GIB launches world’s first offshore-wind fund
The UK Green Investment Bank (GIB) has raised £463m to start the world's first offshore-wind fund.
The cash will be invested in active offshore wind farms in the UK, providing a long-term commercial return for investors.
This is the first fund raised by the GIB group, a first move into asset management and the first time it has managed private capital since its formation.
GIB chief executive Shaun Kingsbury said: “The fund will create significant benefits for the UK by mobilising capital into the UK offshore wind sector from new, long-term investors seeking good, risk adjusted returns.
“Attracting additional capital and creating a liquid market for operating assets is an important step in reducing the cost of offshore wind and supporting the continued growth of the sector. New investors will allow the original developers to sell down their stakes and use the proceeds to finance new renewable energy projects.”
The GIB is investing £200m in the fund, along with investments from UK-based pension funds and a “major sovereign wealth fund”. Future funding rounds are expected to take the total value of the fund to £1bn.
Earlier this week, the head of sustainable finance at the GIB Gavin Templeton told edie that the UK is in the midst of a green investment revolution, with institutional investors turning their attention towards sustainability for the first time.
Offshore wind is playing an important role in the UK’s energy infrastructure. By 2020, the GIB expects it provide electricity to 8.2 million homes across the UK.
“A sector this size needs a broad range of long-term investors and those investors need products they can confidently, and commercially, invest in – like this fund,” said Kingsbury.
The announcement marks the end of GIB’s financial year, where it committed £723m to 22 green energy projects across the UK. Since its inception in 2012, the GIB has now backed 46 UK projects with a total value of almost £7bn.
Funding sustainability at Sustainability Live 2015
The Green Investment Bank’s head of sustainable finance Gavin Templeton will feature among an expert panel discussing funding sustainability at our brand new high-level Conference at Sustainability Live 2015 in April. The panel will explore how to get access to funding and the types of funding available – public and private.