THFC

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THFC

THFC Background

• Not for Profit finance company established in 1987

by the Housing Corporation and the National

Housing Federation

• Sole purpose is providing loan finance to

Registered Providers of social housings

• Lend to over150 different HAs across the UK, from

very large to small community based organisations

• Currently lend over £2.5Bn

• Experts in bond finance and EIB sourced funding

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THFC

THFC EIB relationship

• Introduced EIB to the UK social housing sector in

1998

• Since then THFC has borrowed over £1billion from

EIB which it has onlent to c.80 RPs

• Original purpose was “urban regeneration” which in

EIB terms meant refurbishment of existing properties

• Since 2005 the purpose has been extended to include

funding of new development – albeit still within the

context of urban regeneration

• Through the core relationship EIB introduced THFC to

the JESSICA initiative

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THFC

THFC Greener Social Housing

• Under the JESSICA initiative Member States are being given the option of using

part of their EU Structural Funds allocation to make repayable investments in

urban renewal and development projects. The Greater London Authority is

responsible for managing London's European Structural Funds programmes.

• A Funding Agreement between the GLA (and LWARB) and EIB sets out the

terms and conditions relating to the establishment and management of the

JESSICA London Green Fund (“JLGF”) by the EIB and the contribution of funds

to the JLGF.

• An amount of GBP 50 million from the London ERDF Operational Programme,

match funded by a further GBP 50 million from the GLA and LWARB, giving

GBP 100 million in total, has been allocated to the JESSICA initiative. Of this

£12million was allocated to the Greener Social Housing project.

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THFC

THFC Greener Social Housing

• Procurement process to select the UDF to invest in

Urban Projects compliant with the London ERDF OP

• Repayable investments in energy efficiency retrofit of

existing social housing in London

• List of measures set out as part of the procurement

process

• THFC selected as the UDF in October 2012

• Operational Agreement signed with EIB in February

2013

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THFC

Loan details: General information

• Key for THFC – funds had to be provided by way of a

loan facility

• £12 million total available for refurbishment in social

housing. Some diversification required so allocations of

£3m-£4m per borrower

• Loan repayments will begin after year 10 based on a

repayment schedule with a final maturity of 30 years,

reflecting the long term investment in housing assets

• Very cost effective loan rates – less than 2.00% fixed

• Projects to be completed prior to December 2016

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THFC

Loan details: Eligible measures

Heating/ventilation

• Condensing boilers

• Heating controls

• Under-floor heating

• Heat recovery systems

• Flue gas recovery

• Chillers

• Heating ventilation and air-conditioning control

• Variable speed drives for fans and pumps Building fabric

• Cavity wall insulation

• Loft/flat roof insulation

• Internal/external wall insulation

• Floor insulation

• Draught proofing and sealing improvements

• Duct insulation

• Pipework insulation

• Heating system insulation

• Energy efficient glazing and doors

• Solar blinds, shutters and shading devices

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THFC

Loan details: Eligible measures (cont.d) Microgeneration

• Ground/air/water source heat pumps

• Solar PV / solar water heating

• Biomass boilers

• Micro CHP (electrical capacity of 50kW or less)

• Micro wind generation (nominal output between 300w and 50kW)

• Larger wind energy associated with social housing schemes

• Larger scale CHP and district heating

Water

• Hot water controls

• Hot water showers and systems

• Hot water taps

• Waste water heat recovery attached to showers

Lighting

• Lighting systems, fittings and controls

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THFC

Application and reporting templates

• Form 1: Urban Project Information report to include:

– Number and type of units (e.g. rental social housing, shared ownership social housing ,etc.) under the refurbishment programme

– Implementation period

– Expected overall carbon savings from investments (tCO2e per annum).

• Form 2: Urban Project Due Diligence report to include:

– Initial screening of potential projects against a set of criteria:

– Costing assumptions including hidden costs that might not have been accounted for

– ECO and Green Deal Finance opportunities and assumptions that underpin the programmes

– Timescales for delivery

– Carbon reductions expected

– Eligibility of the technologies

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THFC

EU Regulations/Requirements

• Specific advice received regarding State Aid

issues and compliance confirmed

• Compliance with Structural Funds

Regulations

• Ongoing information and reporting

requirements widely drafted

• Specific publicity requirements

• Potential for audit by a number of bodies

including the Commission

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THFC

THFC Greener Social Housing – Project 1

• Gallions HA

• Two projects supported - refurbishment of Parkview Hub and a

windows and doors upgrade programme across Gallions stock

• Parkview Hub retrofit aims to be a national exemplar of sustainable

refurbishment, and to transform image of South Thamesmead

• Comprehensive retrofitting of five-storey linear block with 18 housing

units, including conversion of existing underused garage spaces for

retail, community and other local facilities

• Project will be test case for future investment to reduce fuel poverty,

promote social interaction, increase resident satisfaction and reduce

fear of crime

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THFC

THFC

THFC

THFC Greener Social Housing – Project 2

• A2Dominion Group

• Scheme 1 - full retrofit scheme including cavity wall insulation,

internal/external wall insulation, loft/flat roof insulation and

double glazing

• Scheme 2 – large scale boiler upgrade

• Scheme 3 – external wall insulation

• Approx 900 housing units

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THFC

THFC Greener Social Housing – Project 3

• Origin Housing Group

• Scheme 1 - Large scale boiler replacement across stock

• Scheme 2 - External wall insulation (approx £400,000) across 6

blocks and 4 specific homes

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THFC

Co-financing under EIB Finance Contract

• Separate £400million facility from EIB itself

• Commitment required to provide funding of

£200million for new build schemes in

London – target exceeded

• Facilitates delivery of over 2,000 units of

affordable housing in London

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