UK pension funds invests in renewable energy
Greater Manchester and London Infrastructure Limited (GLIL) has committed £60 million ($128.3 million) towards funding the construction and operation of British renewable energy assets.
Iona Capital will be responsible for sourcing and management of the individual projects.
The investment will first fund £9 million towards Essex biomass plant Leeming Biogas, with five to 10 other projects. The projects are aimed to create a balanced and diversified portfolio mix using various counterparties and feedstock suppliers.
GLIL is a £500 million infrastructure investment joint venture between Greater Manchester Pension Fund (GMPF), and the London Pensions Fund Authority (LPFA).
GMPF assistant executive director, Paddy Dowdall, said "we have underwritten this investment with a double-digit return and an expectation of early cash flows — attractive characteristics for out portfolio".
LPFA chief investment officer, Chris Rule, said infrastructure investment provided an attractive opportunity to drive both capital and inflation linked cash flows and well suited to its long-term investment horizon.
"We are building a diversified portfolio of operational and greenfield assets and are delighted to make this first investment, which will provide equity capital for the development of essential new build energy infrastructure in the UK," he said.
The investments will utilise proven biological and thermal conversion technologies such as anaerobic digestion and biomass combined heat and power.
The venture will finance projects from planning consent through construction, with the intention of holding the operation plants through their economic life.
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