£150m commitment for social housing retrofit
Rothesay has made a £150m commitment to a new unsecured debt facility for social housing retrofit launched by the National Wealth Fund (NWF) and The Housing Finance Corporation (THFC).
The facility has been launched with an initial £150m financial guarantee from the NWF to support THFC to make long-term, unsecured loans to help registered providers (RPs) retrofit their social housing stock in the UK. As a result of the NWF’s support, Rothesay has committed to provide THFC with 100% of the initial £150m investment, demonstrating how the NWF’s guarantee can unlock long-term unsecured capital for RPs at pricing usually reserved for secured lending.
The partnership represents the first occasion that the NWF has provided guarantees for this purpose to bond market investors. THFC and the NWF hope to grow the scheme to £250m over the next 6 months depending on take-up.
Giving bond market investors access in this way helps accelerate the retrofit of social housing stock across the UK, significantly reducing both the sector’s energy consumption and emissions.
Speaking about the partnership, Tom Pearce, Rothesay Chief Executive, said: “As a long-term investor in the UK, Rothesay is pleased to provide the funding for the launch of this new facility, supporting housing associations across the country to access the investment they need to reduce their environmental impact. Innovative partnerships like these have the potential to unlock significant volumes of institutional capital and we are committed to continuing to work with the NWF and THFC to support the growth of the facility along with other future initiatives.”
Chancellor of the Exchequer, Rachel Reeves, said: “Growth to get more money in people’s pockets is my number one priority. This new partnership will unlock £150m in private investment and create further jobs, building on the 6,500 jobs already expected in the retrofit sector across the UK, so more people can get sustainable, high-quality, energy efficient social housing.
The National Wealth Fund is mobilising billions of pounds of investment in our world-leading industries, creating jobs and kickstarting economic growth, as we deliver on the country’s priorities in our Plan for Change.”
John Flint, NWF Chief Executive Officer, said: “This is another example of the NWF working collaboratively with the private and public sector to provide practical solutions to complex financing problems. The launch of a long-term, attractively priced, unsecured offer into the market by THFC, will accelerate uptake and increase the ambition of projects in retrofit. Our support for THFC builds on our work in the sector, helping mobilise long-term institutional capital like Rothesay’s into social housing retrofit which will give confidence to both the sector and associated supply chains.”
Priya Nair, THFC Chief Executive said: “As the largest provider of institutional capital to the social housing sector, THFC is committed to solutions that enable the industry to improve homes and create sustainable communities across the UK. Partnering with the NWF on this innovative approach to retrofit funding will bring significant benefits to the sector. The collaboration will help decarbonise the social housing sector and support the country’s net zero ambitions.”