Low-cost loan guarantee scheme projects for renovations face more delays – The Irish Times

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Government plans for a low-cost loan guarantee scheme to encourage homeowners to undertake home energy improvements have been pushed back to next year as part of the 2023 budget.

In his address to the Dáil, Public Expenditure Minister Michael McGrath said funding “to support the introduction of a new low-cost home improvement loan scheme” would be earmarked in the budget.

It was announced on Tuesday that “just over 500 million euros” have been made available to the Ministry of the Environment to go towards “energy transformation, including national programs for the renovation and energy renovation of dwellings”.

Some €337 million of the total – the vast majority of which will be funded by carbon tax revenue – will support the Sustainable Energy Authority of Ireland’s energy upgrade programme.

However, the Ministry of the Environment said the amounts earmarked for the loan program, which will be administered by banks and credit unions, have not yet been determined. A spokeswoman also said that “detailed parameters of the scheme such as loan terms and amount of loans to be made available are being finalized”.

She said the loans were expected to be available “early next year”, despite previous indications from the government that the scheme would be in place by the summer of 2022. Meanwhile, the European Central Bank raised interest rates in response. to soaring inflation and household borrowing costs are expected to rise as policymakers continue to tighten monetary policy.

As part of its climate action plan, the government unveiled its ambitious national renovation program last February, aiming to carry out 75,000 housing renovations per year from 2026 to 2030 to reach its overall target of 500,000 d 2030.

The 8 billion euro program will allow owners to benefit from government subsidies representing between 45 and 51% of the cost of a project.

A key element of the plan was a proposed low-cost loan guarantee scheme, allowing households to finance the unsubsidized part of their project costs at reduced interest rates, between 3 and 3.5%.

The government said at the time that the program would be funded partly by the Treasury and partly by the European Investment Bank as part of Ireland’s national recovery and resilience plan.

In February, the government said the scheme would be in place by summer 2022, with Environment Minister Eamon Ryan telling a press conference that people could also apply for financing from existing lenders. or consider financing their renovation projects themselves.

A spokeswoman for the minister’s department said on Wednesday the government was ‘still engaging with the Strategic Banking Corporation of Ireland and the European Investment Bank in relation to the development of a renovation loan guarantee scheme residential”.

Once operational, the department expects a loan portfolio of 500 million euros will be available.

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