow the company to return around £3 million in surplus profits to the local community over the remaining 23-year lifespan of the project.
Half of this will be used to support a new ‘Sunshine Fund’ for local projects. The other half will help households struggling to pay their energy bills to go through a fuel poverty advice service, managed by the Centre for Sustainable Energy.
Jake Burnyeat, Director of Burnham and Weston Energy, said: “The shift from a centralised fossil fuel-based energy system to one based on distributed low carbon and smart technologies creates the opportunity for communities to take back control of their energy systems.
“This can keep money in the local economy and turn energy production into an asset for the local community. In doing so, localities can generate income to help address wider community infrastructure and service needs.”
To develop the bond offer, Burnham and Weston Energy is working with Europe’s leading sustainable bank, Triodos. Triodos recently became the first registered UK bank to launch an investment crowdfunding platform. The bonds are open to anyone that registers on the Triodos platform. They will pay an initial interest rate of 5 per cent a year and will rise every year with inflation. The initial investment will be repaid in instalments over 18 years.
