The funds will work with Iona Capital who will be responsible for sourcing and management of the individual projects.
The investment, which is the first made by the GLIL, will immediately fund £9m towards Essexbiomass plant Leeming Biogas, with several more projects in the pipeline. Iona will lead a series of investments in UK bioenergy infrastructure projects.
The investments will utilise proven biological and thermal conversion technologies such as anaerobic digestion and biomass Combined Heat and Power. The joint venture will finance projects from planning consent through construction, with the intention of holding the operational plants through their economic life.
GMPF Assistant Executive Director, Paddy Dowdall, said: “Iona was an early mover into the biomass sector and has developed a strong track record. They were obvious partners and we are excited by the pipeline of potential investments. We have underwritten this investment with a double-digit return and an expectation of early cash flows – attractive characteristics for our portfolio.”
LPFA Chief Investment Office, Chris Rule, said: “Infrastructure investments provide an attractive opportunity to drive both capital appreciation and inflation linked cash flows and are well suited to our 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.”
The £60m investment will target five to ten projects, to create a balanced and diversified portfolio mix using various counterparties and feedstock suppliers. GLIL is actively reviewing several other UK infrastructure opportunities with further capital deployment anticipated in the coming weeks as it seeks to fully deploy the initial £500m commitment over the next two years.
