A total of £80 million has been committed to two specialist fund managers - who will make and manage investments in the small scale waste infrastructure sector - by a team within the Department for Business, Innovation and Skills (BIS).
All BIS investments made by the fund managers will be match-funded, leveraging in at least £80 million more to the projects.
The Government is investing directly, on fully commercial terms, ahead of obtaining state aid approval for the UK Green Investment Bank (GIB).
The fund managers will be responsible for generating and managing investments in areas such as waste recycling and reprocessing facilities, pre-treatment projects and energy-from-waste projects.
Business Secretary Vince Cable said:
“These first investments are a landmark moment. They represent a great opportunity to unlock substantial commercial investment in green technologies and infrastructure. The Government has committed to setting the UK firmly on course towards a green and growing economy and today is another important step in that direction.
“Investing directly now shows that we are not just sitting on our hands while we wait for the UK Green Investment Bank to receive state aid approval.”
An initial fund of £50 million will be managed by Foresight Group and an initial fund of £30 million by Greensphere Capital. The maximum amount of individual investments is not likely to exceed £15 million.
The Government will also make a further £100 million available for investment in the non-domestic energy efficiency sector. A competition was launched last month for fund managers interested in working with BIS on this. The outcome of the competition will be announced in the summer.
Notes to editors:
The Government is investing as UK Green Investments (UKGI) in green infrastructure projects from April 2012 focusing on the GIB’s five priority sectors, ahead of obtaining state aid approval for the GIB.
The GIB is designed to accelerate private sector investment in the UK’s transition to a green economy. Offshore wind power generation, commercial and industrial waste processing and recycling, energy from waste generation, non-domestic energy efficiency and support for the Green Deal will be the first priority sectors for the GIB, subject to approval by the European Commission.
The competition seeking experienced fund managers to manage Government investments in waste infrastructure projects was launched in December 2011.
Investments in the funds will be made by BIS’s UK Green Investments team (UKGI), overseen by a new Investment Committee.
Foresight Group is a leading independent alternative asset manager, with more than £650m assets under management, focused on environmental, infrastructure and private equity investing. Foresight has become a market leader in the UK waste and environmental sector, with an existing £125m investment portfolio of recycling and waste to energy companies. Foresight also manages the innovative Foresight Environmental Fund, on behalf of the London Green Fund, the European Investment Bank and the European Commission's Joint European Support for Sustainable Investment in City Areas (JESSICA). For more information visit http://www.foresightgroup.eu/.
Greensphere Capital LLP (“Greensphere”) is a specialist investment firm focused on sustainable energy and infrastructure. It was set up to bring discipline and rigour to sustainability and clean energy investing and focuses on supporting investments that enables current infrastructure to function more efficiently and on a more sustainable basis. In the waste infrastructure sector, Greensphere has enlisted the support of the Environmental Infrastructure Development Company Limited (EIDC). EIDC is a specialist developer of waste and waste-to-energy assets that has created a proven and repeatable platform to ‘incubate’ projects with the right raw ingredients into institutional grade investments. For more information visit www.greenspherecapital.com and www.eidc.co.uk.
The Government is committed to setting the UK firmly on course towards a green and growing economy. The transition to a green economy presents significant growth opportunities for UK-based businesses, both at home and abroad. This progression requires unprecedented investment in key green sectors. An estimated investment of up to £200 billion in the energy system alone is needed over the period to 2020. The GIB will be uniquely placed to facilitate the transition to a green economy base by addressing the market failures affecting green infrastructure projects. These failures have led to significant under investment in the key areas required to deliver this transition. Capitalised with £3 billion, the GIB will complement other green policies to help accelerate additional capital in green infrastructure.
The UK Green Investment Bank (GIB) will be based in Edinburgh and London. The headquarters of the GIB will be located in Edinburgh, with the GIB’s main transaction team based in London. This arrangement will enable a greater commercial reach nationally than could be achieved from one location.
BIS's online newsroom contains the latest press notices, speeches, as well as video and images for download. It also features an up to date list of BIS press office contacts. See http://www.bis.gov.uk/newsroom for more information.