The Green Deal Finance Company (GDFC) has revealed plans to raise £5 million by launching a new retail bond offered via the peer-to-peer finance platform Abundance Investment.
The money will be used to upgrade the company’s operational infrastructure. The announcement comes as it prepares to begin offering new loans shortly.
The GDFC and its existing loan book were bought in January by a consortium made up of Aurium Capital Markets and Greenstone Finance for £40 million.
The firm is initially planning to relaunch the Green Deal scheme with a small number of thoroughly vetted installers to ensure customers receive a high-quality service, before widening the pool. It also intends to expand the energy efficiency scheme over time to cover financing for technologies such as solar panels and storage.
“The Green Deal was established by the government to give homeowners an opportunity to invest in their homes and make them more comfortable to live in, whilst also making them more energy efficient,” said GDFC chief executive and founder of Greenstone Finance, Killian Pender.
“Our latest fund raise through Abundance gives a broader set of retail investors the opportunity to invest in the GDFC, allowing us to accelerate the roll-out of the business and therefore making a greater positive impact on the environment sooner.”
Abundance co-founder and joint managing director Bruce Davis said: “Both companies are focused on the win-win scenario of enabling ordinary people to do something positive for the environment while benefitting financially.
“Improving the energy efficiency of the UK’s housing stock comes top of the energy hierarchy, making a real difference to the UK’s contribution to mitigating global climate change.”
The Green Deal was launched in 2013 to help improve the thermal efficiency of UK homes, which are amongst the most poorly insulated in Europe.
The scheme enabled customers to borrow money for home improvements and then repay the loans using the savings from future energy bills. The loans are tied to the properties, meaning the payments are made by whoever is benefitting from the energy saving measures.
The Green Deal Finance Company was established as a not-for-profit company to support the Green Deal scheme by buying up loans from providers. The scheme was effectively suspended in 2015 after the government announced it was cutting off funding.