Commercial Property Consultants
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Legislation to Empower Energy Efficient BusinessesFriday 18th September 2015
The Local Government Legislation Amendment (Environmental Upgrade Agreements) Bill 2015, was announced at the Monash Training and Seminar Centre in Oakleigh in June of this year. EUAs provide for council-rates based financing to help businesses efficiently fund building works which improve energy efficiency, reduce waste and cut water use.
Under an EUA, lenders provide finance to a building owner for environmental upgrades, with the local council then collecting the repayments through its rates system and passing them on to the lender. This means that building owners and tenants pay back the loan at the same time that they are benefiting from the lower costs of a more resource efficient building. If ownership or tenancy rights change, the new owners take up the loan and pay it through their rates. Without this system businesses have a disincentive to invest in efficiency because they may move premises before paying off the loan. By allowing the use of the council rates system, loans will also be more secure, allowing lenders to offer more attractive loan terms to businesses.
In Victoria, EUAs are currently only available to businesses in the City of Melbourne through the City of Melbourne Act 2001. The new legislation will expand the existing scheme to all Victorian councils, discussions are being held through other local councils to work through the interest local businesses and property owners have in EUAs and how this program might be rolled out. More information can be found at: