Mayor announces expert team to help public buildings access retrofitting programmes and finance
Hundreds of public buildings in London including schools, libraries and hospitals are set to get a green makeover, with low cost loans from a new £100 million fund, the Mayor announced today.
London's public buildings are responsible for 10 per cent of the capital's carbon emissions. Retrofitting these buildings with energy reduction measures will not only cut fuel bills and emissions, it is also a valuable investment opportunity estimated to be worth billions to the London economy, which will create jobs and help develop skills.
Flexible finance available from the fund will pay for measures including efficient lighting systems, ventilation and boiler upgrades, smart meters and solar panels. Returns on initial investments are made through resulting energy savings. The Mayor also revealed that a team of experts will be available to help speed public buildings through retrofitting programmes.
This is part of the Mayor's overall plan to retrofit London's buildings which are responsible for 80 per cent of carbon emissions. Retrofitting is a win-win for Londoners as it delivers value for money through the more efficient use of energy resulting in reduced energy costs and it significantly contributes to the Mayor's ambitious carbon reduction targets.
The Mayor of London, Boris Johnson, said: 'Retrofitting London is a priority as not only will it cut carbon and energy costs, but also inject billions of pounds into the city's economy, and create tens of thousands of jobs.
'This multi-million pound fund will assist in improving the efficiency of the capital's public buildings. It is a great example of the type of innovative thinking that will stimulate green economic growth for the capital while also saving taxpayers’ money on energy bills.'
The Mayor has agreed a £50 million contribution from the London Green Fund to set up this new fund, which will be known as the London Energy Efficiency Fund (LEEF). LEEF will be led by Amber Infrastructure Limited, a leading sponsor and manager of social and economic infrastructure projects. Amber has already expanded the fund's value with upfront commitments for £50 million from RBS and the company is expected to leverage in further amounts over the life of the project. Amber will also work with Arup, that will act as a technical adviser. To further enhance the attractiveness of the LEEF, RBS are currently negotiating a facility with the European Investment Bank which will allow their commitment to be provided at a more beneficial rate.
It is anticipated that many of the projects to be funded will use the Mayor's RE:FIT programme model, which has already saved one million pounds a year from the energy bills of 42 public buildings in the Greater London Authority group including fire stations, police stations and Transport for London offices. RE:FIT is pioneering and award-winning, and is being adopted across the UK as well as attracting interest from around the world. Buildings that have taken up scheme have seen their energy efficiency improved by as much as 40 per cent. The Mayor's RE:FIT programme is about to significantly ramp up following the selection of Turner & Townsend, supported by PA Consulting Group as preferred bidder to run a RE:FIT programme delivery unit to support hundreds more organisations through the process including building and carbon assessment, securing funding, procurement and implementation. This team will be in place for three years, predominantly funded through the European Investment Bank managed ELENA (European Local Energy Assistance) facility totalling £2.67million.
The London Green Fund is a trailblazing initiative led by the Mayor of London and managed by the European Investment Bank, that combines European Regional Development Funds, public and private finance to invest in environmental infrastructure. Earlier this year the Mayor launched a £70million waste fund under the same scheme. Collectively these funds are set to issue hundreds of millions of pounds of investment for low carbon projects.
The London Green Fund is financed by contributions from the London Development Agency, the London Waste and Recycling Board and the Joint European Support for Sustainable Investment in City Areas (JESSICA) initiative that was developed by the European Commission and European Investment Bank.
European Investment Bank Vice President, Simon Brooks, said: 'We are delighted to have finalised negotiations with Amber as the second "sub-fund" manager for the London Green Fund's energy efficiency component. In addition, we are also evaluating the possibility of providing EIB low cost funding to RBS which they can on-lend to the fund. Combining funding from the London Green Fund with private sector funding in this way will provide local authorities and other eligible borrowers with cheap funding to green their buildings and contribute to the UK and EU energy efficiency and carbon reduction targets.'
Leo Bedford, Programme Director for Amber, commented: 'We're delighted to be working alongside our consortium partners on a project that will be pivotal for London's 2020 carbon emissions programme. Our unrivalled public sector partnerships and experience in managing a JESSICA fund provides us with a unique platform to ensure both the long-term energy efficiency goals and public saving objectives are met.'
Chris Fallis Head of Public Sector, Structured Finance for RBS, said: 'RBS are delighted to be supporting Amber Infrastructure with the London Energy Efficiency Fund, which will allow public sector bodies within London to access financing for energy efficiency programmes, facilitating a reduction of the carbon footprint across the capital.
'RBS has extensive public sector experience and coupled with Amber's fund and project management experience and Arup's technical expertise, provides a unique partnership to deliver this vital programme.'
Malcolm Ball, Director at Arup, commented: 'Arup is proud to be a key advisor for the first energy efficiency fund in the UK. The London Energy Efficiency Fund is an exciting project and one which aligns with Arup's vision to accelerate building retrofit and contribute to a low carbon economy.'
The London Green Fund forms one of the initiatives the Mayor has introduced to harness the opportunities coming from a low carbon economy - other projects to 'retrofit London' are cutting emissions from homes and transport. For example, the Mayor's RE:NEW programme recently expanded to all boroughs and is set to offer 55,000 homes a carbon makeover by May 2012.
London is well placed to become a world leader in both low carbon financing and in the creation of new jobs, skills and enterprise to cash in on the need to become more energy efficient. An Ernst and Young report commissioned by the Mayor shows that if London can secure just one per cent of forecast global spend on low carbon goods and services, then it could deliver nearly £4 billion annually to our economy through to 2025.
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