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Environmental upgrade finance is now available to create a more sustainable future for your building and your business – click here now to receive application information.
Making access to retrofits easier
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Environmental upgrade financing is the finance mechanism available under the 1200 Buildings program for environmental upgrades to buildings in the City of Melbourne. Environmental upgrades include the installation of energy efficiency improvements, renewable energy systems, and water conservation improvements.
This financing mechanism is underpinned by legislation under the City of Melbourne Act 2001. The mechanism allows Melbourne City Council, in partnership with Australian financial institutions, to enter into voluntary environmental upgrade agreements with building owners to finance environmental upgrades for non-residential buildings. Property owners are also able to to pass part of the environmental upgrade charge to the building occupiers (tenants). The legislation requires that any such arrangement can only be made with the tenants consent. The objective of this requirement is to overcome the split incentive barrier so that the costs and benefits can be shared by the building owner and the occupiers.
Through the scheme, finance can be advanced by a financial institution for environmental upgrade works on a building. The financed amount is levied as a special charge by Melbourne City Council, an environmental upgrade charge, and the repayments will be collected by Melbourne City Council and paid to the financial institutions. This mechanism reduces the risk associated with lending for the financial institutions and provides finance at a rate lower than commercially available for property owners.