A new £33m funding initiative to support residential developers in Wales meet green standards has been revealed.
Funded by the Welsh Government, the Green Homes Incentive is available on residential development loans from the Development Bank of Wales.
Lent via its Wales Property Development and Wales Stalled Sites funds, it includes a reduction in loan repayment fees of up to 2%.
Finance for up to 100% of building costs the funding is available with interest rolled-up throughout the loan term. Eligibility will depend upon qualifying criteria that includes EPC (energy performance certificate) A rating/Passivhaus status, non-concrete structures and non-fossil fuel heating systems.
The operation of buildings accounts for around 30% of emissions in the UK, mainly from heating, cooling and electricity use. For new buildings, the embodied emissions from construction can account for up to half of the carbon impacts associated with the building over its lifecycle.
Developers that install non-fossil fuel heating systems will also be able to benefit from the new incentive as ground and air source heat pumps significantly reduce operational energy demand during the life of a property.
Minister for Climate Change, Julie James said: “Tackling the climate emergency must be at the heart of everything we do in Wales as we all work together across this decade of action.
“The Green Homes Incentive will support SME housebuilders in delivering low carbon homes, part of our journey to a net zero Wales by 2050.
“Finding innovative ways to improve the energy efficiency of new homes will also bring down costs for homeowners which is crucial as we help people through a cost of living crisis.”
Giles Thorley, chief executive of the Development Bank said: “Sustainable business is at the heart of our core principles, so we want to support developers making the change to greener development practices as part of the Team Wales effort to build a stronger, greener economy.
“Our Green Homes Incentive offers reduced lending costs for housing schemes that will help to deliver more thermally efficient and lower carbon homes in Wales. It’s the first of several initiatives as we look to support the journey to net zero with funding that helps forward-thinking companies to address climate change.”
Cenydd Rowlands, property director at the development bank, said: “We are already seeing examples of developers wanting to make the change towards more eco-friendly options particularly given the upcoming changes in building regulations which are likely to impose higher eco-standards across all new schemes.
“We know the importance developers place on certainty of funding. This has become even more important of late given the additional uncertainties around other key elements of development, such as supply availability and material cost inflation. Our dedicated property team is here to help with a quick decision-making process that is designed to get more developers building greener housing as quickly and efficiently as possible.”
