Developed with support from the Royal Institute of British Architects (RIBA) the Carbonlite Challenge rewards property developers who go green by offering cheaper finance for more sustainable projects.
Developers will have to meet a series of sustainability metrics, from the embedded carbon of the project to its calculated operational energy and potable water use. They will then be rewarded with rebates that bring the net annual cost of their borrowing down to as low as five per cent.
Loans of up to £10m for those developments that qualify
The Carbonlite Challenge offers loans of up to £10m to qualifying residential developments in England, Scotland and Wales, using finance provided by lead investor M&G Investments.
The Carbon and Sustainability Rebate is paid to developers upon completion of their project and after independent assessment of the development’s carbon and sustainability credentials, based on RIBA’s 2030 Carbon Challenge (vs2) targets.
Chris Gardner, co-founder of Atelier, said: “From the energy used to heat buildings to the carbon released during their construction, the built environment is responsible for 40 per cent of the UK’s carbon emissions.
“The goal of the Carbonlite Challenge is to use the power of global capital to reduce the cost of development finance and change the way Britain builds homes for the better, and forever.
“By connecting institutional investors seeking low carbon opportunities to forward-thinking developers who see the commercial benefits of building more sustainably, we’ve built a financial bridge between global net zero targets and the development of greener homes.
“Focusing solely on EPC ratings is not enough. The Carbonlite Challenge is our way of helping Britain build back not just better, but bolder and greener.”
A coalition across property, greentech finance and legal sectors
The seven-month pilot programme is being delivered by a coalition of real estate, greentech finance and legal firms. They include development finance brokers SPF Private Clients and Carbon Funding Consultants, property advisers Savills, building consultants Paragon and international law firm Allen & Overy.
Mark Harris, chief executive of SPF Private Clients, said: “We are delighted to be a partner in the launch of this innovative and much needed product.
“Environmental concerns are increasingly on the agenda so developers will welcome this opportunity to be rewarded for taking a green approach, incentivising them to deliver sustainable schemes. Crucially, they will also benefit from reduced funding costs, making this product among the most competitively priced on the market.”
