Frederikshavn, Denmark: Mobilising savings ‘sleeping’ on citizens’ bank accounts

Local banks in the city of Frederikshavn confirm that citizens have never had such large savings on their accounts as they have today. However, it is not easy to convince them to make use of the money for energy renovation of their houses.

Indeed, as a side effect of the global financial crisis, house owners are reluctant to using or borrowing funds as a result of the uncertainty they feel towards their own economic situation in the near future. Moreover, stagnation of property values in the last 7-8 years does not create incentive for investments in private properties.

However, energy refurbishment of the housing stock has multiple benefits for the citizens and local economy and it is a key sector in which the municipality of Frederikshavn needs to act to become one of the first fossil-fuel free municipalities in Denmark – its long-term goal.

As to encourage energy renovation of dwellings, the municipality has put in place an action plan which includes the following measures:

• Establishing partnership agreements between the municipality and local banks on setting up soft loan schemes for energy renovation of private housing and its joint promotion. The municipality aims to create competition between the banks to get them to reduce the current interest rates of the loans available for energy renovation. The main argument the city is using is that the banks will not only develop a new business area for themselves but will also contribute to creating new jobs for local craftsmen and manufacturers.

By now, cooperation has been established with eight national banks’ local offices: Nord Jyske Bank, Jyske Bank, Spar Nord Bank, COOP Bank, Danske Bank, Sparekassen Vendsyssel Bank, Nykredit Bank, Arbejdernes landsbank. The banks have shown great interest in launching the soft loan scheme in cooperation with the municipality. The Coop Bank has already launched a 0%-interest rate loan for energy renovation while the other seven banks agreed to offer a low-interest rate loan for the renovation of private dwellings. All banks signed a cooperation agreement with the municipality of Frederikshavn.

• Providing home owners with technical assistance via a network of independent energy advisors (Better Home Consultants). The individual consultations result in a ‘Home energy report’ which is then taken into account by the partner banks.
• Training financial advisors – employees of the partner banks – on benefits of energy renovation, improving their understanding of the ‘Home energy report’ developed by energy advisors, improving their competences in advising the customers on financial opportunities (soft loans) for energy renovation.
• Actively promoting soft energy loans through dissemination and publication of good customer cases related to energy refurbishment, a demonstration site of energy efficiency and renewable energy technologies, local media and specialised communication materials.
• Enhancing cooperation with other relevant stakeholders who share the municipality’s objectives such as real estate agents, craftsmen, construction companies and inform them about the soft loan scheme.
• Creating synergies with existing local initiatives and tools (such as the website www.byggestart.dk) in order to get house owners engaged with the local craftsmen and national programmes such as the Danish mortgage program “wise m2”.