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European Investment Bank The London Green Fund – a JESSICA Holding Fund Frank Lee JESSICA and Investment Funds division, European Investment Bank Brussels,

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Presentation on theme: "European Investment Bank The London Green Fund – a JESSICA Holding Fund Frank Lee JESSICA and Investment Funds division, European Investment Bank Brussels,"— Presentation transcript:

1 European Investment Bank The London Green Fund – a JESSICA Holding Fund Frank Lee JESSICA and Investment Funds division, European Investment Bank Brussels, 29 November 2011

2 2 22 European Investment Bank 2 2 The London Green Fund (a JESSICA holding fund) established in late 2009 to invest in carbon reduction projects in line with the Climate Change component of the London Plan Focused on energy efficiency, waste and decentralised energy as the 3 biggest carbon reduction opportunities for London Governed by representatives from the Greater London Authority, the Environmental Agency and the London Waste and Recycling Board. The Mayors environmental advisor sits on the Investment Board Energy Efficiency Urban Development Fund £35m London Green Fund £100m* Managed by EIB London Waste & Recycling Board £50m Private finance £50m * £15m remains available for further investment Urban Projects The London Green Fund Private finance Waste Urban Development Fund Equity type investment Loan type investment Low risk High risk Min £50m Min £35m Aiming to deliver outputs/impacts on job creation, tons of carbon saved, and minimum energy usage savings £32m

3 3 33 European Investment Bank 3 As a provider of cheap debt, return expectations for the fund are low, but the private sector finance provider still makes a commercial return, and the fund manager is incentivised to maximise carbon reduction and energy efficiency impacts InsulationBuilding management technologies Cooling equipmentLow carbon heating A GBP 100m UDF designed to provide low cost loan financing for retrofit and low carbon heating projects in local authority, university, hospital, social housing and other public buildings (either directly or via ESCOs). London Energy Efficiency Fund Low cost financing in exchange for carbon reduction benefits

4 4 44 European Investment Bank 4 London Energy Efficiency Fund Amber Infrastructure –Fund Manager Leading JESSICA fund manager; LEEF, Wales, Scotland FSA regulated infrastructure investor and manager in PFI/ PPP Project appraisal and financial structuring Independent Investment decision making Arup –Technical Advisor Project sourcing and pipeline development Assistance and guidance on accessing LEEF Technical due diligence pre-investment Project monitoring post investment RBS –Funder Expertise in public sector and green finance Provider of match funding to public investment Identification and appraisal of projects Credit risk assessment, pricing and structuring

5 5 55 European Investment Bank 5 Investment Strategy Output targets: £1500/tonneCO2 20% carbon dioxide saving 20% energy saving Eligible technologies: Building energy efficiency Building integrated low and zero carbon technologies Any locations within 33 London Boroughs:Borrowers can be public, private or JV entitiesBroad definition of Public Sector BuildingOpen choice of procurement and delivery routes; RE:FIT and EPC optional

6 European Investment Bank 6 RE:FIT building energy efficiency programme Energy Performance Contracting approach: The public sector building owner identifies a portfolio of buildings they would like to retrofit, sets a target percentage energy savings and a payback period An Energy service companies (ESCos) carry out the works and guarantee the resulting energy savings This guarantees the payback of the initial investment with the delivery risk transferred to the ESCo. Hence this is a cost neutral means to reduce energy bills and carbon footprint of buildings RE:FIT BUILDING ENERGY EFFICIENCY FOR TOMORROW

7 7 77 European Investment Bank 7 Eligible Expenditures Typical ECMs Variable speed pumps and fans PC shutdown software Voltage optimisation Insulation Draft proofing Lighting upgrades & controls Building Management System Controls and strategic review Heat recovery Boiler replacements 1E Nightwatchman software for PC auto shutdown Combined Heat & Power Solar thermal Photovoltaic cells

8 European Investment Bank LONDON GREEN FUND Contact details:


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