Environmental Upgrade Finance – Explained

Established in 2002 and initially called the Sustainable Melbourne Fund, the City of Melbourne developed the fund to finance sustainable initiatives undertaken by buildings in the council district. Expanding to new council areas in Victoria, the benefits of the fund were finally seen by council areas in South Australia and New South Wales which led to the Sustainable Australia Fund.

Are you able to benefit from the Sustainable Australia Fund? Well this write-up will hopefully inform you of your eligibility. But first, lets run through some of the basics.

What is Environmental Upgrade Finance?

Environmental Upgrade Finance (EUF) is a financing scheme introduced by the Sustainable Australia Fund to fund building upgrades to non-residential properties that are going to have environmental and sustainable benefits to the business and in turn benefit the environment. The business projects that can be funded range from renewable energy upgrades like solar, energy and water efficiency, waste management, through to significant building upgrades and renovations.


How does Environmental Upgrade Finance work?

The finance covers the full cost of the building upgrade, including any auxiliary costs, while offering an agreeable fixed-rate, long-term loan repayment option. The projects are funded by Sustainable Australia Fund who provide the necessary capital. This capital is then paid off to the local council through council rates. There are a couple of options for business owners, one being to take on the loan and make repayments themselves, or they can include tenants in the repayments while they enjoy cheaper energy costs. As the finance is secured by the land, not the owner, if the property is sold, the new owners can continue to make the repayments and benefit from the upgrade.



Environmental Upgrade Finance is offered through three different products that target different business requirements. It gives the clients the ability to choose an option that is suitable to their needs. These products are below:

  • Solar Fund – a competitive long term fixed-rate solar PV and battery finance solution for commercial businesses
  • Capital Fund – for construction projects to reposition an asset or make significant renovations. Capital Fund can cover the environmental upgrade components of the project, such as HVAC and green building practices
  • Upgrade Fund – as with the Solar Fund, the Upgrade Fund is a long term fixed-rate finance but is instead suitable for a range of environmental upgrades like energy efficiency, water efficiency improvements and waste management solutions

Differences between Environmental Upgrade Finance and regular solar financing options?

  • Projects can receive up to 100% finance inclusive of soft and hard costs
  • In situations where the property is leased, a split repayment option between tenants and landlord can be arranged
  • No personal, business or other type of security-based information is required
  • Loan terms can be offered up to 20 years
  • No final balloon payments at the end of agreement as is usual for a rental agreement
  • Repayments are made quarterly
  • EUF Loans are non-recourse
  • Finance isn’t attached to the land not owners, so loan transfers with land title if property is sold

Am I eligible?

If you are operating a business on a non-residential property that sits on rateable land then you are eligible to apply for Environmental Upgrade Finance. However, there are a few other requirements you need to meet before you’d have approval.

  • Must primarily be a non-residential property
  • Must sit inside one of the council areas that offer EUF (see postcode list below)
  • The building must not be owned through a super fund that is self-managed
  • The building must reside on rateable land
  • It must be an improvement on an existing building
  • There must be a measurable environmental benefit

List of postcodes where Environmental Upgrade Finance is currently available

This list is updated as of November 2019 – see up to date list here.


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