CEFC finance gives community housing a clean energy boost
10 September 2015
In an Australian-first, not-for-profit community housing provider SGCH and the Clean Energy Finance Corporation have reached an agreement to develop environmentally-friendly social and affordable housing projects.
The CEFC has committed up to $60 million in long-term senior debt to the program which is expected to build over 200 new energy efficient homes, and upgrade a proportion of SGCH’s 4,300 existing, older properties with energy efficient technologies.
The program will enable SGCH tenants to benefit from lower energy costs. At the same time, SGCH will reduce the carbon footprint of its extensive housing portfolio, and strengthen its environmental and sustainability credentials in the NSW community housing sector.
“This initiative will help accelerate the delivery of more sustainable and energy efficient social and community housing,” CEFC CEO Oliver Yates said.
“It is a great demonstration of how we can work in partnership across different sectors to help unlock the multiple environmental, economic and social benefits of greater energy efficiency and renewables, helping make this a wider investment priority.
“The CEFC is able to make finance available over a longer period, allowing the benefits of lower operating costs to be passed on to the tenants. This model will help make such investments more appealing for the housing sector to meet growing needs for more sustainable social housing.”
Mr Yates added: “With an estimated 400,000 social housing households nationwide, it makes good sense to improve energy efficiency and help reduce energy costs for low income households. Providing capital in this cost-effective manner will enable SGCH to better meet changing tenant needs and address maintenance needs and operating costs of existing stock which are issues common across Australian social housing systems.”
According to ACOSS, the lowest income households spend 7 per cent of disposable income on energy, compared to 2.6 per cent for the highest income households. Improvements to lighting, heating and cooling can make a meaningful difference to household energy costs.
“Improving the energy efficiency of low income households in social housing will help improve affordability, climate resilience and create a better living environment for tenants,” Mr Yates said. “People on low incomes are particularly impacted by rising energy prices, but they lack the capital for energy efficiency upgrades and are more likely to own inefficient appliances.”
SGCH Acting CEO, Trevor Wetmore, said the CEFC finance would enable SGCH to build new affordable homes at well above minimum standard in Australia.
CEFC-financed properties will be built to a minimum 4-star Green star rating or a 7-star rating under the Nationwide House Energy Rating Scheme (NatHERS).
“For our tenants who live on low to moderate incomes, the savings they will see in their energy bills can make a real difference,” Mr Wetmore said.
“CEFC’s long term finance of energy efficiency projects will not only improve the lives of social and affordable housing tenants, it will also mean reducing SGCH’s operating costs”.
“The more we can save on energy costs, the more we can reinvest into housing for those most in need,” Mr Wetmore added.
In addition, funding will be allocated to finance sustainability and energy efficiency initiatives that will help some of SGCH’s existing tenants lower their electricity bills.
Mr Yates said that while the CEFC had significant experience in financing commercial property improvements, the program with SGCH was the first of its kind.
“Working with SGCH in this program will demonstrate the potential for a community housing sustainability program that can be implemented in other cities and regional areas,” Mr Yates said.
“As part of this project, SGCH will document the energy efficiencies and green procurement opportunities that were considered and included in the building design to help with the ongoing management of its portfolio. It will in addition help inform the CEFC’s future investment priorities in the sector.”
SGCH is a not-for-profit community housing provider with 30 years’ experience in providing housing assistance to those most in need. Recognised as one of the largest Community Housing Providers in Australia, SGCH houses over 8,300 people in 4,300 homes.
In addition to core housing services, SGCH works in partnership with Government agencies and support partners to provide a range of initiatives to improve the lives of tenants such as training, education, employment and community engagement opportunities.
Media release, 2015