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UK green bank predecessor in first investment

A Foresight-managed government-backed renewable energy fund has completed its first investment in a £21m food and green waste processing plant in Dagenham. The fund is investing in the run-up to the £3bn Green Investment Bank, expected to open for business later this year.

A UK government backed renewable energy fund managed by English private equity and infrastructure fund manager the Foresight Group (Foresight) has just completed its first investment, the Department for Business, Innovation and Skills (BIS) announced yesterday.

The project is a £21 million (€26 million; $33 million) food and green waste processing plant in Dagenham that will see the Foresight-managed UK Waste Resources and Energy Investments fund commit £2 million of equity to the project matched by £2 million of private sector funding. Foresight Funds is also investing £9 million of equity in the project with the London Waste and Recycling Board and Investec Bank lending £7.9 million of senior debt.

“This project represents the first wave investment in the run up to the establishment of the UK Green Investment Bank, and sends a clear message to the market and to potential co-investors that we are committed to investing in the UK’s green infrastructure,” Business Secretary Vince Cable commented in a statement.

The Cable-led BIS is a cornerstone investor in the UK Waste Resources and Energy Investments fund.

Earlier this year, UK Green Investments (UKGI), a specialist team within BIS, awarded a £50 million mandate to Foresight to be invested in green infrastructure projects across the UK. At the time, Foresight said it would add to the £50 million a further £50 million from “public and corporate pension funds and other institutional investors”.

Greensphere, another fund manager, was awarded a similar £30 million mandate by UKGI at the time of the Foresight appointment in April.

The UK government is investing in green infrastructure through UKGI ahead of the much-touted Green Investment Bank, which should open for business later this year. The bank, 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.

Foresight has more than £650 million in assets under management across limited partnerships, enterprise investment schemes and venture capital trusts. It is no stranger to institutional mandates, having been appointed in March to manage £35 million from the London Green Fund – a holding fund managed by the European Investment Bank – alongside £25 million of funds from institutional investors.