Council house tenants in Dundee, Scotland, will be the first to benefit from a £20 million (EUR 32 million) global loan arrangement concluded by The Co-operative Bank and the European Investment Bank. EIB is the European Union's long-term lending institution.
The money will be used by The Co-operative Bank to help local authorities and housing associations finance small scale energy efficiency schemes designed to reduce costs for those spending disproportionately on home heating bills.
Under the scheme Dundee City Council has agreed a £4.5m deal over the next 18 months to install new energy efficient boilers into 2,500 council homes.
The UK Government-supported Affordable Warmth programme aims at improving the heating standards in over one million households by the end of 2007, reducing excessive household spending on energy, by modernising old and inefficient heating systems. The Affordable Warmth programme is being organised by Transco, the regulated national gas network operator in co-operation with UK Local Authorities, Housing Associations, banks and finance houses.
According to recent government figures, over four million British households suffer fuel poverty, defined as needing to spend over 10% of their income on energy to maintain an adequate standard of warmth. Millions more are close to it.
EIB Vice President Peter Sedgwick said: Many of the projects being targeted by the Co-operative Bank will be located in the UK's regional development areas, a priority for EIB lending. Overall, the energy efficiency investment under the UK's Affordable Warmth initiative will contribute to economic development and the more rational use of energy. Efficiently heated homes will help improve health and living standards, particularly as housing standards in assisted areas tend to be generally poorer. The scheme will also have beneficial spin-offs in terms of job creation and help meet the UK's targets for the reduction of CO2 emissions.
The Co-operative Bank's Chief Executive, Mervyn Pedelty, said: We are delighted to be working with the EIB to support the Government's drive to reduce fuel poverty. The Co-operative Bank is the leading banker to the local authority sector and so perfectly placed to utilise this EIB funding.
The European Investment Bank finances capital investment furthering EU integration, in particular: regional development, trans-European networks in transport, telecoms and energy, industrial competitiveness and integration, small and medium sized enterprises, environmental protection, energy security, and health and education projects. It also operates outside the EU within the framework of the EU's co-operation external policy. Owned by the EU Member States, the EIB raises its funds on capital markets (AAA issuer). In 2001, the EIB lent €37 billion for investment promoting EU objectives both inside and outside the EU (of which over £1.4 billion (€2.3 billion) in the UK). Over the five years 1997-2001, the Bank has lent some £10 billion (€15.6 billion) for projects in the UK.