Responsible Funds, July 3: Renewable infra is first commitment for new European strategic fund

The round-up of the latest responsible funds news

The European Investment Bank (EIB), which has committed €75m to a renewable energy fund launched by Copenhagen Infrastructure Partners (CIP), says the investment is its first under the new EFSI (European Fund for Strategic Investments) program. The regulation for EFSI was finalised by the European Parliament and Council last week. EFSI’s aim is to promote European growth and jobs in part through €5bn in financing provided by the EIB. The EIB said it had selected CIP’s fund due to its focus on the renewable energy sector. “The high share of offshore wind, biomass and transmission investments to be made by the fund is expected to generate considerable employment (up to 5,000 jobs) in the construction phase and during the projects’ operation,” the Luxembourg-bank said.

Meanwhile, the EIB is appraising a £425m (€597m) investment in the 340MW Galloper offshore wind project off the coast of southeast England. The £1.54bn project – an extension to an existing 504MW offshore facility – is backed by Siemens, RWE and the Green Investment Bank.

Incofin Investment Management, a Belgium-based microfinance specialist, has taken in $71m (€63.5m) from investors following a first close for a fund which invests in debt and equity from rural enterprises in emerging markets. According to Microfinance Brief, the investors in the fund, known as agRIF, include the European Investment Bank, France’s Proparco, the Swiss Investment Fund for Emerging Markets (SIFEM) and the German church bank BKC. agRIF will make investments of between $5m and $10m.

The London Pensions Fund Authority Board (LPFA) and the Lancashire County Pension Fund Committee (LCPF), which have £10bn (€14bn) in assets between them, have confirmed the formation of a partnership to cut costs and boost efficiency. In a statement, the duo said their alliance, called the ‘Lancashire and London Pensions Partnership’ (LLPP), would focus on all aspects of pension fund management and services. The schemes’ boards will, however, remain in place and continue to decide strategy. Said LPFA Chief Executive Susan Martin: “It is our aim to significantly reduce the funds’ combined costs – we estimate by over £32m within five years – and with the benefit of economies of scale, further reduce our respective deficits. ”

The €210.1m Deka-UmweltInvest alternative energy and environmental equity fund is up 20.59% in the year to date (against an 18.93% benchmark return). It invests globally in companies that are involved in climate conservation, environmental preservation, water and renewable resources.The Conference of the Methodist Church in the UK has voted unanimously to disinvest from coal and tar sands by 2017, according to the BrightNow fossil free churches campaign run by Operation Noah, the ecumenical Christian charity. The Conference also asked the Church’s ethical investment body to report back on possible further disinvestment from other fossil fuels by 2016, BrightNow added. It follows a revised policy on climate change and investment published by the Methodist Church earlier this year and a decision by the Church of England in March to divest £12m from coal and tar sands companies. The Church of England will debate a motion calling for further progress on disinvestment at its General Synod next week. It’s also been revealed that the Church Commissioners have recently signed a preliminary agreement with solar firm Lightsource to develop solar farms on Church-owned land in rural areas. To see a video about the Church and responsible investment, click here

LGT Sustainable Equity, the €184.6m Liechtenstein domiciled fund, has returned 17.97% in the year to date, according to its May report. The actively managed fund uses sustainable criteria to “invest sustainably while also outperforming the benchmark” (MSCI World). The largest holdings are McDonald’s, National Grid and Baxter International.

Sydney-based Australian Ethical Investment has launched a new fund for retail clients called the ‘Australian Ethical Emerging Companies Fund.’ As per the name, the fund targets listed small and micro-cap companies. And as with Australian Ethical’s other funds, the stock selection will be done according to its sustainable strategy. This involves a mix of exclusion – for example of oil, coal and tobacco – as well as a focus on clean energy or sustainable products. To broaden access to ethical investing, the fund firm said it had lowered the minimum investment amount to A$1,000 (€677).

Deutsche Bank says it has completed the financing of its first large-scale renewable energy project in South Africa, a 90MW solar park in the Northern Cape region. On its ‘Responsibility’ website, the German bank said
it was the sole underwriter of €155m in debt capital that was issued to finance the park’s construction. Deutsche also said the park would be built by Shapoorji Pallonji Group, an India-based infrastructure, real estate and investment company.