About one in every 20 loans issued to date under the Government-backed home energy upgrade loan scheme (HEULS) to help households lower carbon footprint and fuel bills has been found to be in breach of its terms, according to sources. The two-year-old scheme, which has had 1,135 loans to a combined value of €56.1 million being drawn down to the end of March, is funded by the Strategic Banking Corporation of Ireland (SBCI) through commercial banks. Prospective borrowers must qualify for and take up a home energy loan grant from the Sustainable Energy Authority of Ireland (SEAI).The sources said the SBCI has found, while carrying out a review, that about 5 per cent of the loans did not comply with the scheme’s rules. These include stipulations that: upgrade works must be carried out by an SEAI registered home retrofit manager – or one stop shop – or project coordinator; at least 75 per cent of the loan be spent on energy upgrade works; and that all borrowers also avail of an SEAI grant. The Office of the Comptroller and Auditor General has been informed, the sources added. If a loan is in breach of its conditions, a borrower can be removed from the scheme and their finance provider can demand repayment or move the facility to a higher rate of interest, according the SBCI’s website. It is not clear if there is any plan to call in any of the loans in question. [ Don’t believe the negativity – Ireland’s retrofitting scheme for homes is not failingOpens in new window ]A spokesman for the SBCI declined to comment on the matter, other than to say: “We are continuing to work with the SEAI and the Department of Climate, Energy and the Environment on the operation of the Home Energy Upgrade Loan Scheme.” A spokeswoman for SEAI also declined to comment, other than to highlight that it does not have a role in the administration of HEULS [home energy upgrade loan schemes], but a data-sharing agreement that allows SBCI to “determine details of home energy upgrades completed and the cost of said works”.Representatives for the Office of the Comptroller and Auditor General also declined to comment. Will a Middle East peace deal make any difference to inflation? Listen | 32:03Homeowners can borrow from €5,000 to €75,000 under the scheme on an unsecured basis for a term of up to 10 years at significantly lower interest rates to those on the market. Rates start from as low as 2.99 per cent. PTSB, AIB and Bank of Ireland signed up as lenders in 2024. It was subsequently expanded to include Avant Money, in partnership with An Post, and seven credit unions.Minister for the Environment Darragh O’Brien said last week in response to a parliamentary question that €56.1 million had been drawn down as of the end of March. It equates to a little over 10 per cent of the €500 million earmarked for the scheme when it was announced two years ago. The scheme is scheduled to run only until the end of this year. This is not the first issue that the SBCI has identified in programmes in which it has been involved. A note from the Comptroller and Auditor General in the SBCI’s 2024 annual report said that €500,000 of premium payments due from businesses that availed of one of its credit guarantee schemes had not been collected, while €100,000 had been over-collected. The company also administers the Ukraine credit guarantee scheme for businesses affected by the war in that country on behalf of the department. The scheme closed to new loans at the end of 2024. One of the eligibility criteria required borrowers to declare that their business costs had increased by a minimum of 10 per cent over their costs for 2020 due to economic difficulties resulting from the Ukraine war. The Comptroller and Auditor General note said SBCI had identified 206 guaranteed loans totalling €12.6 million – representing 4.4 per cent of the total value of loans guaranteed – where the borrowers had declared that their businesses were established after 2020, and therefore may not have met the cost increase criterion.