RHI scandal: Probe told of 'conspiracy theory' over Arlene Foster's letter to lenders
The inquiry into the Renewable Heat Incentive (RHI) has been told there was a "conspiracy theory" over a letter from Arlene Foster encouraging banks to grant loans to scheme participants.
The failed scheme was set up in 2012 with the aim of encouraging businesses to switch to green energy. But a crucial lack of cost control measures left it open to abuse, with applicants able to earn money by burning more fuel than they needed.
When it collapsed in late 2015 it was feared the public would be faced with an overspend bill of nearly £500m.
However, when it was established in 2012, uptake was poor as businesses struggled to secure loans to finance boiler installation. A letter from the then Enterprise Minister Mrs Foster was sent to banks to encourage lending to those availing of green energy schemes.
Yesterday at the RHI public inquiry, junior counsel to the probe Joseph Aiken said there was "considerable media speculation" over what Mrs Foster's motivation had been in sending the letter. The inquiry heard that it had been written by Fiona Hepper, head of the energy division at the Department of Enterprise, Trade and Investment (Deti). It was sent to the banks without amendment by Mrs Foster, after being passed by her special adviser Andrew Crawford,
Mr Aiken told inquiry chair, retired judge Sir Patrick Coghlin, that 2016 media coverage about the letter was part of a "conspiracy theory" that the RHI scheme was a "vehicle for getting more money than you should be getting", and Mrs Foster's letter to the banks was "a way of increasing that".
Sir Patrick said he believed it "highly unlikely" the letter was connected to such a conspiracy.
The inquiry also heard that Mrs Foster was warned that RHI contained a "perverse incentive" for participants to 'burn to earn' just 10 weeks into the scheme.
The Inews website reported that a company wrote to then environment minister, Alex Attwood, to complain that RHI tariffs were deterring farmers from using its own system for reducing the use of poultry manure on fields.
It also highlighted how the lack of proper cost controls meant a farmer with two small biomass boilers would receive "nearly four times more" in grants than a single one with the same capacity. The firm said "the result is a 'perverse incentive' for farmers" to install multiple small wood chip boilers, rather than fewer, bigger, poultry manure to energy systems.
The letter was passed to Mrs Foster, but Deti officials did not accept the company's concerns over boilers. Mrs Foster's private secretary wrote back to the company to say: "I can assure you that this is not the case."