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The customer-owned lender has received a $50 million investment from the CEFC for energy performance upgrades of existing homes.
Government-owned ‘green’ bank, the Clean Energy Finance Corporation (CEFC), has announced a $50 million commitment to Bank Australia for energy performance upgrades of existing homes as part of the rollout of its Household Energy Upgrades Fund (HEUF) program.
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The CEFC said its finance would support up to $100 million in green lending, including Bank Australia’s Clean Energy Home Loan to help deliver a reduced variable rate of 5.38 per cent for the first five years of the loan.
The ‘green’ bank said on a loan balance of $500,000 on a comparable home loan, this could reduce monthly repayments by $254 for five years with potential savings of $24,500 in interest payments over a 30-year loan term.
It is the fourth CEFC investment from the HEUF, taking total commitments through the program to $345 million.
The Australian government has allocated $1 billion to the CEFC to create the HEUF and fast-track energy improvements in existing housing by providing discounted consumer finance through a range of co-financiers.
CEFC CEO Ian Learmonth said: “We are proud of the work we have done with Bank Australia to develop the green home loan market and create innovative loan products to cater for consumer demand. This commitment via the HEUF is a great opportunity to reach more Bank Australia customers and support the electrification journeys of their existing homes.
“Increasing the uptake of renewable energy, storage and related infrastructure is critical to Australia’s net zero ambitions and clean energy transition.
“The installation of more rooftop solar, home batteries and energy efficiency equipment will help unlock additional clean energy capacity. This means we can better manage energy demand and ultimately contribute to the creation of a stronger, more reliable and cleaner grid.”
The Bank Australia Clean Energy Home Loans were created to help incentivise customers to buy or create more sustainable homes.
Bank Australia managing director Damien Walsh said: “As a customer-owned bank we know our customers care about climate action so we’ve set a net zero emissions by 2035 target. Supporting our customers to buy, build or renovate energy efficient homes will play a big role to meet our goal.
“We know purchasing a sustainable home or making green upgrades isn’t always an easy process, and that’s why we’re working with the CEFC to offer attractive loan products and support our customers to decarbonise their homes.
“We have changed our Clean Energy Home Loan criteria to be all-electric and made it easier for customers to select the relevant pathway for their home, whether that’s renovating an established home or buying a newly built home.”
Supporting green investment
The CEFC said that it has received proposals for investment opportunities worth more than $850 million in green loans and continues to work with a range of lenders to develop products with the potential to be financed through the HEUF, with further commitments expected in 2025.
The proposals covered green mortgages, green personal loans, and other green finance products to improve home energy performance for home owners, renters, and strata properties.
In August, ASX-listed lender Westpac became the first bank to be supported by the HEUF, after the fund committed $160 million towards the Westpac Sustainable Upgrades Home Loan product.
ING also launched a CEFC-backed green energy upgrade loan last month and CEFC has also partnered with non-bank lenders, such as Metro and Firstmac, to offer green vehicle loans.
[Related: Major bank launches new home loan for sustainable upgrades]
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