AIB launches €100M Energy Efficiency Fund to the Irish SME sector
15th December , 2013

AIB launches €100M Energy Efficiency Fund to the Irish SME sector

Allied Irish Banks (AIB) announced this week the launch of a €100m lending programme to facilitate small and medium sized enterprises (SMEs) to invest in energy-saving projects to reduce their operating costs and improve competitiveness. AIB stated that it would take account of the projected savings from energy efficiency projects when calculating the borrower’s repayment capacity. Qualifying customers can avail of discounted funding supported by the European Investment Bank (EIB).

This week’s announcement was made alongside the publication of an AIB sponsored Amarach Research report on the level of energy efficiency in businesses. The survey was conducted among 451 SMEs in partnership with the Sustainable Energy Authority of Ireland (SEAI) and the Irish Green Building Council.

The findings revealed that SMEs in the manufacturing area are spending, on average, €114,000 on energy bills each year. Retailers spend €50,000 and other businesses spend €70,000. More than 54% of respondents expect those energy costs to rise over the next three years. Over half of the buildings SMEs are operating out of are between 10 and 50 years old, which generally are not energy efficient.

Asked what would encourage them to adopt more energy efficient solutions, over 80% of businesses said grants and incentives, along with a greater understanding of the potential savings would prompt action in this area.

AIB’s director of personal, business and corporate banking Bernard Byrne said energy efficiency is one of the key lending areas on which AIB will now focus. The bank has also confirmed it is making €1bn available to the energy sector over the next three years. “Our policy is informed by substantial market research which identifies clients’ needs, leading us to design a method of costing projected savings from energy efficiency projects into the borrower’s repayment capacity,” he said.

Mr Byrne also commented “It is clear that the economic downturn has prompted businesses to focus on energy savings as a way of cutting costs when revenue growth is slow. On the broader canvas, that in turn should help Ireland achieve its 2020 targets of reducing energy consumption by 20% by 2020.”

“Energy efficiency is a great opportunity for businesses to reduce costs and improve competitiveness. Irish firms that have acted have already saved millions of euros,” said SEAI CEO Dr Brian Motherway. “The rewards are substantial and SEAI is there to assist every step of the way. New finance offerings, like those just launched in December 2013, make it even easier to act and are a welcome addition to the market.”

“AIB’s announcement of a €100m energy efficiency fund will be a huge boost to the industry, a great help for businesses that wish to drive down their costs and will help stimulate job creation in this sector,” said Prof Owen Lewis, chairman of the Irish Green Buildings Council. “The Irish Green Building Council aims to help promote energy efficiency uptake within Ireland and ensure that we have the skills in place to safely deliver the potential savings.”

Among the energy saving opportunities for SMEs to invest in to substantially reduce energy cost is lighting, enabled mainly by compelling advances in LED Lighting technology in recent years.

Peter English, Managing Director, LEDVISTA Lighting Limited

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