Environmental Upgrade Agreements The easy way to finance building - PowerPoint PPT Presentation

Environmental Upgrade Agreements The easy way to finance building upgrades A new way to finance environmental building upgrades Environmental Upgrade Agreements An opportunity to grow capital value & returns – and unlock the value of older buildings Dominique Hertzog – NSW Office of Environment and Heritage

Environmental Upgrade Agreements Overview Key attributes of NSW EUA offer  Delivery method  Eligible buildings  Eligible works  Tenants’ contributions Packaging EUAs Status Key lessons Current issues/next steps 2 2

Environmental Upgrade Agreements Delivery - Local Councils Party to EUA - not a party to the loan Not liable for performance of works/use of funds Repayment conduit • Transfer repayments to lenders (only if received) • Cost recovery of processing fees • Enforcement if default Voluntary • Offering EUAs and entering into an EUA Promote EUAs with local stakeholders 3

Environmental Upgrade Agreements Delivery – Role of OEH Legislation Consultation Advice on policy intention as Template is being tested Support to pilot councils • Seed funding (1.7M shared by 7 councils over 3 years) • Knowledge sharing Stakeholder engagement (peak bodies) Not a party to the EUA (commercial agreement) 4

Environmental Upgrade Agreements Eligible buildings Non-strata and non-residential buildings: • Offices • Industrial • Shopping centres • Aged care, health and educational facilities • Motels, hotels, backpacker accommodation Once a Strata Template is released: • Non-residential strata buildings • Residential strata buildings (20+ lots) 5

Environmental Upgrade Agreements Eligible works Broad eligibility “works to improve the energy, water or environmental efficiency or sustainability of the building” • Energy or water efficiency • Waste & greenhouse gas emissions • Materials recovery or recycling • Pollution prevention or reduction • Renewable energy • Reducing car use 6 6

Environmental Upgrade Agreements Tenants contributions Net lease Tenants protection • No consent required • Contributions not to exceed • No change to lease tenants’ savings on bills • Landlord to notify • Transparency of calculations Gross lease • Annual reports • Consent required • actual savings vs estimated • Separate agreement savings 7

Environmental Upgrade Agreements Packaging EUA with other offers Referral to Energy Saver (ES) program  Offers technical support to businesses for energy efficiency projects  Identify energy efficiency opportunities  Subsidised energy audits and follow up (business case)  Identify financing options, assist with application/calculations  Energy Saving Certificates  AusIndustry grants  EUAs Referral to Councils by ES team Referral to ES team by Councils 8

Environmental Upgrade Agreements Status NSW State legislation February 2011 Commercial EUA Template O ctober 2011 Councils offering EUAs:  Sydney October 2011  Parramatta February 2012  North Sydney July 2012  Lake Macquarie December 2012 First EUA signed in NSW December 2012 Next: Newcastle, Penrith, Wollongong March/June 2013 9

Environmental Upgrade Agreements Key lessons so far Mid-tier sector  Varied and unexplored  Interested in retrofitting  Unsure about finance options It takes time  Putting the project together  Looking at technical and financial options  Managing expectations Multi facetted EUA  Diverse pipeline  Diversity of application 10

Environmental Upgrade Agreements Current issues / next steps  Commercial Template, fine tuning  On-going consultation  Pilot phase  Bringing more Councils on board  Success factor  Large stock of buildings  Demand by industry  Learning from the first EUAs  Strata Template, work in progress 11

Environmental Upgrade Agreements Dominique.Hertzog@environment.nsw.gov.au More info: http://www.environment.nsw.gov.au/sustainbus/eua.htm 12 12