Newcastle commercial and industrial building owners now have access to an inventive financial scheme to undertake environmental building upgrades.

Recently Newcastle City Council launched the scheme as part of the new Environmental Upgrade Agreements (EUAs) program, whereby non-residential building owners can secure low-risk finance for energy, water and other environmental upgrades, in which the loan is attached to the property and not the building owner.

Under the model, a finance provider lends funds to a building owner for environmental upgrade works. Council then uses its rates system to collect the loan repayments from the building owner, which are then passed on to the finance provider until the loan is repaid.

The unique funding scheme offers a number of advantages over traditional commercial arrangements, including removing the need for upfront capital, lower fixed-interest rates and the capacity to use efficiency savings to repay the loan. It also offers an opportunity for building owners to share the cost of the building improvements with their tenants.

Future City Director Judy Jaeger says this innovative approach will help to overcome some of the barriers previously experienced by local building owners that wanted to upgrade their buildings but did not have the capital available to get the ball rolling.

“Projects delivered under a EUA will improve the value and quality of buildings around the city and also make an important contribution to the environment,” Judy said.

“Buildings with better environmental performance save money on energy and water and are better protected against future price rises. ‘Green’ buildings also have higher tenant retention and provide an enhanced work environment, with added health and productivity benefits.”

“EUAs are an important tool that will help us to achieve our Newcastle 2030 plan for best practice energy and water efficient buildings and infrastructure for the city.”

The launch of the pilot program follows in the footsteps of EUA programs rolled out in Melbourne, Sydney, Lake Macquarie, North Sydney and Parramatta.

To be eligible for a EUA, building upgrades must improve the energy, water or environmental efficiency or sustainability of the building. Works might include lighting upgrades, improvements to heating, ventilation and air-conditioning systems, installation of solar electricity (PV) systems or improvements to the energy efficiency of data centres and communication technology.

EUAs can be applied to upgrades of commercial buildings, industrial premises, shopping centres, hotels, medical, educational and aged-care facilities.

The program will run until June 2014 and is supported by the NSW Government’s Climate Change Fund.