Mr. R. C. Mitchellasked the Secretary of State for Energy whether he can now give further details of the Government's energy-saving loan scheme announced in his statement of 9th December 1974 on energy-saving measures.
§ Mr. VarleyMy Department will provide up to £3 million in a year for the purpose of making loans to finance energy-saving projects for industry in Great Britain. The scheme will start immediately; any expenditure in this financial year will be covered by a Spring 247W Supplementary Estimate. The loans will be offered at a rate of interest equivalent to that available under the Industry Act 1972 for loans on broadly commercial terms. This rate is currently 13½ per cent. but it is kept under review and it is my intention that any changes in that rate would be applied to new loans offered under the energy-savings scheme. The maximum loan available for a single project will be £100,000, normally for a period up to five years. Subject to this maximum, the full cost to the firm will be eligible for loan assistance. Projects costing less than £10,000 will not be eligible.
In order to qualify for a loan the project will have to produce energy savings which would, at current prices, be sufficient to cover the capital sum and interest charges within four years, but the benefit arising from the investment is, of course, expected to continue thereafter.
Further information and guidance will be available from my Department on request.
The scheme will not apply to Northern Ireland. However, I understand that the introduction of a similar scheme is being examined by the Department of Commerce.