Pivot is focused on enabling the implementation of both sustainable infrastructure and social infrastructure. Achieving direct and immediate welfare improvements alongside carbon reduction has guided our product development and is why our primary focus is social or LMI housing. It is a global phenomenon that social landlords are faced with reconciling limited financial capacity with ever more onerous carbon regulation and the requirement to implement environmental improvement works on existing housing stock. In addition, aggressive mandates to build new housing stock remain.
Pivot understands these limitations. In the UK, Pivot works with social landlords to assess their whole stock and introduce options for third party finance that take into account existing programmes and NPV. Pivot then enables flexible, efficient and long-term financing, both on and off balance sheet.
Electrification of heating and mobility is at the core of what we do, however for existing buildings this must be coupled, or even preceded by a ”fabric first” approach to insulate. Institutional funders will finance net zero projects across multi-year programmes based on the guaranteed savings and consistent cash flows which Pivot enables. While government money is available for specific initiatives, it does not support the cost of driving carbon reduction to net zero in the social housing sector, estimated to require £100B of investment in the UK alone. Social infrastructure funding is being raised in the private sector and directed to projects by Pivot.
A third-party project vehicle is used and has the capacity to be off-balance sheet for the social landlord. The efficiency upgrades are provided through a service agreement, where payment is based on a percentage of realised savings, which means it is neither a lease nor secured borrowing and so will not interfere with existing loan agreements.
The mechanism that delivers certainty of repayment for external funding is Pivot’s energy savings insurance product which transfers the performance risk from the social landlord and the resident, making projects bankable and the cost of funds efficient.
Pivot measures and communicates savings on an ongoing basis. A portion is left with the resident to generate a day 1 saving on their bill and the balance is collected and transferred to the project vehicle. There exist a number of legal mechanisms to recover the realised savings from residents which Pivot can advise on.
Pivot’s partners can fund alongside grant funding or combine with the financial resources of the social landlord. They will commit to a programme of works, in separate tranches, over a number of years to deliver against net zero targets. The energy savings insurance can also be applied to self-funded projects to add further certainty of cashflows.