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EDF, E.ON May Turn U.K. Green Loans Into Securities, Huhne Says
2010-09-15 15:04:25.497 GMT
By Alex Morales
Sept. 15 (Bloomberg) -- Centrica Plc's British Gas unit,
Electricite de France SA and E.ON AG may be allowed to package
loans for home insulation and sell them as securities, U.K.
Energy and Climate Change Secretary Chris Huhne said today.
Britain's six largest energy providers, which include RWE
AG's Npower unit, Scottish and Southern Energy Plc and Iberdrola
SA's Scottish Power unit, will be expected to finance loans to
homeowners under the government's "green deal" legislation,
Huhne told a panel of lawmakers today.
The loans will pay to insulate homes and will be repaid by
customers through savings on their energy bills, Huhne told the
cross-party Energy and Climate Change Committee today. When
enough loans are made, the companies will be able to remove them
from their balance sheets via securitization, he said.
"As the scheme grows and as the numbers of people involved
grow, it will be possible to package up the green-deal loans,"
Huhne said in testimony that was webcast. The energy providers
can get the loans "off their balance sheets and into the
market," he said.
Huhne said he plans to have a draft law before Parliament
in November, and his department previously said the insulation
loan would be available to all householders starting in 2012. He
also said that Kingfisher Plc's B&Q home improvement chain is
a "potential new entrant" in offering green-deal loans.
"At the moment the securitization market is looking pretty
lame, but I think by the time we've got the legislation through
and by the time the thing is picked up, I'm pretty confident
that that route will be open and that there will be a relatively
limited need for the companies involved to take the loans on
their own balance sheet," Huhne said.
For Related News and Information:
Climate-change news: NI CLIMATE <GO>
Top environment stories: GREEN <GO>
Most-read environmental news: MNI ENV <GO>
Renewable Energy Stories: NI ALTNRG <GO>
--Editors: Mike Anderson, Alex Devine.
To contact the reporter on this story:
Alex Morales in London at +44-20-7330-7718 or
amorales2@bloomberg.net.
To contact the editor responsible for this story:
Reed Landberg at +44-20-7330-7862 or landberg@bloomberg.net.
