- First banks to take future earnings from AD and hydro projects into consideration when assessing funding
- Up to 30% of future earnings from Anaerobic Digestion and Hydro technologies will now be taken into account
NatWest and the Royal Bank of Scotland have extended their support for renewable energy projects – becoming the first banks to take future earnings from AD and hydro projects into consideration when assessing funding.
The banks, which have supported renewable energy projects including solar and wind for a number of years, will now take into account up to 30% of future earnings from Anaerobic Digestion and Hydro technologies.
The announcement comes ahead of the Anaerobic Digestion and Bioresources Association conference (ADBA) in London today (Tuesday).
Ian Burrow, Head of Agriculture and Renewable Energy at NatWest and RBS, said:
AD and Hydro technologies represent a huge opportunity for renewable energy in the UK.
With energy costs continuing to rise and a growing pressure for businesses to become more efficient, they are continuing to look at whether renewable energy technologies would work for them.
I’m delighted that we are the first banks to be able to take this step for those considering AD and Hydro projects – and hope we can help support businesses in making these projects a reality.
The bank hopes that the new policy will allow businesses to achieve funding through the additional projected income of the energy provided by AD or Hydro projects being taken into account.
Chief Executive of the Anaerobic Digestion & Bioresources Association, Charlotte Morton, said:
The banking community should be the prime lender for rural businesses, however, before RBS’s announcement today, AD developers were required to service the interest on £1-3 million of debt from existing incomes. This has been a real barrier to the development of on-farm AD.
We’re delighted that RBS is leading the way in taking positive steps to address the challenge of funding on farm AD projects in particular. RBS’s pioneering approach will ensure that more farmers are able to benefit from the generation of renewable energy and biofertiliser through AD. This will help agricultural businesses diversify revenue streams, reduce input costs, improve soil quality and cut carbon.
Director of Compass Renewables, ADBA’s finance arm, Bruce Nelson, added:
As ADBA’s independent financial consultant, I’ve encountered countless individuals who were unable to service the debt from their existing farm income despite having an excellent AD business plan and the ideal fit of AD technology with their farm business model. This new approach will open up many more possibilities for on-farm AD.