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Green Loans Dry Up As UK Govt Ends Subsidies For Renewables

Peer2Peer Finance News

A dearth of renewable energy loans has been blamed on over-zealous lenders chasing “low hanging fruit” and an end to a government-backed subsidy programme.

In May, Assetz Capital closed its Green Energy Account (GEA) and in March, defunct P2P platform Trillion Fund paid off its final renewable energy loan. Both platforms have blamed a lack of new loans and an end to government subsidies for the failure of their green initiatives.

However, Bruce Davis, joint managing director of Abundance Investment, told Peer2Peer Finance News that most P2P lenders were disproportionately targeting lower-risk operational loans in the renewable energy space, and ignoring the opportunities in infrastructure and construction.

“In terms of operational assets, there is an abundance of money chasing too few deals at the moment,” said Davis. “The big money tends to go after the low hanging fruit which is operational assets. This means that it is challenging to compete for project tenders in this sector.”

According to Theresa Burton, chief executive of Trillion Fund, the end to government subsidies meant that Britain’s emerging wind and solar farms were unable to scale up to meet demand, and this is what caused deal flow to dry up.

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