Mayor’s £100m+ boost to green London’s public buildings

• Mayor announces expert team to help public buildings access retrofitting programmes and finance  

Hundreds of public buildings in London including schools, libraries and hospitals are set to get a green makeover, with low cost loans from a new £100 million fund, the Mayor announced today.

London's public buildings are responsible for 10 per cent of the capital's carbon emissions. Retrofitting these buildings with energy reduction measures will not only cut fuel bills and emissions, it is also a valuable investment opportunity estimated to be worth billions to the London economy, which will create jobs and help develop skills.

Flexible finance available from the fund will pay for measures including efficient lighting systems, ventilation and boiler upgrades, smart meters and solar panels. Returns on initial investments are made through resulting energy savings. The Mayor also revealed that a team of experts will be available to help speed public buildings through retrofitting programmes.

This is part of the Mayor's overall plan to retrofit London's buildings which are responsible for 80 per cent of carbon emissions. Retrofitting is a win-win for Londoners as it delivers value for money through the more efficient use of energy resulting in reduced energy costs and it significantly contributes to the Mayor's ambitious carbon reduction targets.

The Mayor of London, Boris Johnson, said: 'Retrofitting London is a priority as not only will it cut carbon and energy costs, but also inject billions of pounds into the city's economy, and create tens of thousands of jobs.;

'This multi-million pound fund will assist in improving the efficiency of the capital's public buildings. It is a great example of the type of innovative thinking that will stimulate green economic growth for the capital while also saving taxpayers’ money on energy bills.'

The Mayor has agreed a £50 million contribution from the London Green Fund to set up this new fund, which will be known as the London Energy Efficiency Fund (LEEF). LEEF will be led by Amber Infrastructure Limited, a leading sponsor and manager of social and economic infrastructure projects. Amber has already expanded the fund's value with upfront commitments for £50 million from RBS and the company is expected to leverage in further amounts over the life of the project. Amber will also work with Arup, that will act as a technical adviser. To further enhance the attractiveness of the LEEF, RBS are currently negotiating a facility with the European Investment Bank which will allow their commitment to be provided at a more beneficial rate.

It is anticipated that many of the projects to be funded will use the Mayor's RE:FIT programme model, which has already saved one million pounds a year from the energy bills of 42 public buildings in the Greater London Authority group including fire stations, police stations and Transport for London offices. RE:FIT is pioneering and award-winning, and is being adopted across the UK as well as attracting interest from around the world. Buildings that have taken up scheme have seen their energy efficiency improved by as much as 40 per cent. The Mayor's RE:FIT programme is about to significantly ramp up following the selection of Turner & Townsend, supported by PA Consulting Group as preferred bidder to run a RE:FIT programme delivery unit to support hundreds more organisations through the process including building and carbon assessment, securing funding, procurement and implementation. This team will be in place for three years, predominantly funded through the European Investment Bank managed ELENA  (European Local Energy Assistance) facility totalling £2.67million.

The London Green Fund is a trailblazing initiative led by the Mayor of London and managed by the European Investment Bank, that combines European Regional Development Funds, public and private finance to invest in environmental infrastructure. Earlier this year the Mayor launched a £70million waste fund under the same scheme. Collectively these funds are set to issue hundreds of millions of pounds of investment for low carbon projects.

The London Green Fund is financed by contributions from the London Development Agency, the London Waste and Recycling Board and the Joint European Support for Sustainable Investment in City Areas (JESSICA) initiative that was developed by the European Commission and European Investment Bank.

European Investment Bank Vice President, Simon Brooks, said: 'We are delighted to have finalised negotiations with Amber as the second "sub-fund" manager for the London Green Fund's energy efficiency component. In addition, we are also evaluating the possibility of providing EIB low cost funding to RBS which they can on-lend to the fund. Combining funding from the London Green Fund with private sector funding in this way will provide local authorities and other eligible borrowers with cheap funding to green their buildings and contribute to the UK and EU energy efficiency and carbon reduction targets.'

Leo Bedford, Programme Director for Amber, commented: 'We're delighted to be working alongside our consortium partners on a project that will be pivotal for London's 2020 carbon emissions programme. Our unrivalled public sector partnerships and experience in managing a JESSICA fund provides us with a unique platform to ensure both the long-term energy efficiency goals and public saving objectives are met.'

Chris Fallis Head of Public Sector, Structured Finance for RBS, said: 'RBS are delighted to be supporting Amber Infrastructure with the London Energy Efficiency Fund, which will allow public sector bodies within London to access financing for energy efficiency programmes, facilitating a reduction of the carbon footprint across the capital.

'RBS has extensive public sector experience and coupled with Amber's fund and project management experience and Arup's technical expertise, provides a unique partnership to deliver this vital programme.'

Malcolm Ball, Director at Arup, commented: 'Arup is proud to be a key advisor for the first energy efficiency fund in the UK. The London Energy Efficiency Fund is an exciting project and one which aligns with Arup's vision to accelerate building retrofit and contribute to a low carbon economy.'

