The International Green Building conference was held last month and our CEO Matthew Macdougall was invited by the Singaporean Government to present at the event.
Organised by the Building and Construction Authority of Singapore and into its eighth year, the conference played host to international green building experts, policy-makers, academics, built environment practitioners, tenants and end-users from around the world. It was originally established to achieve a shared vision of a greener planet through the green building movement.
Speaking on the concept of innovative financing, Matthew addressed the challenges that many organisations find, raising the capital to execute on their green ideals.
While many organisations aspire to ‘Building Green’ for many the opportunity cost of the capital required represents a significant barrier. Setting up a managed service arrangement instead of using capital was a fresh concept to many in the room.
A managed service agreement can be used in many situations including building upgrades. The replacements of chillers, BMS, VSD and LED lighting retrofits are great examples.
The following example gives just a small insight into the savings that can be made over an eight-year period.
|Annual Savings Power||$950,000|
|Annual Savings including Maintenance||$1,100,000|
|Greenhouse Gas Emissions Reduction kgCO2-e||70%|
|Project Cost (supply and installation)||$5,000,000|
|ZERO CAPITAL – An opex solution as a Managed Service|
|Year||Annual Savings||MSA Payment
If the government incentive funding is available to you the benefits can be far greater.
When this kind of structure is put in place there are many benefits.
- There can be a yield increase without the use of capital improving building valuation.
- The LVR can stay the same as you are adding a managed service and not more debt.
- You can improve the Green Mark Energy Rating of your building which can drive an overall improvement in your asset value and also help you retain key government and other core tenants.
Further benefits include:
- GMS-IPB Government co funding available (Early Adopters!)
- Fully de-risked performance and operations can be included via an EPC
- Significant reduction in greenhouse gas emissions
- Improved systems monitoring via BMSA and M&V process
- Tenant satisfaction and improved experience
Building green does not have to drain your capital. Leveraging managed services can accelerate your pathway to being green and improve the yield of your building faster.