Bank of Ireland has announced a range of green loans and interest rates to encourage as well as reward home owners and businesses to be more energy efficient. 

The bank is introducing a reduced fixed interest rate for borrowers buying or building energy efficient homes, where borrowers can avail of a 0.2% discount on any of its fixed interest rate mortgage options. 

Based on a 20-year €200,000 mortgage fixed for the first five years, Bank of Ireland said its new Green Mortgage interest rate would represent a saving of about €2,085 over the five-year term.

It is also providing a discounted green home improvement loan for energy-efficiency retrofits for older properties, which will include loans for installing solar panels and retrofitting insulation. 

It said that based on a €15,000 loan, the discount would represent a saving of about €418 over a five-year period.

Bank of Ireland said it will offer discounted finance to businesses - and farmers - who want to implement energy-saving initiatives to reduce their energy costs and their carbon footprint.

Based on a €300,000 loan at the Small Business Rate, it said this discount would represent a saving of roughly €5,925 over a seven-year period.

Gavin Kelly, CEO Retail Ireland at Bank of Ireland, said that addressing the challenge of climate change means changing behaviour.

"As a leading financial services provider in Ireland we can make a meaningful contribution to incentivising that change," Mr Kelly said.

He said the first of the bank's new products are designed to practically support its customers' transition to a more energy efficient and sustainable future.

Last month, AIB said it had set a target of making €5 billion of green loans available over the next five years.

It said these included products to make homes more energy efficient, finance for electric cars and renewable energy.

Sustainable Energy Authority of Ireland said that lack of funds is one of the main obstacles to consumers investing in energy efficiency measures for their home.

More than 70% of Irish consumers who had researched energy efficiency measures but not proceeded with them cited this as the reason, according to an SEAI survey.