EIB Group support new low-cost home energy upgrade scheme in Ireland
Ireland and the European Investment Bank (EIB) today reached an agreement that paves the way for government-backed, low-interest home energy upgrade loans. The agreement marks a major milestone in the development of the loan scheme which will be underpinned by resources from the EIB Group.
Signed by the Minister for the Environment, Climate and Communications, Eamon Ryan TD; the Minister for Finance, Michael McGrath TD; and Dr. Werner Hoyer, President of the EIB, the €500 million scheme is the first of its kind for both Ireland and the EIB Group. It will play a crucial role in helping homeowners to invest in energy efficiency, making their homes warmer, cheaper to run and helping to lower emissions. Homeowners will be able to borrow from €5,000 to €75,000 on an unsecured basis for a term of up to 10 years. The interest rates will be significantly lower than those currently available on the market as a result of the combination of the EIB Group loan guarantee and a government-funded interest rate subsidy.
The loans can be used for comprehensive energy efficiency and renewable energy upgrades where those works are also being grant-aided by the Sustainable Energy Authority of Ireland (SEAI). The loans will help reduce the financial challenges for many homeowners, making home energy upgrades more accessible and affordable.
The scheme will be delivered by the Strategic Banking Corporation of Ireland (SCBI), which will shortly be announcing an open call inviting lenders to participate in the scheme. Homeowners will be able to apply for the loans by early next year through participating retail lenders. Further details on the eligibility rules and other operational aspects of the scheme will be available at that point.
These loans can be used by people who want to undertake a deep-retrofit or who might prefer to undertake individual measures, for example, external wall insulation or the installation of a heat pump. Those most at risk of energy poverty can continue to avail of fully funded energy upgrades under the Warmer Homes Scheme. The availability of low-cost loans will enhance the ability of those above the eligibility threshold but without the means to fund the retrofits themselves, to upgrade their homes.
Speaking at the meeting, Minister Ryan said: “This highly innovative scheme is a first of its kind for both Ireland and the EIB Group. The introduction of these low-cost loans will complement our existing suite of SEAI grants and will help to make retrofits more accessible and affordable for homeowners across the country. We’re seeing the transformation of homes happening already. Retrofitting numbers are on track this year to eclipse our targets and now with this loan we hope that the numbers will continue to go only one way — and that’s up.
“We have designed the loans with the needs of homeowners in mind. Access will be simple and speedy with an emphasis on reducing the administrative burden on homeowners accessing both loans and grants. This means that householders can concentrate more on making their homes warmer and more economical, not on the paperwork.”
Minister for Finance, Michael McGrath said: “Home retrofits are a critical component in achieving our ambitious climate action targets. The Home Energy Upgrade Loan Scheme is an important collaboration between the Government and public and private financial institutions, creating a novel scheme of a €500 million loan guarantee and an interest rate subsidy which has the potential to stimulate the level of retrofit activity needed by making affordable products available to homeowners and small landlords. “I welcome that the Strategic Banking Corporation of Ireland will deliver the scheme, through participating on-lenders. I look forward to it building on the successes of other schemes to date which have supported SMEs across Ireland.
“In addition to the work and commitments by officials in my own department, I wish to acknowledge the substantial efforts undertaken by the Department of the Environment, Climate and Communications, the Strategic Banking Corporation of Ireland and the European Investment Bank and European Investment Fund to develop this novel scheme which demonstrates the EIB and EIF’s commitment to financing innovative instruments for climate action. I also welcome this investment by the bank that demonstrates its successful engagement with Ireland across a range of key areas for the economy and our future.”
Werner Hoyer, President of the EIB, said: “The European Investment Bank and the European Investment Fund are pleased to join forces with Irish partners to support much needed energy efficiency investments that will reduce emissions as well as energy bills for households. This is a win-win for homeowners and the planet.”
June Butler, CEO of SBCI, said: “The signing of today’s agreement between the Department of the Environment, Climate and Communications and the EIB Group demonstrates the Government and EIB’s shared commitment to supporting the delivery of low-cost, long-term finance for energy upgrades in homes — an essential step in encouraging homeowners to make these investments and reduce their emissions.
“We look forward to working with qualifying lenders to distribute loans to homeowners through this scheme. The Government and the EU are committing significant resources to this initiative, and our role in the SBCI is to channel these resources into attractive and accessible finance for homeowners that would not otherwise be available to them.”
William Walsh, CEO of SEAI, said: “We at the Sustainable Energy Authority of Ireland [SEAI] are delighted to be a part of this major Government initiative. The Home Energy Upgrade Loan Scheme will help homeowners access low-interest finance and, when combined with the significant SEAI government grants available for upgrades, it will allow more homeowners to make their homes more energy efficient.
“This first of its kind scheme will help homeowners improve comfort, reduce energy costs and lower carbon emission, helping us reach our climate targets and paving the way for a fossil-free future.”
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