A City of Melbourne initiative that funded local businesses to carry out environmental infrastructure upgrades has now been scaled up and expanded across Australia.

With the City of Melbourne agreeing to divest, the Sustainable Melbourne Fund has now been renamed Sustainable Australia Fund, which will take the innovative finance model nationwide through a partnership with Bank Australia.

The Fund has been recapitalised with a $200 million loan facility from Bank Australia, and will initially be expanded to New South Wales and South Australia.

The Sustainable Melbourne Fund was first established 17 years ago by the City of Melbourne Council to reduce emissions and mitigate climate change by financing private sector businesses through accessible loans to upgrade their energy infrastructure and unlock efficiencies and environmental outcomes.

Businesses could avail up to 100 percent of the capital needed for these upgrades, with the loans repaid through Council rates over periods of up to 20 years.

City of Melbourne Deputy Lord Mayor Arron Wood said that the Fund had unlocked over $30 million in environmental infrastructure upgrades for Victorian businesses, enabling the abatement of more than 300,000 tonnes of greenhouse gas emissions.

These upgrades, ranging from solar PV projects in several municipalities to a multi-million dollar water treatment plant in regional Victoria, have helped save money, reduce environmental impact and drive new business.

According to Wood, the initiative has been successful in transforming the built environment and incentivising building upgrades and renewable energy.

The significantly scaled Sustainable Australia Fund will now build on the initiative’s original purpose and unlock investment in businesses across NSW and South Australia in addition to Victoria by providing savings through energy efficiencies, as well as achieving positive environmental outcomes.

Darren Dawson, head of impact finance at Bank Australia, said that their support for the Sustainable Australia Fund aligned with their purpose of creating positive impact for people and the planet.

By providing a loan facility of up to $200 million, the Sustainable Australia Fund will unlock environmental upgrades, facilitating significant increases in energy efficiency and enabling communities to adopt more affordable renewable energy technology, he added.