Scheme to cut energy costs of Welsh businesses launched today

A major new loan scheme to support businesses in Wales and cut their energy costs has been launched today by the Welsh Government and Development Bank of Wales.

The project which will help businesses save money by taking steps to become greener and more energy efficient aims to invest £10m over the next 3 years.

The new Green Business Loan Scheme will offer discounted interest rates and flexible repayment dates and 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 energy efficiencies within the building, upgrading systems or machinery to reduce energy use and improving water usage and waste reduction.

While businesses see the benefits in becoming environmentally sustainable, many lack the funds required to make the up-front investment needed.

Wider economic circumstances mean many businesses which might have planned decarbonisation work have since had to prioritise other costs.

The Welsh Government has also announced support and advice will be made available to help businesses decarbonise.

Ambitious

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.”

The minister encouraged any businesses interested in the 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.”

As 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.

Chief Executive of the Development Bank of Wales, Giles Thorley, said: “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.”