GIB helps finance major local authority streetlighting project

UK Green Investment plc (GIB) has agreed to part-fund the biggest non-Private Finance Initiative (PFI) streetlighting project in the UK to date.

Summary

UK Green Investment plc (GIB) has agreed to part-fund the biggest non-Private Finance Initiative (PFI) streetlighting project in the UK to date.

It is providing Kent County Council with a £10.2m Green Loan to help finance the local authority’s £40m streetlight conversion programme.

The project involves the replacement of 120,000 traditional streetlights with energy-saving LED alternatives and the installation of a central management system (CMS), increasing the efficiency of the local authority’s lighting stock while making it easier to manage.

The council estimates that the programme will reduce annual electricity consumption by 60% and cut maintenance costs, resulting in anticipated savings in excess of £5m per year. The new lights are also expected to avoid around 223,000 tonnes of greenhouse gas emissions during their lifetime.

Salix Finance has also provided funding for the project, the contract for which has been awarded to Bouygues Energies & Services. All conversions are expected to be completed by mid-2019.

GIB’s Green Loan has been specifically designed to finance public sector energy efficiency projects. Similar streetlighting arrangements are already in place with three other UK local authorities: Glasgow City Council; Southend-on-Sea Borough Council; and Stirling Council.

Shepherd and Wedderburn LLP assisted GIB with the standardisation of the Green Loan process with a view to saving the public sector time and money in agreeing a financing package.

The streetlighting project is GIB’s second investment in Kent this year, having previously committed £80m to a new 43 MW combined heat and power (CHP) plant near Sittingbourne in July.

"Local authorities can run up significant energy bills, but making the switch to low-energy streetlighting helps reduce demand and costs while cutting greenhouse gas emissions. By embarking on this ambitious project, Kent County Council has joined a growing number of public sector organisations that are focusing on energy efficiency as they manage their economic and environmental responsibilities."

Edward Northam
Head of Investment Banking, GIB

"By embracing LED lighting in one of the largest projects of its kind in the UK we can make significant savings to our electricity bill and cut our carbon footprint. We are extremely grateful to GIB for the loan which will allow us to continue this ambitious project.

We have been prioritising residential areas since we first started the scheme in March. This is due to be completed next year and we will then be moving on to tackling town centres and main roads."

Matthew Balfour
Cabinet Member for Environment and Transport, Kent County Council

About the project

Total GIB share of investment: £10.2m Green Loan
Total capital mobilised: £40m
Contractor: Bouygues Energies & Services
Expected date of completion: mid-2019