Waste industry investors are thinking twice about investing in the UK because of overcapacity fears and a lack of statistical clarity, says a Green Investment Bank boss.
Speaking at the Chartered Institution of Wastes Management (CIWM) conference (12 June), Adrian Judge, managing director waste and bioenergy UK Green Investment Bank (GIB) said there were too many projects in the pipeline and this was spooking inward investors into the UK.
“There’s always a plea for more data [on capacity], but in this case, some data out there is telling slightly conflicting information,” he said.
Judge said that stimulating co-investment in the waste sector was a GIB aim, but it has been difficult since the economic crash. Also, many waste management projects are not viable to invest in because there is a lack of thought about project risks and risk management.
As a result Judge explained that the role of the GIB is now as a kind of “marriage broker” where it looks into promising projects and try and match people with the right levels of expertise together to make the project more investible. The Government has endowed £3bn with the GIB to be invested on a for-profit basis.
However, he said: “We don’t know which ones to invest in because we don’t know which ones will get the waste supply. There are challenges in getting long-term debts for long-term assets.” Feedstock security can be required for 10-25 years at a time.
MRW recently reported on Eunomia’s report on the problems of overcapacity and the challenges of securing long-term feedstock contracts.
- Read our Big Interview with Adrian Judge and Edward Northam of the GIB