GIB funds streetlight replacement in Glasgow
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- Management/saving ,
- Business & Industry
Glasgow City Council will be the first in the UK to use Green Investment Bank (GIB) funds to upgrade its streetlights to LEDs, it has announced.
The £6.3 million finance agreement will allow the council to replace 70,000 streetlights with LEDs, which will use at least 50% less energy than the existing light fittings. The move is expected to cut the council's greenhouse-gas emissions by over 18,000 tonnes over 18 years.
The GIB has specifically designed a loan to finance public sector energy efficiency projects. It provides a low, fixed-rate loan over a period of up to 25 years and allows for the repayments to be linked to savings generated by the project. The bank also provides local authorities with access to a development loan to help fund the costs of planning energy efficiency projects.
Through its work with Glasgow City Council, the bank has now developed a standardised process that other local authorities can use to agree financing to convert street lighting. This includes: guidance on drawing up a business case for projects; a financial model to demonstrate how the loan can be shaped so that interest and repayments are only made from forecast savings; and standardised loan documentation.
According to the GIB, the UK spends more than £300 million a year on electricity for street lighting, but less than 10% streets lamps are fitted with LEDs, It believes the upfront cost of replacing bulbs with LEDs is the reason why many councils have yet to switch.
Councillor Gordon Matheson, leader of Glasgow City Council, said: 'Street lighting is an essential service and so it makes sense to deliver it in a cost-effective way, which is exactly what we've been able to do here."
The bank says it has spoken to a number of other councils across the UK about similar schemes.
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