Major Green Deal finance provider to offer loans to businesses "in six to nine months"

However Mark Bayley, chief executive of the Green Deal Finance Company (GDFC), told GreenWise that it would be "another six to nine months" before it would begin offering finance plans to small businesses. It is currently only bankrolling plans taken out by residential customers.

The Green Deal, the framework for which was established  by the Energy Act 2011,  allows property owners and occupiers to fund the installation of energy efficiency measures such as secondary glazing or insulation at no up-front cost. Repayments will be met through a charge on the electricity  bill for that property. The scheme became fully operational on 28 January this year, when the first finance packages were made available.

The GDFC is a not-for-profit membership organisation set up to facilitate low cost Green Deal finance. It will offer finance at the same rate to every registered Green Deal Provider, to cover the costs of installing accredited energy efficiency measures in properties. Although businesses can already access finance from registered Green Deal Providers, it will be harder for them to shop around for plans and rates of credit will likely vary.

"It is disappointing to see that despite the launch on 28 January 2013 of the financial aspects to support the Green Deal that the GDFC does not have its commercial offering in place," said environmental expert Linda Fletcher of Pinsent Masons, the law firm behind Out-Law.com. "Green Deal Providers are able to offer Green Deal plans from other sources, but it does perhaps mean that at this stage there will be less competitive rates available until the GDFC product becomes available in 6-9 months time."

"What is encouraging though is that the European Commission has now given state aid approval for up to £600 million of public funding for the Green Deal on the basis that the scheme could make a significant contribution towards delivering the common objective of improving energy efficiency and so the Green Investment Bank will hopefully be able to now start playing a role in the scheme."

The Government-backed Green Investment Bank (GIB) began providing finance to private sector projects related to environmental preservation and improvement last year. The Government has committed to funding the GIB with £3 billion over the period to 2015. Earlier this week the European Commission has approved the use of £600m of public funding for the Green Deal under its state aid rules, which are designed to prevent national governments giving favoured treatment to some businesses..

"The UK Green Deal allows consumers and businesses to improve the energy efficiency of their buildings without making huge upfront investments," said Commission Vice President Joaquín Almunia. "This is another example of how our policy of state aid control can support private investment in energy saving and enhance competition at the same time."