The London Green Fund forms one of the initiatives the Mayor has introduced to harness the opportunities coming from a low carbon economy - other projects to 'retrofit London' are cutting emissions from homes and transport. For example, the Mayor's RE:NEW programme recently expanded to all boroughs and is set to offer 55,000 homes a carbon makeover by May 2012.

London is well placed to become a world leader in both low carbon financing and in the creation of new jobs, skills and enterprise to cash in on the need to become more energy efficient. An Ernst and Young report commissioned by the Mayor shows that if London can secure just one per cent of forecast global spend on low carbon goods and services, then it could deliver nearly £4 billion annually to our economy through to 2025.

Ends

Notes to editors:

• Since its inception, RE:FIT has been supported by the Clinton Climate Initiative (CCI) Cities Program, which is now a fully integrated partner with the C40 Cities Climate Leadership Group (C40). CCI and C40 worked closely with the GLA on the development of RE:FIT and encouraging building owners to commit to using the framework.   

Rohit T. Aggarwala, Special Advisor to the Chair, C40 Cities said: “Based on our experience helping cities around the world, including London, to develop and deliver impactful building energy efficiency programmes, we realise that that access to usable finance is one of the biggest hurdles in enabling projects to break ground. The London Energy Efficiency Fund is a significant step forward in addressing that problem and dramatically reducing energy consumption in buildings across London - continuing to strengthen its position it as one of world’s leading cities for energy efficiency. We look forward to continuing to support London's efforts to further innovative retrofit financing and aim to share the results of the award-winning RE:FIT framework with other C40 cities around the world.”

•  In London, the environmental goods and services sector is worth £23 billion. The carbon finance sector is worth £5.8 billion and employs 22,500 people. Growth between 2008-2010 in this sector has been 8 per cent, comparatively strong in comparison to growth in other sectors. This will deliver an estimated 18,000 new jobs by the end of 2012 to add to the estimated 158,000 already working in this sector.
• London aims to be a world leading low carbon capital by 2025 attracting an estimated £40 billion of investment and creating an estimated 200,000 jobs over coming decades. This will help ensure our competitiveness as a leading global city in the 21st century.
• The London Green Fund is a £100million investment fund comprising of £50 million from the London 2007-13 European Regional Development Fund programme, £32 million from the London Development Agency and £18 million from the London Waste and Recycling Board. It has been designed to promote the development of a thriving low carbon economy in the capital in line with the Mayor of London, Boris Johnson's environmental and economic priorities including the London Plan. It consists of two smaller funds to support waste infrastructure development (managed by Foresight Group with a start-up investment of £35m from the London Green Fund) and energy efficiency projects (managed by Amber with a start-up investment of £50m from the London Green Fund). Repayments back to the fund will be recycled to support even more projects. The fund managers appointed to manage the waste and energy efficiency funds will also be required to leverage in additional money of at least an equivalent amount of London Green Fund monies.
• The London Green Fund has set up under the Joint European Support for Sustainable Investment in City Areas (JESSICA) initiative that was developed by the European Commission and European Investment Bank. It was launched by the Mayor of London October in 2009 and is managed by the European Investment Bank on behalf of the Mayor, the London Development Agency and the London Waste and Recycling Board. The waste and energy efficiency funds will be managed by independent, professional managers who will take sound commercial decisions on which projects are viable for funding.
• RE:FIT is the Mayor of London's innovative scheme that helps public organisations to give their buildings an energy efficiency overhaul - this can include fitting of solar panels, insulation and smart meters. Use of RE:FIT is not mandatory for LEEF funding but the RE:FIT Programme Delivery Unit will help public bodies to select buildings, procure and implement RE:FIT, including bidding for funding from LEEF. The unit is funded using EIB managed ELENA (European Local Energy Assistance) funding of 2.8m Euros over 3 years  (approx £2.4m). The Mayor will also provide an additional 320,000 Euros (£270,000) for the programme.
• Turner and Townsend, supported by PA Consulting Group, are the preferred bidder selected from a recent procurement process to run the RE:FIT Programme Delivery Unit on behalf of the GLA.  Turner and Townsend is a leading global construction consultancy whose experts work with organisations to deliver maximum value from their assets.   Working on many of the world’s largest programmes from our global network of 68 offices, our 2,250 staff shape our industry. We help our clients save money with our programme, project and cost management services. We also provide an integrated suite of management services to deliver assets that improve the performance of our clients’ businesses. Together with our set of specialist asset and property management services, we put passion into applying new ideas throughout the asset life cycle.  PA Consulting Group is a leading management and IT consulting firm. Independent and employee owned, we operate globally in more than 30 countries and transform the performance of major organisations in both the private and public sectors. From initial idea generation and strategy development through to detailed implementation, we deliver significant and tangible results. We have outstanding technology development capability; a unique breadth of skills from strategy to performance improvement, from HR to IT; and strong expertise in communications, media and entertainment, defence, energy, financial services, government and public services, healthcare, manufacturing, transportation and logistics.
• For non-media information on the fund contact: Leo Bedford on +44 (0)20 7939 0573 or Jenny Curtis on  +44 (0)20 7939 0597 or see www.leef.co.uk For non-media information on RE:FIT, contact: Virginie Caujolle-Pradenc at City Hall, on +44 207 983 4239.