The Green Investment Bank (GIB) has announced a £200m lending programme for community-scale renewable energy projects in the UK, a move that marks the institution’s first investment in the sector, although energy from waste (EfW) is not included.
Specialist investment manager Temporis Capital LLP will manage the scheme, which will be funded half by the GIB and half by global investment firm KKR.
GIB gained approval from the European Commission in May 2014 to expand its investment mandate to include community-scale renewables, mainly small-scale hydro-electric and onshore wind projects, in response to what the bank sees as a funding gap in the market.
“Many well-structured community-scale projects have not been able to get off the ground because of a lack of long-term finance in the market,” said Shaun Kingsbury, chief executive at the GIB. “These small-scale projects can make a meaningful contribution to the UK’s green economy.”
However, a GIB spokesman said EfW schemes were not included in these projects.
GIB says the scheme is also significant because it has brought a new investor, KKR, to the UK renewables market.
Nat Zilkha, co-head of credit for KKR, said: “Renewable power is a critical part of the energy mix and non-bank lending can provide capital to projects with clear tangible benefits for local communities. We look forward to providing more financing to companies and infrastructure projects in the UK.”
Temporis said it expected the first project under the scheme to be in Scotland, with a loan agreement to be signed shortly.