Energy efficient buildings qualify for cut-rate loans

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Lloyds Banking Group is offering £1bn in cut-rate loans to help improve the energy efficiency of buildings…

Real estate clients looking to improve the energy efficiency of their building will be able to apply for a share of £1bn funding from Lloyds Banking Group.

The cut-rate loan will offer discounts of up to 20 basis points on loans of £10m or more to clients achieving sustainability targets.

The bank will work with environmental consultants Trucost to create a series of benchmarks. These will be used to assess buildings and set targets borrowers must meet to receive the improved loan margin.

Maintaining a top-quartile performance on emissions can also help secure cheaper loans.

Lloyds’ global head of commercial real estate John Feeney said:  “Clients say this is becoming more important.

“They are being asked questions on sustainability by their investors and bondholders. The listed companies are doing a great job but it’s not just them — the private equity guys are saying their limited partners [investors] want the green component,” he said.

The loan scheme would provide “an extra incentive—a club that clients want to join” and would save money in a short period of time.

Some 36 per cent of carbon emissions in the UK are caused by the built environment. As a result, there has been a significant push to improve the efficiency of buildings.

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