UK GIB to invest £200m in overseas energy projects
The UK Green Investment Bank (GIB) has announced that it is to invest £200 million in renewable energy and energy-efficiency projects in developing countries over the next three years.
The money, which is in addition to the £3.8 billion allocation to the government-funded bank, will assist in investment of the UK’s International Climate Fund (ICF) and will reportedly be used to support ‘economic growth, job creation and development of reliable energy infrastructure’ overseas, with a focus on East Africa, South Africa and India.
The Department for Energy and Climate Change (DECC) agreed the terms of the £200 million pilot programme earlier this month, and in a written statement to the House of Commons yesterday (24 March), the Secretary of State for Energy and Climate Change Edward Davey, said: ‘Unmitigated climate change will hit the poorest first and hardest. It is vital that we use public climate finance to catalyse private investment into developing countries.
‘By working with the Green Investment Bank, DECC will be able to draw on its unique mix of investment expertise, commercial discipline and close alignment of green policy objectives to maximise the impact and effectiveness of UK climate finance.’
He added: ‘This new venture will have no impact on the resources or capital of £3.8bn which we have allocated to GIB for investment in the UK. GIB remains fully committed to helping the UK meet its domestic climate change goals. Indeed, this additional activity should benefit GIB’s core UK operations as GIB further builds its global reputation both as an expert in green finance and as a fund manager.
‘The UK’s financial services industry is world renowned, as is our leadership in tackling climate change, and this vehicle brings together these two strengths in a partnership that will enhance the UK’s reputation globally.’
Shaun Kingsbury, Chief Executive of GIB, added: “This important new pilot programme will see GIB investing outside the UK for the first time. I am confident that our unique business model, tried and tested in the UK, will have a very positive effect in developing countries, helping them to build vital new green energy infrastructure.”
GIB invests in Tilbury biomass plant
As well as the international investment, GIB has also this week committed to investing £35 million in a new biomass power facility at the Port of Tilbury in Essex.
Matched-funded by Irish electricity utility Electricity Supply Board, the £190-million Tilbury Green Power facility, will gasify 270,000 tonnes of waste wood a year to generate 300 gigawatt hours of green electricity, ‘enough to power more than 70,000 homes’.
Up to 370 jobs will be created during the construction phase, with nearly 50 permanent jobs becoming available once the plant is commissioned in ‘early 2017’.
Criticism of GIB’s heavy investment in the EfW industry
The announcement of the latest GIB investment comes amidst growing criticism of GIB’s preference for energy-from-waste (EfW) facilities.
According to environmental consultancy Eunomia, 90 per cent of GIB’s investments in the waste sector have been in projects that are mostly, or wholly, EfW residual waste treatment facilities. Just last week, the consultancy argued that the interventions in the UK waste sector ‘risk hindering the country’s efforts to increase recycling and decarbonise energy’, as the bank has reportedly made ‘repeated errors in assessing the environmental impact of the projects it funds’.
Eunomia highlighted that when GIB appraises the environmental impact of an incinerator, it assumes that ‘every unit of electricity produced by an incinerator leads to the avoidance of generation as intense as CCGT [combined cycle gas turbine]’, but the ‘reality is that the benefit of electricity from incinerators drops rapidly over its lifetime’.
As such, Eunomia is now backing calls made by the Commons’ Environmental Audit Committee in July 2014 to ensure that UK GIB finances innovative recycling technologies to ‘support a circular economy’.
In response to this, GIB highlighted that it has recently invested £28.25 million in Levenseat Renewable Energy Limited’s 12.3-megawatt energy-from-waste (EfW) plant in Forth, Scotland.
It is expected that the EfW facility, thought to be the ‘first of a kind’, will divert around 1.4 million tonnes from landfill and generate enough electricity to meet the needs of nearly 18,000 homes over its projected 25-year lifespan.