1. Environmental Upgrade Finance
Managing Climate Risk in Agriculture Conference 2018
Scott Bocskay, CEO
7 April, 2019

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3. Who we are Shared services for councils:
Enabling Councils to offer EUAs, open to all lenders, cost effectively since 2010
Work with Councils, lenders and businesses to demonstrate value of EUAs and grow the market place in Victoria
Investor:
Non bank lender into innovative approaches to achieve ‘sustainability’ outcomes since 2002
Work with customers to identify the commercial opportunities in ‘sustainability’ through EUAs
BetterBuildingFinance.com.au @BB_Finance
Sustainablemelbournefund.com.au @SMFAus

4. The Problem: Business costs are rising
Utility Bills are rising
Eroding business profitability
Future business risk of business input costs
Energy market uncertainty
Electricity
Gas
Available capital
Opportunity Costs
Split incentives

5. Solutions are commercial now
Saving and Generating your own Energy
Capital costs have reduced
Business Case strong for investment in an increasing number of businesses
Rising energy costs
Make business case compelling for investment
How to Finance?

6. Agriculture – Opportunities and Barriers
32,500 agri-businesses registered in regional and rural Victoria
Cost and reliability of Energy a driver for action
High upfront capital costs with long simple payback periods
Opportunities around Water (efficiency and recycling as well as water pumping) and other sustainability projects
Victoria: Agriculture Energy Investment plan.
Assessments
Capital subsidies
Source: Agriculture Energy Investment plan

7. Environmental Upgrade Agreements (EUAs)
A long term, fixed interest loan, available for up to 100% of a project cost
Repayments made via quarterly council rates
For projects that deliver greater profitability, which also yield an environmental benefit
Available for non residential property only
Retail, Office, M’facturing, Agriculture etc…
Can be used in partnership with Government Grants

8. Why EUA’s? No Additional Security – Mortgages, PPSR 100% Finance
Greater cash flow for your business
Statutory charge = fixed quarterly repayments
A loan you don’t need to repay upon sale of land
Transparent, simple loan where you own the assets with no hidden charges

9. Long loans = more cash in your business now
When repayments are spread out over long periods you have more cash in your business now
Cheaper 10 year loan, but more annual cash outflow
15 year loan (more expensive) but more cash in your business now

10. How Does an EUA Work?

11. Case Study 1 - Kevin Minogue

12. CASE STUDY 2 – BOOTH TRANSPORT
“Repayments were attractive as they come in the council rates once a quarter rather than every month so it make it a lot more manageable servicing than a normal loan.” - Mitchell Booth, Principal, Booth Transport
Booth is one of Australia's most respected national freight and logistics service providers. The company has around for 80 years with four generations of the family involved in the business. Its operations expand across five states with multiple depots in NSW, VIC and SA, which includes 600 employees and approximately 300 trucks.
Strathmerton – Solar
$126,000 in energy bills
$690,000 capital cost 100% financed
Summary
First EUA, the business chose solar to save on energy bills at their Strathmerton site which will reduce costs by percent over a twelve month period, enabling these savings to be invested in other parts of the business. 391kW solar array will generate around 561,000 kWh of electricity per year.
Strathmerton – Annual Savings
$1.2M cost savings
2,749 tonnes of CO2-e
77 FTE created
$4.0M capital cost, 100% financed
Summary
After the success of the Solar array, a water treatment plant (recycling 120,000 kilolitres of water) with an additional EUA on their Strathmerton deport.

13. Participating Councils
Plus more

14. Facebook: sustainablemelbournefund Twitter: @SMFAus
Scott Bocskay, CEO
Facebook: sustainablemelbournefund