Summary – The Green Deal Finance Company is being forced to consider liquidation due to a funding gap.
The Green Deal Finance Company (GDFC), which aimed to deliver loans to homeowners as part of the government’s flagship energy efficiency scheme, may have to consider voluntary liquidation because it has been unable to convince the state-owned Green Investment Bank (GIB) to continue funding.
At the end of July, the Green Deal Home Improvement Fund – devised to improve the energy efficiency of homes across England and Wales – was shut down following a surge in applications, with the scheme failing to meet its targets and being left out of pocket.
This meant that the Green Deal was unable to pay suppliers for the home improvements – such as insulation – they had already carried out on thousands of homes.
Now, the GDFC is under fire once more, as the firm’s chief executiveMark Bayley addressed a letter to Amber Rudd – a minister at the Department of Energy and Climate Change (DECC) -on September 22nd 2014 about the need for more funding, BusinessGreen reports.
“We advised that the GDFC could not continue without funding and that this funding could not come from any source other than government (either GIB or DECC),” he wrote.
But the GDFC,which was set up with over £240 million of public money, remains optimistic that it will be able to secure funding in the future.
A spokesman for the company downplayed the concept of voluntary liquidation, describing it as “very unlikely and just one of a range of scenarios”, but he argued informing investors of a possibility is simply a case of good corporate governance.
“We have strong support from investors and are still right in the middle of discussions with the GIB,” he added.
However, unless the government takes immediate action to provide the GDFC with a long-term solution and the necessary funds, it is unlikely the firm will make it past the new year.