Environmental Upgrade Finance - Sustainable Australia Fund

Established in 2002 and initially called the Sustainable Melbourne Fund, the City of Melbourne developed the fund to finance sustainable initiatives undertaken by buildings in the council district. Expanding to new council areas in Victoria, the benefits of the fund were finally seen by council areas in South Australia and New South Wales which led to the Sustainable Australia Fund.

Are you able to benefit from the Sustainable Australia Fund? Well this write-up will hopefully inform you of your eligibility. But first, lets run through some of the basics.

What is Environmental Upgrade Finance?

Environmental Upgrade Finance (EUF) is a financing scheme introduced by the Sustainable Australia Fund to fund building upgrades to non-residential properties that are going to have environmental and sustainable benefits to the business and in turn benefit the environment. The business projects that can be funded range from renewable energy upgrades like solar, energy and water efficiency, waste management, through to significant building upgrades and renovations.

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How does Environmental Upgrade Finance work?

The finance covers the full cost of the building upgrade, including any auxiliary costs, while offering an agreeable fixed-rate, long-term loan repayment option. The projects are funded by Sustainable Australia Fund who provide the necessary capital. This capital is then paid off to the local council through council rates. There are a couple of options for business owners, one being to take on the loan and make repayments themselves, or they can include tenants in the repayments while they enjoy cheaper energy costs. As the finance is secured by the land, not the owner, if the property is sold, the new owners can continue to make the repayments and benefit from the upgrade.

Environmental Upgrade Finance is offered through three different products that target different business requirements. It gives the clients the ability to choose an option that is suitable to their needs. These products are below:

Solar Fund – a competitive long term fixed-rate solar PV and battery finance solution for commercial businesses
Capital Fund – for construction projects to reposition an asset or make significant renovations. Capital Fund can cover the environmental upgrade components of the project, such as HVAC and green building practices
Upgrade Fund – as with the Solar Fund, the Upgrade Fund is a long term fixed-rate finance but is instead suitable for a range of environmental upgrades like energy efficiency, water efficiency improvements and waste management solutions

Differences between Environmental Upgrade Finance and regular solar financing options?

Projects can receive up to 100% finance inclusive of soft and hard costs
In situations where the property is leased, a split repayment option between tenants and landlord can be arranged
No personal, business or other type of security-based information is required
Loan terms can be offered up to 20 years
No final balloon payments at the end of agreement as is usual for a rental agreement
Repayments are made quarterly
EUF Loans are non-recourse
Finance isn’t attached to the land not owners, so loan transfers with land title if property is sold

Am I eligible?

If you are operating a business on a non-residential property that sits on rateable land then you are eligible to apply for Environmental Upgrade Finance. However, there are a few other requirements you need to meet before you’d have approval.

Must primarily be a non-residential property
Must sit inside one of the council areas that offer EUF (see postcode list below)
The building must not be owned through a super fund that is self-managed
The building must reside on rateable land
It must be an improvement on an existing building
There must be a measurable environmental benefit

List of postcodes where Environmental Upgrade Finance is currently available

This list is updated as of November 2019 – see up to date list here.

Victoria	New South Wales	South Australia
Baw Baw Shire Council Brimbank City Council Campaspe Shire Council Cardinia Shire Council Central Goldfields Shire City of Greater Bendigo Council City of Greater Geelong Council City of Kingston City of Melbourne City of Monash Council City of Port Phillip Darebin City Council Greater Dandenong Council Greater Shepparton Council Hepburn Shire Council Hobsons Bay City Council Horsham Rural City Council Hume City Council Indigo Shire Council Knox City Council Macedon Ranges Shire Council Maribyrnong City Council Mildura Rural City Council Mitchell Shire Council Moira Shire Council Moonee Valley Council Moreland City Council Mornington Peninsula Shire Mount Alexander Shire Council South Gippsland Shire Council Wangaratta Rural City Warrnambool City Council Wellington Shire Council Wyndham City Council Yarra Ranges Council	Blacktown City Council Parramatta City Council City of North Sydney City of Sydney Lake Macquarie City Council Newcastle City Council South Australia	City of Adelaide Town of Gawler City of Marion City of Onkaparinga City of Playford City of Salisbury

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Jeff Sykes

CEO at Solar Choice

Jeff has consulted on over 20MW of commercial solar projects, ranging from SMEs to ASX top 100 companies. Jeff has also provided independent advice to 100s of residential solar, battery and EV charging customers across every state in Australia. He holds an MBA from the Australian Graduate School of Management and is an expert in business strategy and financial analysis.