Fundraising

Aviva, GIB team up on energy efficiency deal

The investment arm of the UK insurance company and the UK’s Green Investment Bank are providing £36m for an energy innovation centre at Addenbrooke’s Hospital.

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Aviva Investors, the investment arm of UK insurance company Aviva, is investing £18 million (€21.1 million; $27.4 million) in a new energy efficiency centre at Addenbrooke’s Hospital in Cambridge, England, alongside an additional £18 million from the UK’s Green Investment Bank (GIB).

The new centre is being developed on behalf of the Cambridge University Hospitals NHS Foundation Trust and is expected to deliver “substantial” financial and carbon emissions savings for the Trust. A press release issued on behalf of the investors described it as one of the largest projects of its type in the UK.

Ian Berry, fund manager – infrastructure and renewable energy at Aviva Investors, said: “The development of UK energy centres is a very exciting new area for long-term investors such as pension funds. They can achieve stable, diversified and relatively low risk income streams, while also helping to fund important infrastructure projects that deliver long-term savings and sustainability benefits to their clients.”

GIB’s £18 million share of the investment will come from a £50 million commitment it made to the Aviva Investors REaLM Energy Centres Fund, while Aviva Investors’ share comes from its REaLM Infrastructure Fund.

The new centre will house a combined heat and power unit, biomass boiler, efficient dual-fuel boilers and heat recovery from medical incineration. The centre will provide heat and power to the Trust’s Addenbrooke’s and Rosie hospitals and, over the 25-year operational term of the project, is expected to save over £20 million in energy costs and more than 25,000 tonnes per annum in carbon emissions.

A contract to develop and operate the centre over the 25-year term has been awarded to Mitie, a FTSE 250-listed strategic outsourcing company.

The GIB opened for business in November last year with £3 billion of government money designed to mobilise private capital and help develop a green economy. Since then, it has committed capital to projects in offshore wind, biomass and waste management.