The Edinburgh-based bank is providing funding of £8.2m alongside a grant of £5.1m from the Department for Transport as part of a £13.5m programme of refurbishments that will see 14,000 lanterns and around 4,000 other pieces of illuminated street furniture, replaced with energy-saving LED alternatives.
The council believes that the installation of LED street lighting will pay for itself through savings of around £25m over 25 years, with the new LED lights using 55% less energy than the existing stock
The programme qualified for the GIB’s Green Loan, which offers UK local authorities a low, fixed-rate loan over a period of up to 30 years. The Green Loan has been specifically designed to finance energy efficiency projects with repayments made from savings made on energy consumption.
Green Investment Bank signed a similar agreement earlier this year with Glasgow Council. It is in discussions with a number of other local authorities and public bodies about financing further street lighting and low carbon and renewables projects.
Iain Watson, Director, Energy Efficiency Team at GIB, commented: “The standardisation of the Green Loan legal documentation carried out by Shepherd and Wedderburn makes securing financing for vital energy efficiency projects easier and more time and cost effective for public sector organisations. That and the firm’s work as an advisor proved invaluable in reaching our agreement with the council.”
Finance and Restructuring Partner, Clare Foster who led the Shepherd and Wedderburn team on both the Southend and Glasgow street lighting projects, commented:
“We were delighted to work once again with the GIB team on the first Green Loan to be deployed in England. The “spend to save” model which is a key component of the Green Loan, is a powerful tool to help the transition to a low carbon economy and I believe that the Southend project will serve as a beacon to other councils in their approach to low carbon initiatives.”