New CEO at Green Deal Finance Helm

5th December, 2012

The Green Deal Finance Company (TGDFC) has launched a stakeholder loan offering to members of the company and other organisations to build the first round of capital needed to drive the roll out of Green Deals.

TGDFC is a not-for-dividend company set up to provide low cost financing to households for energy efficiency improvements to their homes. It has 53 members from the public and private sector including energy companies, trade associations, local councils and potential green deal installers. It is seeking to raise 76m from stakeholders as a medium term investment. The stakeholders include all the members of the company and certain other organisations who share the TGDFC's ambition to enable the widest possible installation of energy efficiency measures in households across the UK. A full stakeholder loan information pack is available to all members and stakeholders.

The stakeholder loan will form the bedrock of TGDFC's capital structure, together with initial financing from the Green Investment Bank, and the European Investment Bank. In total TGDFC expects to deliver around 300m of financing for Green Deal Plans before a second round of financing from a wider group of investors in 2014. As part of the proposed financing, the Department of Energy and Climate Change intends to take a 13m participation in the stakeholder loan offering and it will provide guaranteed contingent capital to the company to help underpin its finance rating and lower the cost of finance offered to consumers. The Green Deal Finance Company's first loan applications are anticipated in January 2013.

The Green Deal Finance Company has also announced the appointment of Mark Bayley as Chief Executive Officer. Mark was formerly Chief Executive of London & Continental Railways and he has extensive experience of capital market financings and risk sharing arrangements in major public programmes. Mark has been working with the company since October and played a leading role in structuring the company's initial finance. As Chief Executive, he will also be responsible for leading on both finance, operations and development of demand for the company's financing of Green Deals.

Mark Bayley, Chief Executive Officer, The Green Deal Finance Company, said: "Our members and stakeholders have already demonstrated a strong commitment to making the Green Deal programme work. I am delighted to take on the role of leading the Green Deal Finance Company in financing an ambitious and potentially transformative programme for implementing energy efficiency measures in households across the UK.

"Without The Green Deal Finance Company, Green Deal Providers would expose their own balance sheets to a 10 to 25 year funding requirement or households would have to fund Green Deal investments from personal finance. By aggregating large numbers of individual Green Deal Plans into one large financing requirement, which we can then fund with long term bank finance and in the capital markets, we can cut consumers' borrowing costs. At the same time we can take the administrative burden of servicing Green Deal Plans away from Green Deal Providers, helping to reduce the overall cost to consumers even more."

Paul Davies, PwC adviser to The Green Deal Finance Company, added: "The launch of the stakeholder loan is another significant milestone in the development of the Green Deal Finance Company. With a UK wide remit, it has the potential to build a significant Green Deal Plan portfolio quickly, allowing it to access the capital markets and pass the benefits of long term, low cost financing directly to consumers. It will provide a one-stop-shop to Green Deal Providers on pricing, and will manage the consumer financing side of the Green Deal Plan."

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