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'New dawn' for housing finance
28/09/2009
Scottish Housing Associations are to benefit from access to a £50 million European lending facility, the Scottish Government and the European Investment Bank announced today.
Housing and Communities Minister Alex Neil said gaining access to alternative sources of funding at competitive rates signalled a 'new dawn' in Scotland's ability to attract and access European investment.
The fund will offer housing associations an alternative private lending source helping to support new affordable home developments and jobs in the house building sector.
The Minister met the Vice President of the European Investment Bank (EIB) in Brussels today to shake hands on the deal and scope out opportunities for making available European lending in other areas.
Mr Neil said:
"My number one priority is to deliver a good deal for the housing sector and find innovative ways to support it during tough economic times.
"Opening up access to a European fund of this size will give Housing Associations access to another lending source, with competitively priced loans.
"I believe this signals a new dawn in Scotland's ability to attract and access European investment. There is also a real opportunity to replicate this success across other areas and provide a boost for Scotland's economic recovery.
"As a priority, I am strengthening Scotland's relations with the EIB and helping to build fruitful relationships between the bank and Scotland's Housing Associations."
Chief Executive of The Housing Finance Corporation Piers Williamson said:
"We welcome this opportunity to greatly extend our existing Scottish commitment and look forward to working with a broad range of Scottish Housing Associations over the coming months to help them deliver new housing in the communities they serve."
As well as helping housing associations to access new sources of lending, the Scottish Government will invest more than £1.65 billion over three years in affordable homes across Scotland, and is on track to build 8,100 homes this year.
Another £50 million is being invested to reverse decades of decline in council house building. So far, 17 councils are benefitting from the largest council house building programme for 30 years with over 1,300 new council homes planned across the country.
The EIB funds will be provided to Housing Associations through The Housing Finance Corporation (THFC). THFC is an independent, specialist, not-for-profit finance company that makes loans to over 120 regulated Housing Associations, throughout the United Kingdom.
The EIB is the long-term financing institution of the European Union, providing loans for projects that help EU economic objectives. These include supporting construction and upgrading of transport infrastructure in urban areas, and improving international links. Other examples include investment in projects that combat climate change and protect the environment, ensure secure energy supplies as well as human capital (such as hospitals, schools and universities) and in technological development and SME's. The EIB is owned by the 27 EU Member States.