As part of an increased effort to improve infrastructure investment, the government has announced it is willing to underwrite Green Deal schemes. The underwriting will form as part of the government’s Infrastructure Guarantee scheme, which was bough about to aid UK infrastructure projects that are struggling to get financing.
According to the chief secretary to the Treasury Danny Alexander , The Green Deal is the largest ever programme for investing in the energy efficiency of UK housing stock and various methods are currently being explored as to how to the guarantee can ensure that the finances are in place to get the programme off to a very strong start. However, the details of how the guarantees will work, which will be provided to banks and investors, are only expected to be put in place later this year.
The guarantee scheme is designed to underwrite private finance for stalled infrastructure projects. Guarantees will either be in the form of underwriting the construction risk on a project, or underwriting the risk of future revenue streams, with the Treasury estimating it could enable £40bn of construction projects in the existing pipeline to go ahead. The scheme requires primary legislation to proceed, but the government nevertheless expects the first guarantees to be in place by the autumn. Furthermore, the government also announced that it will lend the Green Deal Finance Company (GDFC) £7m to cover its start-up costs.
