Mayor of London issues £90m green bond programme to unlock £500m to combat energy crisis

The GLA estimates that more than one million tonnes of carbon savings could be generated over the lifetime of the projects

The £90m investment would form part of a green finance drive in the capital that would ultimately generate £500m in green bonds.

The funding would be spent on projects that improve the energy efficiency of social housing and public buildings, as well as local energy projects that integrate, solar and low-carbon heating.

The Mayor has committed £90m in GLA funding, with £4m set aside for the public and private sector and the remaining £86m to launch the green bonds programme.

The GLA estimates that more than one million tonnes of carbon savings could be generated over the lifetime of the projects, while energy usage would be reduced by 328,638 MWh a year, the equivalent to the energy used by nearly 85,000 homes in a year.

The Mayor of London and chair of C40 Cities, Sadiq Khan, said: “I’ve committed to making London net-zero by 2030, faster than any other comparable city. We are facing a pivotal moment in our efforts to tackle the triple dangers of toxic air pollution, climate change and congestion to the health of Londoners and wider society. I also want London to be a zero-pollution city and have expanded our Ultra Low Emission Zone to cover all of inner London so that far fewer children have to grow up breathing toxic air.

“I have been clear that climate action and our economic recovery must go hand in hand. This will require record investment and coordinated action from everyone – cities, businesses, national governments and communities – to truly turn the tide. That is why I am leading the way by committing £90 million to help unlock more than £500 million of private investment through green bonds to support low carbon projects and create the green jobs that will help make our target of a zero-carbon capital a reality by the end of this decade.”

The announcement comes ahead of the publication of the Mayor’s Budget for the Greater London Authority (GLA) Group for 2022-23 on Wednesday (16 February). The final Budget will account for the fact that council tax and business rates returns are higher than originally forecast.

London’s calling

Late last year, Sadiq Khan unveiled a £51m programme to tackle fuel poverty for households in the capital in early 2022. The funding has been issued as part of a “retrofit revolution” to improve the energy efficiency of homes in the city. More than £40m has been secured from the £40.2m in Sustainable Warmth funding from the Government. The Mayor’s office believes that the funding will help upgrade 3,200 fuel poor homes from Spring 2022.

The upgrades will be delivered through the Warmer Homes scheme that offers grants of up to £20,000 for heating, insulation and ventilation improvements. Low-income homeowners or those who rent privately are eligible to apply for the upgrades.

The rest of the funding will come from the Warmer Homes Programme with investments of £2.6m from City Hall and £8.5m from the government which will support emergency heating replacements and repairs.

London’s overarching climate ambition is to reach net-zero by 2030 – two decades ahead of the UK’s national legal deadline. The vision forms part of a Green New Deal framework. 

Khan had originally set a 2050 net-zero deadline, before the national target was set, but brought this forward in recognition of the capital’s contribution to national annual emissions and its ability to act as a hub for sectors including solar and green finance. Indeed, London has repeatedly been named by CDP as a climate ‘A-list’ city.

With housing and business buildings responsible for 78% of the capital’s annual operational emissions, and with London experiencing the third-highest level of fuel poverty in the country, it is clear to see why the built environment is the focus of the new schemes. A ‘Zero-Carbon Home’ standard was introduced in 2016 and mandates all new build homes to reach net-zero operational emissions by 2025, but most of the buildings which will be standing in the capital in 2030 already exist.

Matt Mace