Southend-on-Sea Borough Council has become the first local authority in England to secure finance from the UK Green Investment Bank plc (GIB) to replace its existing street lights with lower energy alternatives.
GIB will provide funding of £8.2m alongside a grant of £5.1m from the Department for Transport (DfT) as part of a £13.5m programme of refurbishments that will see 14,000 lanterns and around 4,000 other pieces of illuminated street furniture, replaced with energy-saving LED alternatives.
The council believes that the installation of LED street lighting will pay for itself through savings of around £25m over 25 years, with the new LED lights using 55 per cent less energy than the existing stock
The programme qualified for the GIB’s Green Loan, which offers UK local authorities a low, fixed-rate loan over a period of up to 30 years. The Green Loan has been specifically designed to finance energy efficiency projects with repayments made from savings made on energy consumption.
GIB signed a similar agreement earlier this year with Glasgow City Council and is in discussions with a number of other local authorities and public bodies about financing further street lighting and low carbon and renewables projects.
Iain Watson, Director in the Energy Efficiency Team at GIB, commented:
“The standardisation of the Green Loan legal documentation carried out by Shepherd and Wedderburn makes securing financing for vital energy efficiency projects easier and more time and cost effective for public sector organisations. That and the firm’s work as an advisor proved invaluable in reaching our agreement with Southend-on-Sea Borough Council.”
Finance and Restructuring Partner, Clare Foster who led the Shepherd and Wedderburn team on both the Southend-on-Sea and Glasgow street lighting projects, said:
“We were delighted to work once again with the GIB team on the first Green Loan to be deployed in England. The "spend to save" model which is a key component of the Green Loan, is a powerful tool to help the transition to a low carbon economy and I believe that the Southend -on- Sea project will serve as a beacon to other councils in their approach to low carbon initiatives."
About the UK Green Investment Bank
UK Green Investment Bank plc (GIB) was launched in November 2012. With £3.8bn of funding from the UK Government, it is the first bank of its kind in the world. It is a “for profit” bank, whose mission is to accelerate the UK’s transition to a greener economy, and to create an enduring institution, operating independently of Government.
GIB is wholly owned by HM Government. The Company is not authorised or regulated by the Financial Conduct Authority or the Prudential Regulation Authority. A wholly owned subsidiary UK Green Investment Bank Financial Services Limited, is authorised and regulated by the Financial Conduct Authority.