Greener green valleys - Corporate Financier, March 2024

Fund Manager
Business planning and strategy
Growing a business

We share relevant third-party stories on our website. This article was first published by Corporate Financier magazine on 12th March 2024.

With its Green Business Loan Scheme, the Development Bank of Wales is supporting businesses in the transition to net zero. The bank’s Nick Stork highlights the role of accountants in developing resilient business strategies.

At the Development Bank of Wales, our experience as a UK regional impact investor shows that the most successful businesses are those that take a holistic view of their social and environmental impacts. 

That is why our Green Business Loan Scheme was designed to provide practical support and investment for Welsh businesses, to help them address the energy and climate challenges they face.

Identifying and implementing sustainable practices can be daunting for some business owners – ‘a problem for another day’ – but the benefits of long-term investment planning are profound. There is evidence of improved efficiency and competitive advantage leading to productivity gains and growth. Likewise, by accounting for related risks within business operations earlier rather than later, businesses can reduce their impact and make the required adjustments.

Chartered accountants play a crucial role in businesses of all sizes as they embark on developing business plans to meet and align to societal goals such as net zero. From baselining carbon emissions to modelling the potential gains from energy-efficiency projects such as installing solar power and heat pumps, there are significant steps businesses can take to lower carbon emissions and these need to be costed and planned.

At the Development Bank, we’re working with businesses and accountants in Wales to demonstrate the value of funding models that are helping businesses to develop transition plans and lock in long-term benefits. We’re also proactively providing access to consultancy advice, including sustainability advisers at Business Wales, and encouraging more businesses to take this up. It’s this innovative combination of support that makes a real difference in the market and we’re looking forward to seeing more funders take this approach.

Green offering

We manage a range of funds that can provide debt and equity solutions to Welsh business up to £10m. These funds include the Welsh government- backed Green Business Loan Scheme (GBLS), which offers loans from £1,000 up to £1.5m. This fund has a discounted interest rate, 12-month capital repayment holiday and provides patient capital to support businesses undertaking energy-efficiency and decarbonisation projects.

The scheme also provides access to fully and part-funded consultancy support so the business can get the right guidance and input on its plan. Limited companies, sole traders or partnerships can apply for funding through the scheme, subject to being based in Wales and trading for at least two years with at least one set of filed annual accounts.

Typical projects that are eligible for funding through the GBLS include the replacement and management of low-carbon technology for heating, ventilation and air conditioning, the installation of building fabric improvements, and investment in renewable energy and projects that help to reduce waste and water usage.

As an impact investor with a social and environmental purpose, Wales’s potential is at the heart of our decision-making. As such we are a proud signatory of the Principles of Responsible Investment – the UN-supported list of six actions for incorporating ESG issues into investment practice.

We are committed to transparency and ensuring that our investments deliver their intended impacts. As you would expect, we carry out thorough internal and external due diligence as part of the application process, monitoring investment impact including CO2 reductions and cost savings along with the wider contribution to a green economy in Wales.

You can read more about the businesses we have supported in our case studies here.