A green investment fund is helping the UK capital achieve its CO2 emission reduction target.
Funding pot helps to kick start carbon reduction projects across London
- 02 September 2013
The Fund needs to attract generous returns for the private sector. The CO2 savings and diversion from landfill may be a side benefit for businesses, but they will be crucial for the city. For the Mayor of London, the economic development and energy efficiency outcomes are important. It's also important that we generate a return from our investment, ensuring good value for taxpayers.
Carbon reduction
The fund’s main aims are to invest in two areas: energy efficiency and waste reduction, which have been identified as the most important carbon reduction opportunities for London by the city's mayor, Boris Johnson. Projects that have so far been supported by the fund include the building of waste-to-energy and waste-to-fuel facilities and re-use, recycling and reprocessing plants. In addition, investments have been made to make public and voluntary sector buildings, as well as social housing, more energy efficient and environmentally friendly.
The London Green Fund was launched in 2009 and is the first JESSICA (Joint European Support for Sustainable Investment in City Areas) holding fund to be established in the UK. The JESSICA initiative allows EU members states to make contributions from their structural fund programmes, along with funding from other public or private sources, to invest in sustainable regeneration projects.
Support from loans
The scheme works by making loan and equity investments via three separate funds: one investing in energy efficiency, one investing in waste reduction, and the final fund specifically supporting energy efficiency measures for social housing. All three funds are managed by independent professional fund managers who decide how to invest in particular projects, based on an investment policy agreed with the London Green Fund. Any return on investments is reinvested into other green urban development projects.
From a EUR 120 million starting point it is expected that the London Green Fund will, by leveraging in private investment, make a total injection of between EUR 360 and EUR 480 million into London’s green economy. Other aims for the fund are: to reduce CO2 emissions by 28 000 tonnes a year; divert 245 000 tonnes of waste from landfill a year and to create 100 non-construction jobs.
Total investment and EU funding
Total investment for the project “JESSICA / London Green Fund” was EUR 119 000 000, of which the EU’s European Regional Development Fund contributed EUR 59 000 000 through the “London” Operational Programme for the 2007 to 2013 programming period. The now defunct London Development Agency provided EUR 38 000 000 and EUR 21 000 000 came from the London Waste and Recycling Board.