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Huge investor interest in the waste sector

Venture capital experts in the waste industry have hit back at suggestions that Britain is struggling to produce commercially viable green companies.

Published in the Sunday Times on 25 April, an article said venture capital investors believed that “a dependence on government funding and a lack of management talent in ‘clean tech’ businesses render many of them unworthy of investment”.

WHEB Ventures principal Mark Preston said: “This is certainly not true [for the waste sector]. We’re having no trouble in attracting top management into clean tech businesses. We’ve found that many of the companies are formed by management teams which came from adjacent sectors and so have plenty of experience. The waste industry is not a new sector. People have been working in it for years, so there is no shortage of experienced top managers for clean tech businesses addressing this market.”

Hermes chief investment officer Susan Flynn said:  “We anticipate waste recycling and in particular waste to energy will be a particularly exciting investment opportunity over the next few years in the UK as we strive to meet the targets of the EU Waste Directive and seek to meet the impressive recycling levels of some of our European counterparts.  

 “There is a technology funding gap at the technology transfer or early stage investing, which the Government has been seeking to fill.  The high failure rates of such investments make them too risky for the vast majority of institutional investors such as us.  Government support for such companies is important.” 

Energy from waste, plastics recycling and any technologies that have room for development are leading the interest in the waste sector for investors.

“We all know that utilities is one of the most stable investments and here is a new utilities sector,” said Foresight head of environmental infrastructure Matt Taylor. “As of next year, there will be the heat incentive too, so there are going to be a number of new businesses created which will be energy suppliers.”

According to Taylor, £30bn must be spent on waste infrastructure in the UK to ensure we meet our targets but, currently, there is not enough funding. ”At the moment, companies in the sector are very constrained because of the [lack of lending from the] banks. This needs to change and capital constraint is one of the key issues for waste companies.”

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