GIB raises £355m for world's first offshore wind fund
The UK Green Investment Bank (GIB) has raised £355m in the second tranche of investment for its Offshore Wind Fund, bringing the total value to more than £818m.
Added to the £463m raised earlier this year, the additional committed capital brings the Fund nearer its target value of £1bn, making it the largest renewable energy fund in the UK.
Second close investors include Swedish life insurance and pension company AMF Pensionsförsäkring AB and Strathclyde Pension Fund. The cash will be invested in active offshore wind farms in the UK, providing a long-term commercial return for investors.
GIB chief executive Shaun Kingsbury said: “We created the [offshore wind fund] to provide investors like pension funds, insurance companies and other asset managers with access to a team of market-leading industry experts.
“This is a great way to put infrastructure money to work in the UK, the world’s leading market for offshore wind.”
Commenting on the new investments, UK Energy secretary Amber Rudd said: “Offshore wind has been a UK success story and I welcome this long-term, private sector involvement in what is now the largest renewable energy fund in the UK.”
In June, reports surfaced that government ministers were preparing to begin sales of shares in the GIB as part of a Conservative privatisation programme.
Offshore wind is playing an important role in the UK's energy infrastructure. In June it was announced that offshore wind capacity in the UK had passed 5GW for the first time, with the official inauguration of Gwynt y Môr offshore wind farm off the coast of North Wales.
There are now 1,452 operational offshore turbines in the UK, with a capacity of 5.054GW, producing enough electricity to meet the needs of 3.5 million British households and saving 6.3 million tonnes of carbon emissions a year. By 2020, the GIB expects it provide electricity to 8.2 million homes across the UK.
Meanwhile, the cost of renewables on the whole is gradually coming down. Research published last week by Bloomberg New Energy Finance suggested that onshore wind is now fully cost-competitive with both gas-fired and coal-fired generation.
However, there have been suggestions that the government is focusing too much time and money on offshore wind – more than 50% of approved in the first round of the contracts for difference auction were offshore wind farms – when more should be dedicated towards other renewables technologies such as onshore wind and solar.