June 23, 2014 / 12:01 PM / 5 years ago

France launches financing plan for energy transition

PARIS (Reuters) - France announced on Monday a package of tax breaks and low-cost loans to improve insulation in buildings and boost investment in renewable energy, which is supposed to provide 40 percent of the country’s electricity by 2030.

French Ecology, Sustainable Development and Energy Minister Segolene Royal (R) and Finance Minister Michel Sapin speak to the journalists after a conference about the financing of energy transition in Paris June 23, 2014. REUTERS/Benoit Tessier

The state will provide financial help for citizens and firms, and back local authority projects with 5 billion euros of credit, Energy and Environment Minister Segolene Royal and Finance Minister Michel Sapin told a news conference.

“With this plan we will protect the environment and we will create jobs,” Royal said.

Renewable energy currently accounts for 14 percent of France’s electricity.

Homeowners will be allowed to deduct 30 percent of the cost of thermal insulation from their taxable income, with a maximum of 16,000 euros per couple. The government will also simplify access to zero percent loans for renovation work, at the moment only used for about 33,000 projects per year, the ministries said.

Public investment bank BPI France will set up a guarantee fund distributed by commercial banks for small-and medium sized companies specializing in thermal insulation and building renewable energy installations.

“The energy transition is a long-term investment, but it is a profitable investment and therefore it will find financing,” Sapin said.

The government will make it easier for people to equity stakes in renewable energy installations such as wind turbines and solar plants that they live close to, and for smaller renewable energy projects to be funded with ‘green bonds’.

To support local authority investments, the state and state-owned financial institution Caisse des Depots (CDC) will provide 5 billion euros worth of loans at low interest rates.

The ministry also said that the European Investment Bank has committed to a 1 billion euro loan for thermal insulation projects in schools, for which it will work with banks Credit Agricole and regional bank BPCE.

Reporting by Geert De Clercq,; editing by John Stonestreet

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