My Department is working with the Department of Finance, the Strategic Banking Corporation of Ireland, the Sustainable Energy Authority Ireland, the European Investment Bank and the European Investment Fund to develop a residential retrofit loan guarantee scheme, which will be backed by a counter guarantee provided by the EIB Group.
The residential retrofit loan guarantee scheme will be the first consumer-focused guaranteed loan of its kind in Ireland. The roll-out of the loan scheme is a key action of the Climate Action Plan 2023 and the National Retrofit Plan. The National Retrofit Plan is regarded as one of the most ambitious in Europe and is backed by an unprecedented €8 billion of National Development Plan funding. The proposed loan scheme will have a lending portfolio of approximately €500 million.
The loan guarantee will provide risk protection to retail credit institutions participating in the scheme and will enable credit institutions to offer loans of up to €50,000 with reduced interest rates to private homeowners and non-corporate landlords. This will make comprehensive home energy upgrades more affordable for householders and will assist Ireland to achieve our climate goals.
Further, it will signal to the banking sector, new sustainable business opportunities associated with retrofit and the transition to a low carbon economy as well as increasing the volume of retrofit activity within the State. Significant progress has been made to date, with two open calls for expressions of interest to participate in the scheme completed, and a number of banks and credit unions submitting formal expressions of interest.
The development of this innovative scheme is a complex process involving several stakeholders. Intensive engagement to develop the scheme is ongoing and there has been extensive due diligence between the EIB Group and the Irish banking and credit union sector. All stakeholders both at national and European level are committed to finalising the project and in order for the loan guarantee will be in place in Q3 2023.
