The alliance between the two will utilise SGEF’s strong track record in equipment financing with additional capital and expertise from the GIB. This will help public and private sector organisations to reduce their energy costs and greenhouse gas emissions by eliminating the need to fund projects upfront. Suitable projects could include combined heat and power (CHP) plants, boilers, building retrofitting, lighting and energy reduction technologies.
The first project to benefit from the GIB-SGEF partnership will be Rampton Hospital, run by Nottinghamshire Healthcare. A £5 million investment will finance the installation of a CHP plant, dual fuel boilers, biomass boilers and an effluent treatment plant.
“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” said Shaun Kingsbury, chief executive, UK Green Investment Bank. “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 while energy and technical services provider Cofely will design and install the equipment, including making the initial £5 million investment. GIB-SGEF will then reimburse Cofely on completion of the installation. Nottinghamshire Healthcare will then pay the cost back over a 15-year period. The ‘spend to save’ model will ensure that the savings from the energy efficiency measures will exceed the cost of the repayments and this method will also be used for other projects financed by the alliance.
The project will save an estimated £1.7 million and will also offset 88,000 tonnes of carbon dioxide equivalent over the lifetime of the project. The installation will also generate around 5000 MWh per annum of renewable heat while the effluent plant will improve wastewater quality and energy efficiency.
“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” said Health Minister Norman Lamb.
Giles Turner, Managing Director of SGEF UK, added that the Rampton Project demonstrated SGEF’s successful strategy of working with market leading service providers and that SGEF is looking forward to supporting UK investment in energy efficient measures, alongside UK GIB, particularly with regard to NHS and industrial customers.
For additional information:
UK Green Investment Bank (GIB)
Societe Generale Equipment Finance (SGEF)