Candelas in talks to cut Government energy bill and create 100 jobs
Published 19/08/2014 | 07:41
Candleas, a Mayo-based energy performance contractor that promises to save businesses as much as 80pc on lighting costs, has assembled project financing worth €25m and is in talks with the government to retrofit state-owned buildings with energy efficient lighting.
Sean Hyland, the company’s managing director, said Candelas has assembled loans with Irish and British banks, UK investment houses and investors with Irish backgrounds who specialise in green banking.
He declined to identify the company’s backers.
During ongoing negotiations with the government, Candelas suggested a pilot retrofit programme with that the company would finance with the loans to the tune of €5m.
This would guarantee the government saves €2.5m a year and create as many as 100 jobs, he added.
If it secures the contract, Candelas plans to roll out a nationwide lighting retrofit of state buildings, such as some of the 1,700 properties managed by the Office of Public Works.
“In order to avail of the financing from the UK, the project needs to have a low risk profile and that essentially means the state or government,” the 49-year-old Kiltimagh man said.
“The €25m is ours and we can use that money in the private sector in the UK as well as there are huge opportunities in the UK market. But we’d like to create the jobs in Ireland.”
Hyland said retrofitting buildings with more efficient lighting under a pay-as-you-save contract would lead to the creation of “hundreds of jobs without the government spending any money” and help Ireland achieve its 2020 targets for carbon emissions.
Candelas has already carried out an energy audit for Sarsfield House in Limerick, home to the Revenue Commissioner’s Collector General.
“There has been a very positive response from government and we’ve been out to a number of buildings but nothing is going to happen fast,” he said.
Candelas guarantees companies savings on lighting -- often the biggest energy cost in a business -- by measuring and verifying the energy usage before and after retrofit. It then draws up an energy performance contract that outlines the savings that will be delivered and the client pays for the retrofit costs from those savings. The company also arranges the financing if customers cannot afford the upfront capital cost of energy retrofitting.
“When you are going into a building that the owners are struggling to maintain, you can’t ask them to pay out a large amount and the banks won’t lend them the money,” Hyland said. “So we have solved that problem.”
For more 15 years, Hyland and his business partner ran the Shannon group of companies, including Shannon Formworks, a structural construction company, and Shannon Building Services, a home building and renovation services.
By 2007, the companies, involved in developing Tallaght Town Centre, were generating revenue of €20m a year and employing 150 people.
But when the property market collapsed, Hyland was left scrambling to find a new income stream.
“In 2007 and 2008, we saw the downturn was starting to happen but we thought it would be a 20pc to 30pc rollback, or the soft landing we were all promised,” he said. “We were not expecting the total devastation of the whole industry, which was what it turned out to be. So we went looking for something that would work well in recession and finally settled on an energy efficiency business.
“We specialised in lighting because it has high usage and is relatively easy to complete an upgrade without interfering with people’s work and to measure the savings made.”
Candelas’s previous customers have included DHL at Heathrow Airport, Eli Lilly, Knock Airport and Baxter Healthcare, as well as a slew of hotels, bars and restaurants.