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UK Green Investment Bank plans GBP1 billion fund

The UK Green Investment Bank (GIB) is planning to launch a GBP1 billion fund to acquire equity stakes in operational offshore wind projects in the UK.

GIB is seeking a suitable group of strategic, long-term co-investors to participate in the capital raising exercise.
The fund will be managed by a GIB subsidiary which is currently regulated by the Financial Conduct Authority (FCA) and will be seeking permission from the FCA to become a regulated fund manager.
With 3.6GW of installed capacity, 1.4GW in construction and a number of further projects in the pipeline, the UK sector is set to grow significantly in the coming years.
In May 2014 GIB received State Aid approval from the European Commission to promote and manage funds and other co-investment structures for mobilising upfront private sector investment into its designated sectors.
This widening of GIB’s activities will enable GIB to promote and manage funds and all other types of structured co-investments within any of its designated green sectors, allowing it to raise and deploy private sector capital in addition to its current GBP3.8bn of equity funding from the UK Government.
GIB is targeting a first close on the fund by the end of the calendar year.
Lord Smith of Kelvin, chair of the Green Investment Bank, says: “We have emerged from our start-up phase as the most active investor in the UK’s green economy. 2013-14 was a good year for GIB in a difficult market – we backed 18 new projects, more than double our first year, committing an additional GBP668m of capital.”
Shaun Kingsbury, chief executive, says: “Our role goes well beyond that of a traditional investor. We are providing a positive demonstration effect by successfully committing capital to profitable, green infrastructure investments. We are making a difference across the UK by taking on the tough projects, de-risking new technologies and lowering the cost of capital for our sectors.
“We want to do more to maximise our green impact. We plan to extend our reach into new markets like community-scale renewables. And we plan to raise new capital for the first time through the creation of a new GBP1billion fund for operating offshore wind assets.”

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