Peer-to-peer green lending platform

Challenge

Scaling-up investment in renewable electricity is critical for reducing greenhouse gas emissions from the power sector. Despite increasing cost-competitiveness of the technologies, policy and market fragmentation is hampering the financing of such projects.

Innovation

Australia’s first peer-to-peer green lending platform, RateSetter’s Green Loan marketplace, makes it easier for investors, borrowers and clean energy providers to do business in the clean energy field by reducing market fragmentation. 

It is an online platform, which brings together investors, borrowers and clean energy product providers with a shared interest in low emissions, energy efficiency and renewable energy projects, to conclude deals that benefit both parties.

It allows investors to lend directly to creditworthy borrowers looking to buy or install an approved “green” product. Investors can specify the amount they wish to invest and the interest rate they are prepared to accept. Their request can then be matched to approved borrowers who seek finance to invest in eligible clean energy assets such as solar panels and inverters for rooftop installation or energy efficient and low emission equipment such as power factor correction, voltage optimisation or LED lighting.

Action

20 million AUD funding has been provided by the Australian Government, through the Clean Energy Finance Corporation to develop the platform. The platform will increase the flow of finance into the clean energy sector through RateSetter’s retail lender base, which will now have access to borrowers via the peer-to-peer loan product.

Potential

The facility creates an opportunity for retail investors to have access to a regulated “green” loan product for the first time in the Australian market and may establish a precedent for the rollout of similar investment platforms.

Useful links

https://www.cefc.com.au/media/files/cefc-commits-$20-million-to-australian-first-peer-to-peer-green-lending-platform.aspx

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