Council secures largest ever Salix loan in Scotland to fund energy improvements

The Highland Council has secured a £3.5m interest-free loan from Salix Finance to invest in energy efficiency measures across the Council estate. The loan, which is the largest Salix has awarded in Scotland, match-funds the Council’s self-financing investments in energy efficiency to create a £7 million Energy Efficiency Fund.

The fund is ring-fenced for investment in projects that will reduce the Council’s energy spend and carbon emissions. This will include switching internal and external building lights to efficient LED lighting, installing Solar Photovoltaics, and upgrading inefficient oil boiler systems.

Salix Finance is an independent organisation that provides interest-free loans for investment in improving energy efficiency.  Salix is funded by the Scottish Government, the Welsh Government and the Department of Business, Energy and Industrial Strategy and provides finance to public sector bodies to reduce their carbon emissions and energy spend.

Work is being undertaken by Council officers to refine the projects and determine the best sites to maximise financial and carbon savings. Thanks to these upgrades, the Council forecasts a potential saving of over £600,000 per annum on energy bills and annual carbon savings of over 1,600 tonnes of carbon dioxide equivalent.

Lighting and heating upgrades are also anticipated to make considerable improvements to the working and learning environments for both staff and school pupils.

Councillor Margaret Davidson, Leader of the Council, said: “We are delighted to have secured this loan from Salix Finance. Investing in energy efficiency measures across our Council estate is vital to both our financial and environmental sustainability."

She added: “The Council recognises that it has a vital leadership role in terms of reducing the region’s climate change impact to support both national and global emissions reduction targets.  This funding from Salix, alongside work which has already been programmed, will allow us to go further and faster in terms of mitigating our impact.”

Councillor Gordon Adam, Chair of the Commercial Board, said: “Advice from Procurement Scotland has indicated that electricity prices are going to rise significantly by 2020/21. The Council must reduce our consumption of energy to protect us from future increases to our energy bills and reduce this budget pressure, therefore helping us protect our frontline services.

“Securing this interest-free loan enables us to significantly increase the amount of energy efficiency work we can undertake. It is a really exciting opportunity and an important component of our Energy Strategy, alongside reducing energy use through behaviour change and increasing the Council’s renewable energy generation.”

The Council will operate the loan as a ‘Recycling Fund’, whereby savings made from these projects will be ‘recycled’ back into the Energy Efficiency Fund for investment in additional energy efficiency measures. The Council can continue to ‘recycle’ this funding, without interest, for as long as it has projects that meet Salix criteria to reduce carbon emissions and energy spend.

To date, Salix has worked with the public sector in Scotland to invest over £51 million in energy efficiency projects, saving an estimated £146 million over the lifetime of the projects.