Sustainable Development Capital (SDCL) will be responsible for managing the fund for firms operating in public and commercial sectors.
The fund has secured first close of €35m with a capital commitment of €17.2m from the Irish Government, together with a combination of private sector capital from London & Regional Properties (€12.8m) and Glen Dimplex Group (€5m).
About €300m leveraged funding is expected to be delivered over the next three years based on a fund size of €70m.
Tesco Ireland will be the first company to avail the €2m fund as part of a significant retrofit programme.
Under the programme, Tesco’s technology partner DCS Electrical will retrofit an initial seven Tesco stores with a follow-on funding commitment for up to 40 stores nationwide.
The project to replace existing lighting across seven Tesco stores with high-efficiency LEDs would led to the creation of 16 new jobs at DCS and deliver estimated average annual energy savings of over €540,000.
SDCL founding partner and CEO Jonathan Maxwell said, "There is pent up demand in the market for investment in energy efficiency projects but this has been inhibited by a lack of funding from conventional sources."
"The Fund is taking an innovative approach by basing its investment return on the energy cost savings expected to be achieved by projects," Maxwell added.
"Improving energy efficiency not only delivers cost savings but frees up capital for other operational activities, allows for future-proofing against possible energy price increases, increases resilience and can improve asset values. This is important for Ireland’s future competitiveness."
Tesco Ireland finance director Adrian Lewis said, "This is a commercial arrangement in which Tesco’s technology partner DCS Electrical accesses this fund and Tesco repays DCS based on energy efficiency savings delivered."
"With sustainability at the heart of our business model, whether that be crop production, transport or store operations, this innovative fund will help us achieve our goal of becoming a Zero-carbon business by 2050 and of being half way there by 2020," Lewis added.
"Working with Irish technology companies, promoting local employment in energy efficiency and, unlocking energy saving will help us better support the communities we operate in."
