Australia’s first peer-to-peer green lending platform, RateSetter’s Green Loan marketplace, has been brought to life with a $20 million investment commitment from the Clean Energy Finance Corporation.
The online platform brings together investors, borrowers and clean energy product providers who have a shared interest in low emissions, energy efficiency and renewable energy projects.
It will allow investors to lend directly to creditworthy borrowers looking to buy or install an approved “green” product. Through the online platform, investors can nominate the amount they wish to invest, the interest rate they are prepared to accept, and their request can then be matched to approved borrowers. Borrowers can access finance to invest in eligible clean energy assets.
CEFC CEO Ian Learmonth said: “This innovative facility offers the potential to improve the marketability of green assets by bringing purchasers, installers and manufacturers closer together. There have been green loans before, and there has been peer-to-peer lending, but combining the two into one platform is an Australian first.”
The launch marks the first investment by an Australian government body with an Australian peer-to-peer lending platform.
RateSetter expects interest rates for investors and borrowers of around 7.0% at launch with the majority of loans between three and seven years duration.
The new market will fund individual and business loans for solar panels and battery systems, energy efficient lighting, energy efficient heating and cooling systems, emissions reducing industrial applications and low-emission/electric vehicles and light trucks.
CEFC debt markets lead Richard Lovell said, “The facility will create a real opportunity for retail investors to have access to a regulated ‘green loan’ product for the first time in the Australian market. Investment in this transaction could establish a successful precedent to pave the way for a rollout of similar green platforms.”
RateSetter is expecting the new marketplace to generate interest from retail investors and larger investors including ethical superannuation funds.
The launch follows the Global Sustainable Investment Review, released in March 2017, which reported that the total invested in funds with social or green investment principles grew from $US148 billion to $US516 billion across Australia and New Zealand between 2014 and 2016.