What was the climate opportunity or challenge the business faced?
Climate and sustainability considerations are a core part of Archwood Group’s business agenda. Renewable energy sources are already used to power its factory, it manages waste to achieve minimal/close-to-zero landfill and only purchases from renewable sources.
The company was keen to invest in solar panels to increase its energy resilience while mitigating the increasing costs of energy. Archwood estimated that it could generate c.40% of its total energy consumption at its Chirk site from the installation of the solar panels, providing significant annual savings and becoming more energy self-sufficient.
Further ambitions include eliminating all carbon emissions from fuels consumed at all operational sites and its internal HGV fleet by 2030, as well as achieving zero carbon emissions and the ability to generate 100% of its own energy requirement by 2030.**
How did NatWest Group help?
We were able to support Archwood Group in its solar investment, through NatWest Group’s asset finance arm Lombard, by funding the investment from the initial order through to completion and commissioning.
In particular, the supplier of the system had specific payment terms (as is usually the case with solar investments) where there were multiple (six) 'stage' or part payments commencing from order through to production, supply and commissioning over a six-month period.
Lombard was able to fund these stage payments via a pre-inception facility, whereby it provided the cash flow funding required to cover each interim payment. These required no capital repayments from the customer following each supplier instalment, until the system was installed and commissioned.
At that point Lombard then converted the pre-inception loan onto a Lombard Green Energy-Supported Lease Purchase Facility – a facility that meant the company could capitalise the investment and repay over a period that mirrored the expected payback period. Using the pre-inception and then Lease Purchase products meant we could support the project through its full cycle on a competitive basis with the customer benefiting from our flexible product offering and market expertise.
* Archwood Group Sets New Carbon Reduction Plan in Place | Atkinson & Kirby (akirby.co.uk)
** Archwood Group Sets New Carbon Reduction Plan in Place | Atkinson & Kirby (akirby.co.uk)
