Investing In Infrastructure To Solve Societal Challenges
4 May 22
4 May 22
At COP26 last year, the world witnessed a cascade of testimonies from scientists and leaders alike, calling for urgent action to be taken by both the public and private sector to help mitigate the growing effects of climate change. The UK government, which hosted the conference, is aiming through its Green Finance Strategy (GFS) and Greening Finance policy paper to mobilize both the public and private sector to fund a green growth revolution that will in turn transform the UK into a global leader at the forefront of combating climate change. For the government to realize its ambitions, and meet the carbon emission targets laid out at the conference, it is evident that the green transition must involve local and regional authorities.
However, this places an immense financial burden on local government who are already under increasing pressure to deliver on transitioning local services away from fossil fuels whilst having their budget squeezed by inflationary pressures and the economic fallout from the pandemic. The money to finance these key projects is sometimes simply not available. The solution to this challenge is not letting local government face this daunting task alone. This requires that non-bank lenders continue playing a pivotal role in ensuring that the much-needed funding required for this transition is delivered in an efficient and targeted manner.
The Task of Transitioning to Electric Vehicles
Take the issue of electric vehicles (EV) for example. The success of the governments target to move towards the widespread use of electric vehicles to provide essential services across the country will ultimately be dependent upon the capacity of regional bodies such as local councils to deliver on this goal. Whilst creating a comprehensive charging network for electric vehicles is a major part of this policy drive, council fleets will play a significant role as local bodies try to set a green example for others to follow. Recognizing that the future of travel is electric, councils across the UK have indeed started devising EV transition strategies. However, so far reports show that 19% of councils do not have an EV strategy, while 37% have not made significant progress on their action plans.
Although it is easy to blame local government bodies for this lack of progress, this would be unfair. The reason for this lack of progress can simply be attributed to a lack of finance. Budgetary constraints tie the hands of key local bodies trying to acquire EV’s. With a high initial cost related to converting a fleet of specialist petrol or diesel vehicles to EV, making these investments can be both difficult to justify and achieve with limited financial capacity. If councils are to effectively help central government in pushing for a greener future, non-bank lenders will have to step in with leasing plans to help councils spread the cost more effectively.
The Role of Non-Bank Lenders
Non-bank lenders already play a pivotal role in helping to alleviate financial pressures from local councils and public sector organisations, and many of these lenders have over a decade's worth of experience working with councils and other regional governmental bodies. Through basing this relationship on a mutual understanding of the challenges the public sector faces in transitioning towards net-zero technology, non-bank lenders understand what councils need and how best they can assist in delivering on their sustainable vision for the future.
Flexible and Tailored Leasing as a solution
At Triple Point, we take a flexible approach to accommodating the needs of each local authority. Understanding that environmental technology such as EVs are in a state of constant evolution, our operations are designed to react quickly to these changes and offer tailored solutions and flexible leasing terms which ensure that public sector operations face minimal disruption and are in-step with the latest technological developments.
Working alongside local governmental organisations, our Public Sector Leasing division has financed large numbers of vehicles and assets to local bodies with a combined worth of £380m since 2007. From funding PPE making machines for NHS trusts, to providing modular buildings and equipment to schools, Triple Point’s diverse portfolio and expertise in the public sector continues to support local organisations with the financial tools needed to benefit from updated assets and technology.
Financing vehicles for local authorities already plays a significant role in our portfolio and supplying councils with EVs for the green transition is set to be a growing area of importance for Triple Point as the transition away from fossil fuels gathers momentum.
It is clear the path to a successful green transition in the UK will have to involve local government, and in the coming years, it will be paramount that councils have the support and expertise of non-bank lenders to ensure that the UK fulfils its ambitions to become a global leader in combating climate change.
This article was written by Triple Point's Caroline Davis and originally published in Environmental Finance.
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