Greenstone Finance and Aurium Capital Markets have today bought the business and assets of the Green Deal Finance Company (GDFC), the body set up to manage the government’s home energy efficiency scheme.
The deal included the transfer of the GDFC’s existing loan book with a principal value in excess of £43.8m. In July 2015, the government pulled the plug on funding for the Green Deal Finance Company to purchase any further loans, effectively closing the Green Deal to new households.
The new owners also acquired the pay-as-you-save loan administration system, which means loans are repaid as part of a customer’s energy bill. The new private GDFC will commence financing of new Green Deal loans in the first quarter of 2017. There will be no impact on existing Green Deal customers and no need for them to do anything.
David Brent, chairman of the Green Deal Finance Company said: “I and the rest of the board of the GDFC are delighted that, following the announcement by the government in July 2015 of its decision not to provide further funding for the GDFC, we have completed the sale of the company to a buyer who intends to re-activate the GDFC’s pay-as-you-save lending activities. The sale shows the significant value of the pay-as-you-save system the GDFC developed. With the right backing it has the potential to fulfil the environmental and energy efficiency objectives set out by the Government and the GDFC’s other stakeholders when the GDFC was first established.”
Kilian Pender, founder and chief executive of Greenstone Finance, said: ”We believe that the concept of repaying your loan as you save on your energy bills is an excellent one and with the significant private investment that we have secured, we’re looking forward to rolling the Green Deal finance scheme out across the country. We will provide homeowners a cost-effective way to improve their homes and quality of life.”
The acquisition is being supported by Honeycomb Investment Trust, which is managed by Pollen Street Capital.
Under the terms of the deal, GDFC has repaid in full the outstanding £20.2m senior loan facility that had been granted to it by the government. Minister for Energy and Industry, Jesse Norman, said: ”People living in more energy efficient homes can have lower bills and warmer homes, while producing fewer carbon emissions, which is why the Government has committed to improving the insulation of more than one million homes over this Parliament. This deal will help us to reach that goal.”
In April 2016, the National Audit Office concluded the Green Deal had increased costs for energy companies and customers “without any meaningful benefit”. In July 2016, the Public Accounts Committee concluded take up for the government’s loans was “woefully low” because the scheme was not adequately tested. Committee member Caroline Flint MP said it was “not fit for purpose”.
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