Frederikshavn: mobilising savings ‘sleeping’ on citizens’ bank accounts
Local banks in the city of Frederikshavn confirm that citizens have never had such large savings on their accounts as they have today. However, it is not easy to convince the households to make use of the money for energy renovation of their dwellings.
Indeed, as a side effect of the global financial crisis, house owners fear using or borrowing funds which is linked to uncertainty of their own economic situation in the near future. Moreover, stagnation of property values in the last 7-8 years does not create incentive for investments in private properties.
However, energy refurbishment of the housing stock has multiple benefits for the citizens and local economy and it is a key sector in which the municipality of Frederikshavn needs to act to become one of the first fossil free municipalities in Denmark – its long-term goal.
As to encourage energy renovation of dwellings, municipality has put in place the action plan consisting of the following measures:
- Establish partnership agreements between the municipality and local banks on setting up of soft loan schemes for energy renovation of private housing and its joint promotion. The municipality aims at creating competition between the banks and so encourage them to reduce the current interest rates of the loans available for energy renovation. The main argument the city is using is that the banks will not only develop a new business area for themselves but will also contribute to creation of new jobs for local craftsmen and manufacturers for the benefit of the local economy.
By now, cooperation has been established with 8 national banks’ branch offices located in the municipality: Nord Jyske Bank, Jyske Bank, Spar Nord Bank, COOP Bank, Danske Bank, Sparekassen Vendsyssel Bank, Nykredit Bank, Arbejdernes landsbank. The banks have demonstrated great interest in launching the soft loan scheme in cooperation with the municipality. The Coop Bank has already launched a 0% interest rate loan for energy renovation while other seven banks have agreed to offer a low interest rate loan for the renovation of private dwellings. All banks have signed a cooperation agreement with the Municipality of Frederikshavn.
- Provide technical assistance to home owners via a network of independent energy advisors (Better Home Consultants). The individual consultations result in a ‘Home energy report’ which is then taken into account by the partner banks.
- Train the financial advisors – employees of the partner banks – on benefits of energy renovation, improving their understanding of the ‘Home energy report’ developed by energy advisors, improving their ability to advise the customers on financial opportunities (soft loans) for energy renovation.
- Actively promote the soft energy loans through dissemination and publication of good customer cases related to energy refurbishment, a demonstration site of energy efficiency and renewable energy technologies, local media and local specialised communication materials.
- Enhance cooperation with other relevant stakeholders who share the municipality’s objectives such as real estate agents, craftsmen, construction companies and inform them about the soft loan scheme.
- Create synergies with existing local initiatives and tools (such as the website www.byggestart.dk) in order to get house owners engaged with the local craftsmen and national programmes such as the Danish mortgage program "wise m2“.
|Frederikshavn at a glance
||Frederikshavn (Denmark) has 23,000 inhabitants and takes its climate responsibility seriously. It has initiatiated a climate-friendly development project, called “Energy City Frederikshavn”. The project aims at creating a ‘100% renewable energy city’ and facilitate citizens’ access to sustainable energy, energy-efficient housing renovations and sustainable fuels for the local transport. Frederikshavn’s strategy is in line with the Covenant of Mayors’ energy and climate targets.|
|Who is implementing the soft loan financing scheme in Frederikshavn?
|How is the financing scheme implemented?
||Local Study & Action Plan / Market Study / Business Model|
|Who backs the scheme at the political level?
||City Council Decision on the establishment of the financing scheme (expected in Dec. 2015)|
|Pilot Sustainable Energy Measures to be implemented via the scheme
||List of measures (expected in Feb. 2017) |
More information about Frederikshavn