More local councils have joined the Better Building Finance (BBF) environmental upgrade program to fund key sustainability initiatives in the private sector that pay off economically and environmentally.
Waverley, Frankston and Light Regional are the latest to sign up, and will work with BBF to deliver environmental upgrade finance for private industry.
“This program is a fantastic initiative for our environment and for our businesses, with massive savings potential for both landlords and tenants, which is why we were happy to jump on board and deliver it,” Frankston mayor Kris Bolam said.
BBF was established by the City of Melbourne in 2015 and is now engaged with close to 50 councils in Victoria, roughly 10 in NSW and a handful of others across Australia.
Funding comes from partner organisation the Sustainable Australia Fund, or other lenders, with council acting as facilitator to secure favourable loan terms for businesses.
Projects are predominantly solar and energy efficiency upgrades, which account for roughly two thirds of total and many are cashflow positive from day one.
“We can realise new avenues of investment that not only deliver more sustainable buildings and revitalised heritage buildings, but also enhance private sector business outcomes through reduced utility costs and enhanced sustainability credentials,” said Simon Sherriff, manager of strategic projects and acting general manager of economic development at South Australia’s Light Regional council.
Executive manager Ed Cotter took over the Melbourne-based organisation last year which as of July had overseen $36 million worth of Environmental Upgrade Agreements (EUA), saving an estimated 585,776 million tonnes of CO2e.
“EUA’s are the only finance mechanism that is legislated to drive an environmental benefit. There’s not another product out there that is actually written into legislation,” Mr Cotter said.
He said that some councils in NSW were choosing to implement EUAs independently, but those that went with the BBF saw far better outcomes.
“What we’re seeing is that those counsellors that do engage with us, they’re seeing substantial shifts in the numbers coming through,” he said.
“That’s because we’ve got the experience behind us and we know the process. We also provide assurances to both counsel and the businesses that we’re able to manage expectations at either end.”
Key to that is ensuring projects comply with legislation and meet eligibility requirements, and helping businesses navigate the application process that can get held up at various stages of council.
The organisation has also introduced a new billing platform to assist councils with the issuing of notices and collection of repayments, which previously councils had to do themselves.
When the BBF was established it was predominantly aimed at the “big end of town” Mr Cotter explained, but now largely caters to SMEs as well.
“What we see is that close to 80 per cent of the portfolio are for projects that are valued at under $200,000, which is really interesting. So we we’re seeing small and medium sized businesses pick up the loans and use them a lot more.”
Mr Cotter said there was also talk of expanding programs to residential which would involve far greater volumes of projects with less value, which made decision makers hesitant but was also
“You don’t want to overwhelm your rates and finance team and if you suddenly have 100 applications coming through, that’s going to be quite a quite a number to deal with,” he said.
“So we’re still trying to get our head around how councils will deal with residential — our advice at the moment is wait and see.”
He added the organisation was looking to attract even more investors and financiers by getting EUAs recognised under the Climate Bonds certification scheme.