UK Green Investment Bank launched

The Bank has already begun investing in the waste sector, and its launch was accompanied by an announcement from Greensphere Capital, which has committed funds to construct a 5.1 megawatt anaerobic digestion plant in Teesside.

Speaking in Edinburgh this morning, business secretary Vince Cable highlighted the UK GIB investment into 8 million to a project in the North East of England that will generate energy from waste. This will attract a further 8 million of matching private sector funding from Greensphere.

The construction of the Anaerobic Digestion (AD) plant at Teesside is the first of six planned over the next five years, making it the largest single AD project in the UK. The Teesside project is part of an 80 million investment programme by UK GIB in small waste projects.

Waste and bioenergy was identified as a priority sector for the GIB alongside offshore wind, non-domestic energy efficiency and support for the Green Deal. The Bank has an initial capital allocation of 3 billion.

In terms of waste, Adrian Judge, executive director at the UK GIB, said the Bank would help to reduce the UKs reliance on landfill and increase sophistication in technology used through investments in infrastructure. However, he added that in terms of technology the Bank will adhere to the waste hierarchy to ensure the best solution is sought.

Commenting on the role the UK GIB will play, Mr Judge said: A role for the Green Investment Bank is to encourage and boost investor confidence in this sector of the relatively mixed track record in waste and the newness of the bioenergy sector.

UK GIB estimates that over the next few years more than 6 billion is needed in funding requirements for the waste sector, some of which will be provided by the Bank. A range of criteria will be considered before investments are made including cost competitiveness of the project, feedstock supplies and the contractors involved.

The Bank is keen to not be seen as a last resort financing option and will be working hard to make a return on its investments.

Impact

Mr Judge told letsrecycle.com that it will have different meanings for different parts of the waste sector. He said: The UK GIB has different meanings for different parts of the waste sector. For example in the PFI and PPP market it is our engagement and involvement means that those projects get to close. Before the problems with the debt market they would have closed already. We are just providing them with that final push.

Mr Judge added that for small scale projects having committed fund managers would give them access to people who understand the sector. However, he said merchant projects could prove difficult.

“For the merchant projects who have always had the problem, we have got to work out how we can help them in terms of we can invest ourselves and attract other investors into the sector and how we can get them to be more successful in the market which can be difficult.

Teesside

UK GIB has already begun investing in the waste sector with 8 million committed by UK Green Sustainable Waste and Energy Investments fund (UKGSWEI), which is managed by Greensphere on behalf of UK GIB, to the construction of an AD facility in Teesside. Greensphere matched the 8 million in in private sector funding for the project.

The investment in Greenlight AD Power will see service provider Earthly Energy Ltd develop the facility alongside BioConstruct GmBH will which provide the technology.

Commenting on the investment Shaun Kingsbury, chief executive of UK GIB, said: This Greensphere-led project typifies the kind of investment the Green Investment Bank was set up to make. It injects capital alongside the private sector into one of our priority investment sectors, providing the additional funding required to enable these projects to process. The plant will also add to the UKs electricity generation capacity whilst realising significant environmental benefits, including the diversion of waste from landfill.

Investments

Greensphere plans to invest a total of 100 million over the next five years in a bid to create a leading AD platform in the UK over the next five years, which will comprise of an additional five plants. Once operational, the AD plants will process over 550,000 tonnes of waste, generating in excess of 30 megawatts of electricity.

This is the second investment on behalf of UK GIB in the waste sector, after 2 million was committed to an AD facility being developed by the TEG Group in Dagenham, East London (see letsrecycle.com story here).

More information on the UK GIB is available on the department for innovation, business and skills website here.