Melbourne's "retrofitting revolution"
City of Melbourne, a C40 city, has embarked on an innovative financing effort for commercial building retrofits – an achievement supported from its inception by expertise across C40's network of staff, cities and partners.
In October, the city signed the first Environmental Upgrade Agreement under its 1200 Buildings Program, which helps commercial building owners improve the energy and water efficiency of their buildings, and implement distributed energy generation projects. Environmental upgrade finance gives commercial building owners better access to competitively priced capital heretofore unavailable for these kinds of projects; it also paves the way for owners to share the cost of retrofits with tenants. Scott Bocskay, Chief Executive of S ustainable Melbourne Fund, which administers environmental upgrade finance on behalf of the City of Melbourne, had this to say about the program:
“Building owners and occupiers can now access an innovative financial mechanism that enables them to unlock greater savings and improve competitiveness. Financiers now have a strong incentive to advance funds for retrofit works, with the ability to recover funds as a statutory charge providing them with certainty. The development of the environmental upgrade charge has created a new marketplace, underpinned by a new asset class.”
Building retrofits represent a huge opportunity to reduce greenhouse gas emissions in cities. In Melbourne, more than 50 percent of the city’s GHG emissions come from the commercial building sector. Across the C40 network, energy used in buildings represents an average of 45 percent of cities’ emissions. (Check out the C40 report from Arup for more information.)
“The City of Melbourne should be commended for its leadership in launching a program that seeks to address the massive challenge in financing energy upgrade projects in existing commercial properties. Energy upgrade finance represents a creative and elegant approach to helping owners fund these necessary building improvements” says Scott Henderson, Director of Finance at C40/CCI, who facilitated city-to-city knowledge sharing during the development of the program.
Chair of the Future of Melbourne (Eco-City) Committee, Councilor Cathy Oke, said the new program makes Melbourne a leader in this sector. “The retrofitting revolution has begun. The opening of this financial mechanism is a key step toward unlocking $2 billion in retrofit activity in the municipality of Melbourne,” she said.
And that leadership benefits city-dwellers. Melbourne’s Lord Mayor Robert Doyle sat down with the C40 News Team for an interview during this year’s summit in Sao Paulo, and had this to say: “We think we’re a great place to live and work and raise a family. What’s critical in that is sustainability.”
Read more about the Melbourne announcement here and visit C40's Private Sector Building Energy Efficiency Network and CCI’s built environment program to learn more about other innovative retrofit activities from around the world.