(Bloomberg) -- Britain’s National Wealth Fund, Barclays Plc and Lloyds Banking Group Plc have announced £1 billion for loans to fund insulation and low-carbon heating in low-income housing.
Barclays UK Corporate Bank and Lloyds will each offer £500 million to social housing providers, with as much as £750 million guaranteed by the National Wealth Fund, the government-backed entity said Thursday.
It’s the first investment announced by the fund since it re-branded from the UK Infrastructure Bank earlier this week, broadening its remit beyond infrastructure to include promoting growth.
“We are helping registered providers access the attractive financing that they need to implement critical retrofit measures, reducing bills and improving comfort for social housing residents across the UK,” said John Flint, the fund’s chief executive officer, in a statement.
Britain is trying to reach net zero emissions by the mid-century. The loans seek to reduce pollution from heating homes, which represents around 15% of the UK’s total greenhouse gas emissions.
Social housing, rented to people on lower incomes, is subsidized by the government and managed by councils or housing associations. It tends to be more energy efficient than privately rented or owner-occupied housing, in part because it is owned and managed by large organizations that can make large-scale improvements all at once.
Still, it represents around 15% of all UK homes in fuel poverty, when a household spends more than 10% of its income on energy bills, according to the fund. Around 39% of socially rented homes have poor energy efficiency ratings.
The National Wealth Fund will start out with £27.8 billion in public money but “will unlock tens of billions more in private investment”, said Rachel Reeves, the UK’s Chancellor of the Exchequer.
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