Ghent gives 13 million euros in low-interest loans for energy renovations

Interest rates could go as low as 0% for the most disadvantaged families

The City of Ghent will be providing low-interest long-term loans to its citizens. The advantageous funding amounts to 13 million euros and is meant to facilitate the energy transition of households and the city as a whole. The new system is expected to start operating from next spring.

Working for a climate-neutral city

The residents of the Flemish city are in great need of energy loans as half of them lack the financial means to invest in climate renovations. This is what a study by Professor Johan Albrecht from the University of Ghent and the Agoria Industry Federation have concluded. Based on their findings and on the need to improve the quality of life of local residents, the city administration decided to launch a rolling fund with advantageous loans, open to everyone who needs them.

The funds can be used for a variety of energy-saving measures, needed to transform any home into a comfortable and energy-efficient place to live in. This could include insulation, efficient heating and cooling, solar panels, batteries and reuse of rainwater. Works on plumbing, electricity and moisture control will also be eligible under the new financial scheme.

Loans will be given for up to 20 years at an interest rate that does not exceed 1.25% per year. Furthermore, for the households with the lowest incomes, the rates can go as low as 0% for the first five years. The system is designed so that the loan repayment does not exceed the amount of the monthly savings from energy efficiency.

The city is aiming for 1400 loans for the period of 2021-2025 with a total amount of 13 million euros. The new system is meant to replace the existing premium system, in which the premiums deplete the fund instead of rolling back to it and being constantly available. The authorities further point out that the new loans are complementary to the energy loans provided by the Flemish government and are more flexible as they cover all income groups.

Finally, each loan comes with a bonus of renovation assistance where an expert supervisor will propose a plan of action tailored to the house and the residents. Such plan lists the most urgent measures and a long-term proposal combined with suggestions on how to achieve an immediate reduction of energy bills.

The rolling fund is part of the Ghent Climate Plan 2020-2025 and the efforts of the Belgian city to become climate neutral by 2050.