The Green Investment Bank (GIB) was the cornerstone investor in a £6.5 million ($11 million ; €8 million) investment into two anaerobic digesters in Northern Ireland. Anaerobic digestion is a process that generates electricity and fertiliser from organic waste and can create a new revenue stream for farmers as well as reducing their gas emissions.
The investment is part of a UK government-initiative to help farmers in the region become more sustainable and to create jobs and income from their waste.
This is GIB’s fourth investment into anaerobic digesters and second this year after it injected £7.5 million into a £15 million project in Enfield, North London in May. The bank’s first ever investment was the now-completed TEG Biogas plant in Dagenham that launched 18 months ago.
“We are very proud of this investment that was completed on time and on budget. It is nice to see it up and running and the end of the full investment cycle,” said Ronit Wolfson, spokesperson at GIB.
All investments in this area are managed by Foresight Group, the environmental infrastructure asset management firm that has a £68 million mandate with GIB.
Foresight invested £3.2 million in both Northern Ireland anerobic digesters from its UK Waste Resources and Energy Investments Fund. The other investor in the consortium were William Industrial Service, a local engineering company, that contributed the remainder.
Foresight came across the two potential deals on the back of research from KPMG that highlighted the struggle among farmers to get projects such as these over the line, according to Ben Thompson, group marketing director at Foresight.
“We started working on a platform that would give these on farm projects the support to reach the financial close nine months ago but it has been a long process,” he said.
The two projects announced today will generate enough renewable energy to power 1700 households for a year and the reduction in greenhouse gas production from the projects will be equivalent to taking 2000 cars off the road for a year, according to a press release.
GIB was established by the UK government in 2012 with the aim of investing £3.8bn of public money into environmentally beneficial projects that are profitable. The fund does not issue any grants or loans and is operated like a publicly listed company, according to Wolfson. It does not have a target return but in 2013 returned an average of 8 percent, she added.