The Building Owners and Managers Association of British Columbia (BOMA BC) and SOFIAC will collaborate on a financing model to help commercial building owners in the province decarbonize their portfolios via deep energy retrofits.
The financing option is designed to help B.C.’s building owners with the high costs and long payback times of implementing retrofits in their buildings.
BOMA BC, an association representing B.C.’s commercial real estate industry, partnered with Quebec-based SOFIAC, a fund co-managed by Econoler and Fondaction with the support of the Quebec government.
SOFIAC made available up to $185 million for low-carbon retrofits across Canada in July 2022 after previously only operating in Quebec. It is extending its no-down-payment investment model for businesses seeking to reduce greenhouse gas emissions as B.C. begins to enact new regulations on the sector.
Turnkey investments for retrofits
SOFIAC will provide BOMA BC members whose annual energy costs exceed $500,000 across their portfolio, with funding for deep building retrofits. Project costs are reimbursed to SOFIAC through a portion of the savings generated and other financial benefits.
Building owners can work with their existing contractors to undertake projects or choose from SOFIAC’s list of partners.
Damian Stathonikos, president of BOMA BC, said sustainability is a major concern for its members. It worked with a B.C. startup to pilot decarbonization planning, but that raised questions about financing those plans.
“We wanted to work with SOFIAC in order to provide access to a really turnkey solution that enables a building owner to bring those projects they need to do to in order to decarbonize their building and finance them in a very effective way that removes risk and removes extra hassle,” Stathonikos said.
He noted financial and human resources as the main limitations members face in creating and implementing these strategies.
The financing model does not require a down payment from the member, freeing capital to spend elsewhere, Stathonikos said. When SOFIAC finances the retrofit, it does not impact a building owner’s balance sheet, unlike a traditional loan.
This means the building owner does not have to “come up with money out of their pocket and they’re able to have a better-looking balance sheet for their building,” Stathonikos remarked.
SOFIAC, Stathonikos said, allows BOMA BC members to access capital at interest rates lower than banks are charging. SOFIAC received its funding from the Canadian Infrastructure Bank before rate hikes, so it can pass on those rates to its customers.
Examples of eligible deep building retrofit projects include envelope work for improving efficiency, electrifying buildings and new heat pumps.
BOMA has over 300 members with assets in B.C. While he didn't know how many might be eligible, Stathonikos is confident it will appeal to a large section of the membership.
The funding will be distributed in a first-come, first-served pool. Stathonikos said BOMA BC members who cannot tap into the first fund can access a second SOFIAC fund that is coming up soon.
Helping to decarbonize B.C.
The collaboration between BOMA BC and SOFIAC comes as emissions regulations on Vancouver’s buildings are becoming more stringent.
Last July, Vancouver council passed the 2022 Annual Greenhouse Gas and Energy Limits Bylaw. It sets a carbon pollution limit of 25 kilograms of carbon dioxide equivalent per square meter per year for office space, which will begin in 2026.
Metro Vancouver is also exploring an initiative to reduce greenhouse gases from large buildings.
The B.C. government legislated reducing its greenhouse gas emissions by 40 per cent by 2030 against a 2007 baseline. "Buildings and communities" are required to make the largest cut out of the four sectors by 2030 – a 59 to 64 per cent reduction.
A rapidly approaching 2025 interim target aims for a 16 per cent cut in emissions.
“The regulatory framework is here, and building owners need to be able to adapt, and this is a tool they can use in order to get there," Stathonikos concluded.