Co-op freezes renewables lending
The UK's Co-operative Bank has been forced to freeze renewable energy lending as one of a number of measures designed to ease growing concerns over its capital position.
The Co-operative’s lending has included large-scale renewables, energy efficiency, as well as small-scale onshore wind projects.
The self-styled ethical bank, which has stopped lending to all new business ventures, emphasises it has not abandoned the pledge first made in 2007 to provide £1bn ($1.5bn) of funding to a range of green projects. By February it had made in excess of £700m in loans to renewables ventures.
However, the freeze on new lending means that the bank may well fail to hit the target this year. It says it will honour existing loan commitments but new ones will not be forthcoming.
The Co-operative hit the headlines earlier this year when it said it would no longer offer new loans to business customers. Ratings agency Moody’s slashed its debt rating to junk status and warned that it could need a government bailout to cover a funding shortfall.
The bank insists it has not completely closed the door to renewable energy projects. It revealed a rescue plan in June that it said would help plug the gap, which included floating on the stock market for the first time in its history.
In a statement about its stalled lending to renewables, the bank says it “has been an enthusiastic supporter of renewable energy projects for many years, including many important community schemes.
“We have recently put new corporate lending on hold for the time being, while we finalise the new medium-term business plan for the bank which will set our focus on remaining a core relationship bank serving retail and small and medium-sized enterprise customers.
“In the meantime, we are continuing to honour all our existing commitments already given to schemes that are both operational and under development.”