Sustainable energy in Cambridgeshire, UK received a major boost recently with the local authority decision to seed an investment fund for local low carbon infrastructure with almost EUR 18 million. The decision stems from the findings of the project Mobilising Local Energy Investment (MLEI) Cambridgeshire. Supported by Intelligent Energy Europe, this project has been running since late 2012, to respond directly to the need for upfront investment in low carbon infrastructure and on a scale that brings real local economic benefits and carbon reductions, and helps tackle energy security issues.
According to the project director, Sheryl French:
‘We know there is huge potential too; research completed in 2011 estimates that we could deliver 28% of Cambridgeshire’s energy needs from renewables by 2031, compared to 7% at present. MLEI Cambridgeshire is about finding ways to unlock this opportunity, and so bring multiple benefits to our communities and businesses. ‘
A consortium of local authorities is delivering the project lead by Cambridgeshire County Council. South Cambridgeshire District Council, Huntingdonshire District Council and Cambridge City Council are also involved.
The project is essentially aimed at testing the business case for a local Low Carbon Investment Fund by using public money and public sector projects to leverage private investment and develop a bankable pipeline of projects. An additional benefit for the local authorities involved is the option to create revenue streams from low carbon energy investments, which can be reinvested into further projects, and/or used to support public service delivery. Project manager Jane Frank said,
‘The MLEI project will test how the public sector can intervene to enable investment in projects on a greater scale and at a faster pace and for greater local benefit. To do this we will use Council owned land and buildings, and public sector financial capabilities, to create the conditions that will stimulate further private sector investment. In other words, we will create more confidence for investors in Cambridgeshire low carbon energy projects.’
A local needs assessment took place prior to the MLEI project stage. The team spent nine months building up the evidence base for local energy needs - to sustain and grow businesses, manage rising fuel costs and secure local energy supplies for local jobs. This research and analysis lead to the proposal for a Low Carbon Investment Fund and Low Carbon Development Unit – a financial and delivery arrangement that would help deliver low carbon energy projects on a greater scale and at a faster pace than ever before in Cambridgeshire.
Now that there’s the prospect of some real money on the table to fund these ambitions, the project team is re-engaging with local stakeholders, to get their input on the proposals and help develop a pipeline of projects. Click here for details of the event on 21 November.
Potential projects identified so far include energy performance contracting for schools and other public sector buildings, community buildings retrofit, and even a solar farm.
Jane Frank, project manager at MLEI Cambridgeshire noted that setting up an investment fund requires local authorities to acquire new skills and capacities in bringing forward investment grade projects and enabling appropriate forms of finance. As is true sustainable energy projects in many rural areas, it will be necessary to bundle projects together to achieve investment scale.
How it works:
It is envisaged that the Low Carbon Investment Fund will invest alongside structural funds and development banks (European Investment Bank, Green Investment Bank) and leverage private sector funding (debt or equity). Funding will be provided for a mixture of short, medium and long term projects of up to 25 years. Once the fund has placed its initial investments, the authorities can retain the fund to generate income, grow the fund further or exit the fund by selling the portfolio of investments, i.e. re-finance, via community share offer, bond issue or sale to a fund to reínvest in more projects.