Shepherd and Wedderburn has advised the UK Green Investment Bank plc (GIB) in relation to its latest Green Loan to help Stirling Council save £31m over the next 30 years by installing energy saving streetlights.
Stirling Council is borrowing £9.87m from GIB and will install light-emitting diodes (LEDs) instead of traditional sodium lightbulbs in 12,000 streetlights over four financial years.
The council will also replace 4,000 of the columns (or lampposts), marking a major investment in infrastructure for the county.
Stirling is expected to cut its streetlight power consumption by 63% and reduce its greenhouse gas emissions by the equivalent of 14,400 tonnes over the lifetime of the project. The energy saved each year would be equivalent to the total electricity consumed by over 850 homes.
GIB launched its Green Loan for local councils to help them reduce their streetlight electricity bills by up to 80%. The Green Loan offers UK local authorities a low, fixed-rate financial arrangement over a period of up to 30 years. It has been specifically designed to finance public sector energy efficiency projects where repayments are less than the savings realised.
The UK currently spends about £300m a year powering its seven million streetlights, with fewer than one million lamps so far using low-energy LEDs.
Stirling is following in the footsteps of local authorities in Glasgow and Southend-on-Sea, making it the second council in Scotland and the third in the UK to take out a GIB Green Loan to replace its inefficient and costly old street lamps with modern, energy efficient models.
Shepherd and Wedderburn’s Finance and Restructuring team has been involved in all three Green Loan projects signed to date. The firm worked closely with GIB to standardise the Green Loan investment process to save the public sector time and money in agreeing a financing package for energy efficiency projects. It advised GIB in connection with the first Scottish Green Loan pathfinder project with Glasgow City Council in February 2015 and six months later it acted for GIB on the first English Green Loan pathfinder project with Southend-on-Sea Borough Council. Clare Foster, Head of Clean Energy at the firm and who led the Shepherd and Wedderburn team, commented:
“It is enormously satisfying to once again see the successful deployment of the Green Loan. The ‘spend to save’ model, a key component of the Green Loan, is rapidly gaining recognition as a powerful tool in helping local authorities throughout the UK transition to a low carbon economy.
Iain Watson, Director, Energy Efficiency, GIB, said:
“Shepherd and Wedderburn has played a key role in helping us highlight to local authorities the financial and environmental benefits of switching to LED lighting. As well as providing expert legal advice on our Green Loans, its team of specialists worked with us to standardise the process, making it a cost and time effective exercise for councils and GIB.”
Energy Minister Fergus Ewing said:
“This is another good example of investment by the Green Investment Bank in energy efficiency. The Scottish Government has designated energy efficiency as an infrastructure investment priority that looks to build on our track record in renewables in demonstrating the multiple benefits from investing in low carbon infrastructure.”
Scotland Office Minister Andrew Dunlop said:
“This is an excellent initiative and I commend Stirling Council for being part of it. This scheme will deliver a triple-whammy – safe, brightly-lit streets for Stirling, a long-term cash saving for the council and a significant reduction in greenhouse gas emissions in the area.
“Stirling has now joined Glasgow in taking advantage of this opportunity and it is something I hope other Scottish local authorities will look at closely too.”
Edward Northam, Head of Investment Banking, GIB, said:
“Replacing its existing streetlights with more efficient and cost effective alternatives will see Stirling Council make immediate budget savings while contributing to the wider movement to decarbonise our economy. There are signs that more and more local authorities are considering the benefits of the spend-to-save approach, with Stirling becoming the third UK council to opt for a Green Loan.”
About the UK Green Investment Bank
UK Green Investment Bank plc (GIB) was launched in November 2012. With initial 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.