The UK Green Investment Bank (GIB), leading global investment firm KKR, and specialist investment manager Temporis Capital LLP have today announced a new £200m lending programme for community-scale renewable energy projects in the UK.
This is the first time that GIB has supported the community-scale renewables sector and the first investment of KKR in the UK renewable energy sector.
GIB and KKR will each be providing up to £100m to the lending programme, which will be managed by Temporis Capital.
GIB gained approval from the European Commission in May 2014 to expand its investment mandate to include community-scale renewables, mainly small-scale hydro-electric and wind projects, in response to a funding gap in the market.
Temporis expects the first project to benefit from the new lending facility will be in Scotland and for the loan agreement to be signed shortly.
Sean Kingsbury, Chief Executive, UK Green Investment Bank explained:
Many well-structured community-scale projects have not been able to get off the ground because of a lack of long-term finance in the market. These small-scale projects can make a meaningful contribution to the UK’s green economy and I am pleased that we, along with our partners KKR and Temporis Capital, will be able to provide this funding to projects which might otherwise have been locked out of the market. I’m particularly pleased to see new lenders, like KKR, coming to invest in the UK renewable energy market.
KKR, which is making the investment primarily from its balance sheet, has invested in renewable energy across the world, including US, Mexico, Australia, France, Italy, Spain, Portugal, and South Africa. Today’s announcement marks KKR’s first investment in the UK renewable energy sector.
Nat Zilkha, co-Head of Credit for KKR, said:
We are excited to partner with Temporis and the Green Investment Bank to launch this lending platform for community-scale projects. The investment builds on KKR’s view that renewable power is a critical part of the energy mix and that non-bank lending can provide capital to projects with clear tangible benefits for local communities. We look forward to providing more financing to companies and infrastructure projects in the UK.
David Watson, Chief Executive, Temporis Capital, said:
Today’s announcement represents an important milestone for the UK as we launch the first non-bank lending platform dedicated exclusively to the renewable energy sector. With the support of KKR and GIB, I am confident we will be providing much needed funding to UK community-scale wind and hydro projects.