EXCLUSIVE: Fledgling waste projects are set to benefit from crucial funding as ministers finalise arrangements for UK Green Investments’ £100m waste fund.
MRW has learned that UKGI has cut down a longlist of fund managers to run the bespoke waste fund to “around five”. Officials are hopeful they will be able to start allocating cash to projects by the spring.
The bidding criteria required potential fund managers to draw up a business case including a pipeline of viable projects well placed to use loans quickly.
“Fund managers will play a similar role to that played by Foresight Capital for the London Waste and Recycling Board. Hopefully things will be up and running by April or May,” said a figure familiar with the bidding process.
Anaerobic digestion, gasification and plastics recycling projects have been tipped as areas which could benefit from the fund, which is targeting projects with a value of up to £30m (see box below).
Waste finance experts this week said the dire state of the world’s banks meant big players may also target the Green Investment Bank.
Grant Thornton director Nigel Mattravers said: “Initially most of the discussions were around the bank funding smaller projects but with major banks struggling to lend, larger waste services industry players that would have previously looked to commercial lenders for finance may well look to the GIB.”
A senior figure charged with setting up the GIB this week warned the bank would not give any “handouts” and that it would have a lending criteria akin to its private sector counterparts (mrw.co.uk/8626692.article).
Sir Adrian Montague, appointed by business secretary Vince Cable, told the Times: “We are not trying to give soft loans and grants. We are not looking to give grants and support in areas where the private sector would not give support. We are looking at the technologies that need the leg-up to be commercial.”
The Department for Business, Innovation and Skills declined to comment on which firms had submitted bids and said an announcement would be made in due course. The department said in December that it hoped to appoint fund managers by 21 March
UKGI’s waste infrastructure fund in summary
- The UKGI fund will have up to £100m to invest in waste infrastructure projects
- UKGI was set up by ministers to manage green investments until the £3bn Green Investment bank is formally established
- The fund manager/s will be expected to secure “at least a matching amount of private sector equity” for projects
- The bidding criteria published by BIS in December said target projects should be in areas where there was currently a gap in available funding with a suggested project capitalisation of up to £30m
- Projects in development or construction phase will be given preference