For the first time in the Australian market, retail investors will have access to green bonds following a tie-up between Australian peer-to-peer lender RateSetter and the government’s Clean Energy Finance Corporation (CEFC).
The new peer-to-peer green loan platform, which was brought to life with a $20 million investment by the CEFC, will provide businesses and individuals with more affordable funding for the purchase of different types of clean energy systems, including solar panels and battery systems, energy efficient lighting (LED), energy efficient heating and cooling systems, emissions reducing industrial applications, low-emission/electric vehicles and light trucks.
“This innovative facility offers the potential to improve the marketability of green assets, by bringing purchasers, installers, and manufacturers closer together. There have been green loans before, and there has been peer-to-peer lending, but combining the two into one platform is an Australian first,” CEFC CEO Ian Learmonth said.
RateSetter expects rates for investors and borrowers in the green loan marketplace to be around 7% per annum, with the majority ranging between three and seven years.
“This is a truly innovative partnership that showcases the exciting opportunities for both businesses and consumers when Government agencies such as the CEFC team up with the fintech sector. We are delighted to have the CEFC’s financial involvement to develop this initiative to support the uptake of clean energy in the home, on the road and in the running of Australian businesses,” said Daniel Foggo, CEO of RateSetter.
It is expected that that thousands of everyday Australian investors seeking strong, stable returns, while improving the country’s ecological footprint, will participate in funding green loans via the marketplace.
“For the first time, everyday investors have direct access, alongside the CEFC and other investors to stable, attractive returns from a green asset-class, while green borrowers are rewarded with great rates. This highlights the enormous opportunities that can result when innovative businesses and Government organizations such as the CEFC work together,” Foggo added.
In addition to strong interest from retail investors, RateSetter is expecting the new marketplace to generate interest from larger investors including ethical superannuation funds.