New funding available to help small businesses become more energy efficient
The UK Green Investment Bank (GIB) and its fund manager Sustainable Development Capital LLP (SDCL) have today announced £1m of funding to help SMEs to make investments in energy efficiency. This is matched by £1m from SI Capital R&S1.
The £2m announced today will be invested into ReEnergise Finance Ltd’s Smart Energy Finance vehicle, which has been set up to provide loans, primarily to SMEs, for energy efficiency projects. Initial loans are in progress for lighting and small-scale biomass projects for a variety of organisations including a garden centre and a training provider.
Shaun Kingsbury, Chief Executive, UK Green Investment Bank, said:
“The investment announced today will help small businesses across the country to save money. Energy is a significant cost for any company, and putting in place energy efficiency measures will have a real impact on these organisations’ bottom line. The funding model means that they won’t need to find the capital upfront, and can pay for the capital costs from the savings they make on energy bills. Energy efficiency makes good commercial and environmental sense.”
Smart Energy Finance is the first dedicated commercial finance vehicle providing funding solutions for UK-based SME organisations seeking to become more energy efficient, but which have struggled to find appropriate finance and independent advice.
The investment announced today is expected to fund up to 20 projects and could eventually build a portfolio of up to £10m of assets. Typical projects will be from £25,000 to £400,000 and could include biomass boilers, low-energy lighting and combined heat and power.
The funding model means businesses will start saving money from day one, with an immediate reduction in their energy bills of around 20%.
GIB’s investment is being made by the SDCL-managed fund, UK Energy Efficiency Investments, in which GIB is the cornerstone investor. GIB invested £50m into the fund in 2012, to provide finance for small-scale energy efficiency projects.
Business and Energy Minister Michael Fallon said:
”This is a welcome investment that helps small businesses and shows that going green isn’t just about building offshore wind farms or new energy plants. Any good business should want to become more efficient and saving on energy costs makes good business sense.”
Jonathan Maxwell, CEO, Sustainable Development Capital and Jim Totty, Partner of SDCL EE Co (UK) LLP said:
“For a long time we have been seeing high quality dealflow for energy efficiency projects for small commercial premises. These include biomass boilers, lighting retrofits, and other efficiency retrofits. However evaluating and structuring bespoke small energy efficiency investments into the SME sector is a challenge for investors. ReEnergise offers a unique combination of experience and energy efficiency sector knowledge to allow us to deploy capital quickly and efficiently and we look forward to working with Adam Hewson, Tarquin Henderson and the ReEnergise team.”
Michael Covington, Partner of SI Capital said:
“We are delighted to have invested into SmartEnergy Finance alongside SDCL and the UK Green Investment Bank. ReEnergise is a leading asset finance platform in the UK energy efficiency market, a key focus for our fund, and complements our existing portfolio of European smart energy solutions investments.”
Adam Hewson, Director at ReEnergise Finance said:
“We are delighted to welcome SDCL and through them the UK Green Investment Bank, into Smart Energy Finance alongside SI Capital. Demand since we launched has been very high and it was clear from the outset that we would need to find investment partners to help build our fund but more importantly deliver the range of dedicated energy efficiency financial services to UK SME’s we want to. We look forward to working with SDCL alongside SI Capital to offer our UK clients an exceptional level of service and delivery in specialist financial services.”
Following the announcement yesterday of its 2013/14 annual results, GIB is today hosting an Annual Review meeting in London where it will present its results and future strategy to a wide range of stakeholders. A similar event is being held in Edinburgh on the 26th June.
Download full Press Release here.