Why renewable energy? - Envirolink

Green Investment Bank update
• Background – Perceived “market failure” constraining flow of capital to renewables sector
60
� Funding gap
� Regulatory, political risk
� Confidence/risk in unproven technologies
� Ability to pool small projects to make them attractive to institutional investors
• Part of the proposed solution is to set up the Green Investment bank
� Improved risk/return profiles - Risk mitigation products
� Innovative finance mechanisms – Upfront refinancing commitment guaranteeing exit for long term debt finance
� Inadequate debt and equity funding – Additional capital on market terms
• £3bn initial capitalisation: £1bn in April 2012; remaining £2bn from asset sales over time
• Investment aims:
return
Green impact
• UK Green Investments (“UKGI”): ahead of obtaining State Aid approval for the Green Investment Bank,
Government will invest as UKGI in green infrastructure projects. Non-domestic energy efficiency will be one of the
priority sectors for UKGI, which will make available up to £100 million in the next financial year for commercial and
industrial energy efficiency projects
© 2011 Deloitte © 2011 Deloitte LLP. LLP. Private Private and and confidential.
confidential