LONDON — The U.K. Green Investment Bank aims to boost the capital it commits to carbon-cutting projects to 700 million pounds ($1.2 billion) this year as it chases deals in offshore wind, waste and energy efficiency.
The bank, capitalized with 3.8 billion pounds of government funds, allocated 668 million pounds to clean-energy projects in the year through March, Chief Executive Officer Shaun Kingsbury said today in a telephone interview. That’s up from 635 million pounds the previous year, though the bank only began operations in November 2012.
“I’d hope for more than 700 million for the financial year we’re in, but it’s not about allocating capital; it’s about the quality of the projects,” he said. It will take another “two to three years at least” to commit the full 3.8 billion pounds.
The bank was set up by the government to spur spending in renewables, using its own cash to leverage further funding from private companies. Kingsbury said that progress so far indicates every pound the bank commits has leveraged almost another three, with 3.3 billion pounds of private money flowing from the 1.3 billion pounds he’s allocated so far.
“Our investment levels were up, our green impact was up, and much more of that is direct investment,” Kingsbury said, referring to last year’s performance. He said he’s working on some offshore wind deals that he hopes to announce this year, and waste-to-energy and biomass plans that may be announced as soon as next quarter. He didn’t disclose further details.
Offshore wind is “always going to be a big portion of our capital, probably our biggest sector,” Kingsbury said. “These are very large, chunky transactions, usually more than 100 million pounds.”
Offshore wind, waste and energy efficiency are the bank’s three core areas, to which it aims to commit 80 percent of its funds. In the energy-efficiency sphere, Kingsbury said he’s trying to persuade more councils and local authorities to take advantage of loans from the bank to switch old sodium street lamps to energy-efficient LEDs.
“We could cut both emissions and the costs by 70 to 80 percent with existing technology,” Kingsbury said. Those loans are “sculpted so that you always pay back the interest and capital out of the energy savings you’ve made. So it’s light at the front and the repayments get back-ended and heavier at the end when you’re saving more and more money.”
Copyright 2014 Bloomberg
Lead image: Coins and bills via Shutterstock