UK government sets up £200m interim Green Investments team, seeks fund managers

The UK government has set up an interim body called UK Green Investments (UKGI) to get its environmental investments up and running before the formal launch of the £3bn (€3.5bn) Green Investment Bank.

There will be a total of £200m available initially for investment in small-scale waste infrastructure and non-domestic energy efficiency. UKGI will also be available to co-invest in offshore wind projects – which is projected to have a capital expenditure requirement of over £50bn to 2025.

UKGI is already seeking expressions of interest from fund managers to run government-managed accounts of up to £100m of waste project investments. It will start operations from April next year with a high-level team (see below).

“Fund managers expressing an interest should also show how they intend to raise the private sector investment to invest alongside UKGI,” the government said. All investments will be made on a commercial basis or meet the requirements for existing state aid exemptions or approvals.
Fund manager selection will be a three-stage process expected to last 15 weeks. Managers will be notified on February 15 and the process will close on March 21. It comes as Business Secretary Vince Cable has published the criteria for deciding where the Green Investment Bank will be based and what its priorities will be until 2016.

Initial priorities will be offshore wind power, commercial and industrial waste processing and recycling, energy from waste, non-domestic energy efficiency and support for the household-level ‘Green Deal’.The green bank has to be approved by the European Commission.

A location for the bank will be decided by the end of March. “I want to set up the Bank as soon as possible, so it can start accelerating investments in these key sectors and help British companies take advantage of these opportunities,” Cable said.

The recruitment process for the GIB’s board and top managers begins next month. The chair will be named in spring 2012.

The GIB will have up to 70 employees initially until 2015, the date from which is will be able to start borrowing money – if public sector debt falls as a share of gross domestic product.

The UKGI team comprises:
Anthony Marsh, ex-Deutsche Bank and European Bank for Reconstruction and Development (EBRD).
Charles Abel Smith, most recently, led the public private partnership at Arup.
Ian Nolan, named 3i’s first Chief Investment Officer in 2009.
Kenneth MacRitchie, leading project finance lawyer.
Stephen Crane, experience in project and structured finance at Bank of Tokyo-Mitsubishi UFJ (also Royal Bank of Scotland and Deutsche Bank).
Patricia Barata-Rodrigues, former Director at Macquarie Infrastructure and Real Assets.