Funding hospital energy efficiency improvements with SALIX

Written by

Cliff Green

Posted on

March 18, 2019

What is SALIX?

Salix offers interest-free loans to hospitals for energy efficiency improvements to ease strains on budgets but the process is necessarily complex.

This brief guide covers the detailed application procedures that have to be followed exactly to ensure that funding applications should not fail.

Salix is an independent, not-for-profit company funded by the Department for Business, Energy and Industrial Strategy and has worked with NHS Trusts and Foundation Trusts in England for 12 years.

What can SALIX funding be used for?

Funding is available for more than 100 energy efficient technologies including:

  • Boilers
  • Combined heat and power
  • LED and lighting upgrades
  • Heat recovery

How does SALIX work?

The funds can be used together with a variety of procurement frameworks and must be repaid in five years, through savings made on energy costs while costing less than £172 per tonne of carbon saved over the lifetime of the technology deployed.

Salix has the facility to develop long-term relationships by funding large scale, multi-million-pound projects and SaveMoneyCutCarbon can advise on and guide applications.

Salix loans are repaid over the five-year period with payments every six months and any project has to be completed within nine months from the commitment date with allowance made when projects have to be tendered after the loan agreement has been completed.

Two stage process

There is a two-stage process with first the application, project assessment and commitment to fund then project completion and payment of loan, unless there is an agreement to fund on an interim payment basis.

Stage or interim payments can be negotiated for large projects, given proof of need and if a project is not completed all payments made would need to be repaid immediately. Salix monitors project progress to ensure schedules are being met.

There will need to be exhaustive project assessment and project management to ensure exact planning and management as it is not possible to fund additional costs for projects where budget increases mean that they are no longer compliant with the scheme criteria.

Rules

It is crucial to keep on schedule as projects that are not completed within the time agreed would lose funding unless there were valid reasons for delays.

Salix rules preclude funding if a range of criteria are not met, which include any project that has started or where the full cost has already been negotiated from another source. Also, projects that are required by building regulations or by planning officers as well as those for commercial gain, other than cost reductions through energy efficiency, are not eligible.

There is a minimum value for any single project of £500 and a total minimum application and loan value of £5,000 with no maximum loan value.

Who is eligible for SALIX?

Funding is available for any hospital that receives who majority of its income directly from the public sector with the proviso that energy savings over the lifetime of the project are funnelled directly back to the public sector, which then gains a direct financial benefit.

For example, ineligible projects would include an estate management contract where an outsource supplier paid the energy bills and benefitted from savings. But if the energy bill was a pass through under the contract and the public sector benefitted, then the project would be eligible.

Public Sector Financing

We specialise in assisting public sector organisations to receive 100% interest free loans from Salix Finance for energy efficiency projects.

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