A new net zero initiative, which incentivises businesses to lower their carbon footprint, will be accelerated and launched in the new year, Vaughan Gething has said.
The Economy Minister has asked the Development Bank of Wales to fast track its "invest to save decarbonisation" offer and provide more favourable terms for businesses looking to invest in renewables and energy efficiency measures.
Accelerating the offer will allow Welsh businesses to invest in net zero projects sooner, reducing energy consumption and bills. Mr Gething described it as a "win-win scheme" for businesses to cut future energy costs and contribute to the Welsh Government's green economy ambitions.
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He said: "The Development Bank of Wales has become a national asset supporting businesses across Wales, improving their resilience and helping them grow and prosper. Over its first five years the bank has exceeded investment targets, delivering an economic impact of £1.2 billion.
“It is clear from my discussions with businesses that we must prioritise the job of reducing energy consumption and lowering bills for the long term. I have now asked the Development Bank to fast-track development of a new scheme supporting business transition to Net Zero on an ‘invest to save’ principle. This will allow businesses to take on borrowing to fund capital investment which delivers on decarbonisation through more flexible repayment terms, attractive interest rates and wider support such as help towards consultancy costs.
“This is a win-win scheme – making it cheaper and easier for eligible businesses to cut future energy costs and boost our shared ambition for a greener Wales.”
The Development Bank will also pursue an ambitious equity investment target of £100m over the next five to seven years.
Mr Gething said: “This investment, alongside private sector co-investment, has the potential to deliver over £250m of capital to innovative businesses – a much needed injection of capital that will help create new jobs, expand growth sectors and help position Wales for a more prosperous future.
“In the face of enormous challenges, the Welsh Government is determined to use its levers to provide stability with practical help for businesses and workers in a long partnership for a stronger, fairer, greener Wales.”
Development Bank chief executive Giles Thorley said: “As businesses find themselves faced with economic uncertainties - including greatly increased energy costs - it is more important than ever that we fulfil our role providing stability for the Welsh economy, and do all we can to support ambitious businesses looking to invest in their journey to Net Zero.
“We firmly believe that investing in environmental sustainability is both the right thing to do and makes good business sense, helping companies become more resilient, competitive and attractive to customers and talent. Having already launched the Green Homes Incentive to support property developers, we are now accelerating our programme of decarbonisation support to meet these pressing needs, making sure that Wales remains a great place to do business.
“This marks the fifth anniversary for the Development Bank of Wales. Whilst I’m very proud of our delivery and impact so far as well as the strong relationships we’ve built with Welsh businesses and stakeholders, I also look forward to continuing to drive growth in the Welsh economy. Our track record as one of the most active venture capital investors in the UK and our links to private sector co-investors makes us well placed to deliver the equity capital that Wales needs.”
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