1. Environmental Upgrade Agreements
Scott Bocskay, CEO
8 November, 2018

2. Environmental Upgrade Agreements
About Sustainable Melbourne Fund
Environmental Upgrade Agreements
We work with customers to identify the commercial opportunities in ‘sustainability’ through EUAs and direct investments
Investments
We are an investor in innovative approaches to achieve ‘sustainability’ outcomes since 2002
Services for Councils
SMF – owned by Local Government
Servicing Local Government
Enabling parties to communicate about EUAs……
We are a third party administrator – enabling Councils to offer cost effective programs for EUAs

3. How Does An EUA Work?

4. WHY EUAs? Building Owners
No requirement for additional upfront capital or security to be provided to the financier
Statutory charge = reduced re-financing risk
More significant upgrades can be achieved with no or minimal cash flow implications
Sharing of upgrade costs with tenants

5. 54% of Victorian SMEs are tenants
WHY EUAs?
54% of Victorian SMEs are tenants
Source: VECCI 2015

6. Case Study : SMF Solar Finance 30kW Solar
PROJECT DETAILS
Streamlined credit approval EUA
30kw Solar array for a commercial kitchen with large cool rooms
100% tenant pass through
BENEFITS
Immediate cash-flow benefits with $9,000 annual decrease in electricity bills, being greater than the annual debt repayments
Increase in capital value of the building

7. How An EUA Works – Building Owner
SMF Solar Finance 30kW Solar project on a commercial building
Lease
EUA
Loan Amount
$40,740 (ex GST)
$45,474 (inc GST)
Interest Rate
9.3%
7.1%
Years of loan 7 10
Payments Per Year 12 4
Annual Payment (P & I)
-$7,940
-$6,463
Annual Savings $0
$6,463
Project Simple Payback (yrs)
N/A
Net Annual Cost
Cash – flow Benefit
NPV (pre tax)
-$41,340
+$3,758
Tenant Contributions

8. How An EUA Works – Tenants’ Benefits
SMF Solar Finance 30kW Solar project on a commercial building
Tenant project NPV = $52,212

9. Estimated EUA Opportunities in Victoria
239,563 Buildings*
$4.8 Billion Additional Investment*
916 MW Solar#
18,000 Extra Jobs*
Source: EUA Finance for the Regions, EAGA. 2013
#Manufacturing, Warehouse, Distribution and Storage industry sector only

10. The Benefits For Your Council
Unlock private finance in your region
Stimulate local economic activity
Improve business profitability
Assist local businesses and landlords
Achieve sustainability objectives

11. Using SMF As Your Third Party Administrator
SMF Third Party Administration services to establish and operate an EUA program for local Government includes:
PROGRAM ESTABLISHMENT
SMF works with your rates department to establish and document systems and processes for EUA administration using our current program and template documentation
PROGRAM DELIVERY
SMF receives and processes applications
Creates executable contract for the municipality (with documentation)
Monitors contract performance
Origination, communication and market education
PROGRAM REPORTING
SMF provides quarterly reporting on program activities and transactions

12. Scott Bocskay, CEO
Facebook: sustainablemelbournefund