UK government awards two £50m green mandates

The UK Green Investments team, part of the government’s Department for Business, Innovation and Skills, has awarded a total £100m to UK managers Equitix and Sustainable Development Capital for investment in energy efficiency.

Fund managers Equitix and Sustainable Development Capital have both been awarded £50 million (€63 million; $78 million) mandates for investment in energy efficiency by the Green Investments team, part of the UK government’s Department for Business, Innovation and Skills.

The capital will be invested in energy saving and carbon reduction schemes alongside matching co-investments from institutional investors. Investments will be made in the non-domestic energy efficiency sector and will include areas such as energy performance contracting and biomass-to-heat schemes, helping meet carbon reduction commitments and the European Union’s 20:20:20 goals.

In a statement, Equitix chief executive officer Geoff Jackson said the mandate was “a good fit with our wider long term fund management philosophy” and said a dedicated team was in place to support the strategy.

Equitix is primarily known as a UK Private Finance Initiative (PFI) investor. In January this year it announced that it had already reached an original £250 million hard cap for its Fund II and was pursuing a new £350 million hard cap having gained approval to do so from limited partner investors.

Sustainable Development Capital is an investment banking and advisory firm focused on large-scale development projects.

The latest announcement follows on the heels of an £80 million green infrastructure mandate awarded by UK Green Investments (UKGI) in April. In that case, UK fund managers Foresight Group and Greensphere Capital were handed £50 million and £30 million respectively.

The UK government is investing in green infrastructure through UKGI ahead of the much-touted Green Investment Bank (GIB) obtaining state aid approval. The GIB, which aims to accelerate private capital investment in the UK’s transition to a green economy, will be based in Edinburgh and London and be capitalised to the tune of £3 billion.