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Home Upgrade Loans

New retrofitting loan scheme agreed by Government and EU Investment Bank to roll out next year

Homeowners will be able to borrow from €5,000 to €75,000 on an unsecured basis for a term of up to 10 years under the scheme.

THE GOVERNMENT AND the European Investment Bank (EIB) Group have reached an agreement that “paves the way for Government-backed, low-interest home energy upgrade loans”. 

It “marks a major milestone in the development of the loan scheme which will be underpinned by resources from the EIB Group,” a statement read. 

The agreement was signed by Minister for the Environment, Climate and Communications, Eamon Ryan, Minister for Finance, Michael McGrath and Dr Werner Hoyer, President of the European Investment Bank.

The €500 million scheme is the first of its kind for both Ireland and the EIB Group, the statement said. 

“It will play a crucial role in helping homeowners to invest in energy efficiency, making their homes warmer, cheaper to run and helping to lower emissions.” 

Homeowners will be able to borrow from €5,000 to €75,000 on an unsecured basis for a term of up to 10 years under the scheme.

The interest rates will be “significantly lower” than those currently available on the market as a result of the combination of the EIB Group loan guarantee and a Government-funded interest rate subsidy.

The loans can be used for comprehensive energy efficiency and renewable energy upgrades where those works are also being grant-aided by the Sustainable Energy Authority of Ireland (SEAI).

“The loans will help reduce the financial challenges for many homeowners, making home energy upgrades more accessible and affordable,” the statement said.

The scheme will be delivered by the Strategic Banking Corporation of Ireland (SCBI), which will shortly be announcing an open call inviting lenders to participate in the scheme, the Government said. 

Homeowners will be able to apply for the loans by early next year through participating retail lenders. Further details on the eligibility rules and other operational aspects of the scheme will be available from then. 

These loans can be used by people who want to undertake a deep-retrofit or who might prefer to undertake individual measures, for example, external wall insulation or the installation of a heat pump.

“Those most at risk of energy poverty can continue to avail of fully funded energy upgrades under the Warmer Homes Scheme. The availability of low-cost loans will enhance the ability of those above the eligibility threshold but without the means to fund the retrofits themselves, to upgrade their homes.”

Speaking at the meeting, Ryan said:

“This highly innovative scheme is a first of its kind for both Ireland and the EIB Group. The introduction of these low-cost loans will complement our existing suite of SEAI grants and will help to make retrofits more accessible and affordable for homeowners across the country.

“We’re seeing the transformation of homes happening already. Retrofitting numbers are on track this year to eclipse our targets and now with this loan we hope that the numbers will continue to go only one way — and that’s up.

“We have designed the loans with the needs of homeowners in mind. Access will be simple and speedy with an emphasis on reducing the administrative burden on homeowners accessing both loans and grants. This means that householders can concentrate more on making their homes warmer and more economical, not on the paperwork.”

Minister for Finance Michael McGrath described the scheme as “novel”, saying: 

“Home retrofits are a critical component in achieving our ambitious climate action targets. The Home Energy Upgrade Loan Scheme is an important collaboration between the Government and public and private financial institutions, creating a novel scheme of a €500 million loan guarantee and an interest rate subsidy which has the potential to stimulate the level of retrofit activity needed by making affordable products available to homeowners and small landlords.”

Werner Hoyer, President of the European Investment Bank, called the collaboration a “win-win”.

“The European Investment Bank and the European Investment Fund are pleased to join forces with Irish partners to support much needed energy efficiency investments that will reduce emissions as well as energy bills for households. This is a win-win for homeowners and the planet,” he said. 

CEO of SBCI June Butler said the agreement “demonstrates the Government and EIB’s shared commitment to supporting the delivery of low-cost, long-term finance for energy upgrades in homes — an essential step in encouraging homeowners to make these investments and reduce their emissions”. 

William Walsh, CEO of SEAI, said his organisation was “delighted” to be a part of the scheme and that it would “help homeowners access low-interest finance and… allow more homeowners to make their homes more energy efficient.”

As The Journal reported in September, the number of government-funded home retrofits carried out in the first half of this year is 150% above the same period last year, according to figures from the SEAI.

That report said there were 21,727 home energy upgrades funded by government grants to the SEAI in the first six months of this year, which means retrofitting figures are on track to meet the target of 37,000 upgrades this year.

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