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New finance mechanism to deliver better, greener buildings

A new finance mechanism in South Australia can help boost the performance of buildings, create green jobs and generate cost savings, says the Green Building Council of Australia (GBCA).

The GBCA applauds the South Australian Government’s introduction of Building Upgrade Agreements legislation, as part of a $1.9 million election commitment to drive investment in sustainable commercial buildings in the state.

“We applaud the Weatherill Government for addressing the environmental performance of the state’s ageing buildings.  This new legislation will help deliver both economic and environmental benefits, reducing emissions and energy costs, while also improving occupant health and wellbeing, providing employment and securing the long-term sustainability of building assets,” says the GBCA’s Chief Operating Officer, Robin Mellon.

“One of the GBCA’s advocacy priorities is for governments to encourage and enable the upgrade of existing buildings through financial and non-financial incentives.  This new legislation will pave the way for smarter, more sustainable buildings,” Mr Mellon says.

The Building Upgrade Finance mechanism enables finance to be tied to the property, rather than the property owner, with loan repayments collected via a local government charge levied on the property and passed on to the financier.  This addresses the ‘split incentive’ barrier, in which tenants gain the benefits of an upgrade, while building owners bear the costs.

“Access to affordable finance options is an issue for many building owners. Without access to grants, tax relief or alternative financing options, many building owners find it too difficult to invest in building upgrades.  This new measure will enable South Australia’s property industry to unlock the energy efficiency potential in their buildings.

“Building upgrades make economic and environmental sense, and we congratulate the South Australian Government for making it easier for them to happen,” Mr Mellon concludes.