The Royal Bank of Scotland lent more than £1 billion to support UK customers’ sustainable energy projects in 2015 – more than doubling lending from 2014 in a third consecutive year of growth for the sector.
The record £1 billion confirms the Royal Bank’s position as the largest lender to the UK renewable energy sector and comes as the bank ramps up support for all businesses, from SMEs to large corporates, looking to become more energy efficient.
The rise in lending to renewable energy projects was driven by significant increases to both solar and biomass projects, with lending to solar more than trebling to over £450 million compared to 2014.
The bank claims to have been at the forefront of the UK solar market since its inception in 2010 and- in addition to direct lending over that period – it has arranged financing for £550 million worth of solar projects.
The increase in lending to biomass – from less than £50 million in 2014 to more than £150 million in 2015 – was largely driven by Lombard, the bank’s asset finance lender. Lombard’s focus on renewable energy projects led to a change in policy last year enabling the lender to use the asset and resulting revenue as security against lending for these projects as an alternative to cash or land, granting greater cash efficiency to customers.
Alison Rose, Chief Executive of Commercial and Private Banking at the Royal Bank, said: “This lending demonstrates our unwavering commitment to the low carbon economy and the jobs, businesses and communities that rely on it. It also highlights British businesses’ appetite for investing in renewable energy projects.”
At the same time, the taxpayer-rescued bank is scaling back its lending to fossil-fuel-based energy companies – a move possibly driven in part to repair its fractured corporate reputation.
The bank’s global exposure to the oil and gas sector in 2015 fell 70% compared with 2014, down from £22bn to £6.6bn, with exposure to mining and metals, which includes coal, also falling, from £4.7bn to £2.1bn.
A bank spokesman added: “We are supporting customers in carbon-intensive industries to diversify and move away from the most high-impact activities. We will work with them to try and achieve this, but where the impacts are too high, we have proved we are prepared to withdraw our support.”