A major new loan scheme to support businesses in Wales cut their energy costs by taking steps to become greener and more energy efficient has been launched today by the Welsh Government and Development Bank of Wales.
With the ambition to invest £10 million over the next 3 years, the new Green Business Loan Scheme, which will offer discounted interest rates and flexible repayment dates, will help businesses make improvements allowing them to reduce their carbon footprint, supporting Wales’ journey to become net zero by 2050.
Projects which could be supported by the loans include:
- investing in renewable energy technology;
- improving the fabric of premises and energy efficiencies within the building;
- upgrading systems or machinery to reduce energy use;
- water usage and waste reduction/improvements
While businesses see the benefits in becoming environmentally sustainable, many lack the funds required to make the up-front investment needed. And wider economic circumstances mean many businesses which might have planned decarbonisation work have since had to prioritise other costs, while those who have the resources needed to make such improvements often don’t know the best place best to start.
As well as the new loan, support and advice is also available from the Welsh Government’s Business Wales service to help businesses decarbonise.
Launching the new loan scheme, Economy Minister, Vaughan Gething, said:
Tackling climate change is a priority for the Welsh Government. That’s why we’ve set ambitious plans for Wales to become net zero by 2050.
“Businesses have a crucial role to play if we are to meet our ambition, so we’re proud to work with the Development Bank in supporting Welsh businesses on their decarbonisation journey.
“The economy has suffered in recent months and many businesses won’t have the resources needed to decarbonise. This is especially concerning as energy bills have risen, which highlights just how important Wales’ journey towards becoming a Net Zero nation is.
“We want to ensure businesses have the support needed to make the improvements they want to make – not just through financial backing offered by the Green Business Loan Scheme, but also with practical advice from our Business Wales service.
“I’d encourage any businesses interested in the new scheme to contact the Development Bank for more information.”
Minister for Climate Change, Julie James, said:
The current cost of energy has brought into sharp focus the need to reduce our energy use, be more energy efficient and switch to local, renewable energy sources instead of relying on costly fossil fuels.
“Businesses can be at the heart of our transition to net zero, and we know our business community are keen to take action. This scheme offers the capital funding which small and medium sized businesses often need to make investment decisions.
“The Green Business Loan Scheme can help businesses reduce carbon emissions, manage energy costs and increase business competitiveness.”
The market for ‘green’ loans is new and evolving and the Development Bank will use this pilot to test the market, learning lessons that can inform the operation of the larger funds operated by the bank. Those larger funds such as the Wales Flexible Investment Fund carry the firepower to provide finance at far greater scale.
Chief Executive of the Development Bank of Wales, Giles Thorley, said:
The new Green Business Loan Scheme will help businesses looking to improve energy efficiency and future-proof themselves against rising energy costs.
“We know that sustainability is an increased area of focus for investors, customers and employees – as such, investing in decarbonisation measures is becoming increasingly important for businesses, but few have the initial capital needed to make those changes.
“The new scheme offered by the Development Bank will be provided on a patient capital basis, with payment schedules linked to the payback of improvements made.”
Further information on how to apply is available at Development Bank of Wales: Green Business Loan Scheme.