The Minister for Communications, Energy and Natural Resources Pat Rabbitte TD announced the Government has approved his proposal to establish a €70 million Energy Efficiency Fund which will provide project lending for energy efficiency works in the public and commercial sectors.

The Energy Efficiency Fund will be separate from, and additional to, the grants-based Retrofit programme for private homes, which currently maintains more than 4,000 jobs.

Mr Rabitte said: "The Government has authorised €35 million in seed capital for the Fund, which will leverage a similar amount from the private sector. We estimate that about €250 million in savings can be made in energy bills in the public sector alone. Around 675 jobs, direct and indirect, will be created for every €10 million expenditure."

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The Energy Efficiency Fund will finance two main types of project, in the public and commercial sector:

•Energy Performance Contracts, where funding is drawn down by an energy services company (ESCO) – a commercial business that designs and implements energy savings for clients

•Direct lending to client companies

He said: "Separately, I will bring proposals to Cabinet later this year for the residential sector to transition from the Retrofit scheme, which pays grants after the event to those who can commit to the cost of upgrading their homes, to a new financing model 'Pay as you Save' (PAYS). Under PAYS, the homeowner will enjoy the same immediate benefits as Retrofit and will be able to finance their home improvements from on-going savings on their energy bills."

(CD/GK)