Green Investment Bank to fund small-scale biomass boilers
Equitix-managed fund Energy Saving Investments, in which the UK Green Investment Bank is a cornerstone investor, announced an investment of £4.9 million($7.4 million) into its first energy efficiency project. This investment mobilizes a further £5.1 million of investment from the Equitix Energy Efficiency Fund. The project will see inefficient heating systems, in both public and private community facilities, replaced with biomass boilers.
The £10 million investment is being made through Roundwood Energy Limited, an energy services company responsible for financing, installing, maintaining and fuelling the new renewable heating systems for up to 20 years. Roundwood is supported by its technology partner, Woodpecker Energy Limited, a well-established UK based manufacturer of wood pellet and wood chip biomass boilers.
The ESI fund forms part of GIB’s allocation of investment into one of its priority sectors, non-domestic energy efficiency . GIB awarded the competitive fund mandate to Equitix to invest £50 million, matched by private investors, to drive investment in small-scale low carbon infrastructure requiring less than £30 million of financing. Equitix has also established EEEF to make investments into the energy efficiency sector, including as co-investors alongside ESI.
The investment could fund over 60 projects, benefitting a varied mix of public and private sector organisations. In addition to supporting the green economy and significantly reducing carbon emissions, switching to biomass boilers could save customers up to 30% on their energy bills. Applications are now open and customers will not need an upfront capital investment to make the switch.
The boilers will be fuelled by sustainably sourced wood pellets and as a result CO2 emissions are expected to be cut by around 150,000 tonnes CO2 over the 20 year life of the investment. They will use sustainable ENplus A1 standard pellets, manufactured in the UK. These pellets produce the least amount of ash and fulfill the highest European requirements. Woodpecker is based in Yeovil, Somerset and it manufactures its core range of pellet boilers in Northern Ireland.
Shaun Kingsbury, chief executive, UK Green Investment Bank, said, “The Green Investment Bank is helping to fund energy efficiency measures for everyone from our largest companies, to individual households through the Green Deal.
The announcement will provide a low-cost and straightforward way for a range of organisations like schools, leisure centres and local businesses to switch their old, inefficient and high emission boilers for new energy efficient biomass ones; saving energy, cutting emissions and saving them money.”
Geoff Jackson, chief executive, Equitix, said, “Starting this programme demonstrates the viability of these projects to commercial customers who wish to achieve energy savings and a reduction in carbon emissions. The growing pipeline of similar future projects makes this an attractive sector for our investors.”