HEFCE Salix Institutional Small Project Fund

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HEFCE Salix Institutional Small Project Fund

• Workshop

Our mission is to work with the public sector to
reduce carbon emissions through investment in
energy efficiency and renewable technologies.
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Welcome

• Why we are holding these workshops?

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ISP Fund Workshop Agenda

• Salix Finance
• Outline of the fund
• The process
• Interviews

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Salix Finance

• Not for profit company, limited by guarantee set
  up in 2004 by the Carbon Trust (CT)
• Funded via CT from DEFRA
• Working across the public sector with HEIs,
  Local Authorities, NHS Foundation Trust Hospitals
  and Central Government Department
• Currently has over 80 clients

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Outline of the ISP Fund

• Long term interest free loan fund for investment
  in energy saving projects
• Fund is ring fenced within the organisation
• It remains at a constant size throughout its life
• Expected life of the fund is c15-20 years
• Funds used to finance individual compliant
  projects

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What we are looking for in a successful applicant

• Good people to run the fund generally the
  energy manager
• Good relations with finance, sustainability,
  procurement and facilities management
• Ability to market the fund internally
• Processes and systems in place to identify
  projects
• A strong stream of compliant projects which fit
  with the fund cash flow

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The model

• Funds are drawn down in tranches
• 80 of each tranche has to be committed to
  compliant projects before the next tranche can be
  claimed
• Each individual project repays its cost back to
  the fund for reinvestment in further projects
• All projects must be compliant

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The HEI contribution

• As part of the fund the HEI is required to add
  25 of the fund.
• This can be used for less compliant projects
  longer payback and more expensive CO2
• The 25 contribution is added at each tranche
  claim payment
• E.g. A 400,000 fund from HEFCE and Salix will be
  supplemented by an extra 100,000 from the HEI

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Compliancy tests for main fund

• Every project must be additional
• Technical payback for projects is 5 years
• Lifetime Cost of CO2 is less than 100 per tonne
• This is calculated by dividing lifetime CO2
  savings into project cost

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Compliancy tests for HEI 25 contribution

• Every project must be additional
• Technical payback for projects is 10 years
• Lifetime Cost of CO2 is less than 400 per tonne

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The extras

• To every compliant project up to 15 can be added
  as a management charge which is used to support
  the cost of running the fund or to help identify
  further projects.
• Up to 25 of the annual energy savings can be
  retained by the project budget holder to use for
  front line services
• In both cases the payback period is extended

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Next steps

• Structured interview
• Notification of outcome w/c 29th September
• Submission of full application from successful
  applicants October 17th
• Agreement by RGF advisory group
• Reality check - End November/December
• Signature of Salix Conditional Grant Offer Letter
• First grant claim December, January

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Thank you

• Salix Finance
• 25 Southampton Buildings
• London
• WC2A 1AL
• www.salixfinance.co.uk