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Carillion has joined a raft of high street names in a bid to offer cheap finance to homeowners interested in taking part in the government鈥檚 Green Deal scheme.

The contractor has signed up to a government-backed initiative 鈥� along with sixteen other companies including British Gas and HSBC 鈥� to set up a not-for-profit Green Deal Finance Company (GDFC).

The GDFC will offer loans to homeowners that wish to make energy-saving home improvements, which will then be paid back through savings made on customers鈥� energy bills.

A spokesperson for the Department of Energy and Climate Change (DECC) said: 鈥淭he GDFC will be a national aggregator that can provide finance to all Green Deal Providers on an equal and open basis. 

鈥淏y operating at a national level, it will minimise the operating and administration costs of Green Deals and will quickly be able to access the cheapest sources of finance in the market at the highest possible credit rating.鈥�

Chris Huhne, secretary of state at DECC, said: 鈥淭his is an exciting initiative with the potential to reduce interest rates on Green Deal finance, while also supporting healthy competition amongst Green Deal providers including small businesses.

鈥淣ew firms like the Green Deal Finance Company are testament to the attractiveness of the Green Deal framework and its potential to offer a better deal to consumers.鈥�

The other firms which have signed a memorandum of understanding to develop a business plan for the GDFC are Clifford Chance, E.ON, EDF Energy, Goldman Sachs, Insta Group, Kingfisher, Linklaters, Lloyds Bank Corporate Markets, Mark Group, npower, PwC, RBC Capital Markets and SSE.