The London Green Fund a JESSICA Holding Fund

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The London Green Fund – a JESSICA Holding Fund Frank Lee JESSICA and Investment

The London Green Fund – a JESSICA Holding Fund Frank Lee JESSICA and Investment Funds division, European Investment Bank Brussels, 29 November 2011 European Investment Bank

The London Green Fund §The London Green Fund (a JESSICA holding fund) established in

The London Green Fund §The London Green Fund (a JESSICA holding fund) established in late 2009 to invest in carbon reduction projects in line with the Climate Change component of the London Plan London Waste & Recycling Board £ 32 m £ 50 m London Green Fund £ 100 m* Managed by EIB £ 35 m Private finance Min £ 35 m High risk Waste Urban Development Fund Equity type investment Urban Projects £ 50 m Energy Efficiency Urban Development Fund Loan type investment Urban Projects Private finance Min £ 50 m Low risk § Focused on energy efficiency, waste and decentralised energy as the “ 3 biggest carbon reduction opportunities for London” §Governed by representatives from the Greater London Authority, the Environmental * £ 15 m remains available for further investment Agency and the London Waste Aiming to deliver outputs/impacts on job creation, tons and Recycling Board. The of carbon saved, and minimum energy usage savings Mayor’s environmental advisor sits on the Investment Board European Investment Bank § 22 2

London Energy Efficiency Fund A GBP 100 m UDF designed to provide low cost

London Energy Efficiency Fund A GBP 100 m UDF designed to provide low cost loan financing for retrofit and low carbon heating projects in local authority, university, hospital, social housing and other public buildings (either directly or via ESCOs). Low cost financing in exchange for carbon reduction benefits Insulation Building management technologies As a provider of cheap debt, return expectations for the fund are low, but the private sector finance provider still makes a commercial return, and the fund manager is incentivised to maximise carbon reduction and energy efficiency impacts Cooling equipment European Investment Bank Low carbon heating 33

London Energy Efficiency Fund Amber Infrastructure –Fund Manager • • Leading JESSICA fund manager;

London Energy Efficiency Fund Amber Infrastructure –Fund Manager • • Leading JESSICA fund manager; LEEF, Wales, Scotland FSA regulated infrastructure investor and manager in PFI/ PPP Project appraisal and financial structuring Independent Investment decision making Arup –Technical Advisor • • Project sourcing and pipeline development Assistance and guidance on accessing LEEF Technical due diligence pre-investment Project monitoring post investment RBS –Funder • • Expertise in public sector and green finance Provider of match funding to public investment Identification and appraisal of projects Credit risk assessment, pricing and structuring European Investment Bank 44

Investment Strategy Output targets: • £ 1500/tonne. CO 2 • 20% carbon dioxide saving

Investment Strategy Output targets: • £ 1500/tonne. CO 2 • 20% carbon dioxide saving • 20% energy saving • Eligible technologies: • Building energy efficiency • Building integrated low and zero carbon technologies • Any locations within 33 London Boroughs: • Borrowers can be public, private or JV entities • Broad definition of „Public Sector Building‟ • Open choice of procurement and delivery routes; RE: FIT and EPC optional European Investment Bank 55

RE: FIT building energy efficiency programme Energy Performance Contracting approach: The public sector building

RE: FIT building energy efficiency programme Energy Performance Contracting approach: The public sector building owner identifies a portfolio of buildings they would like to retrofit, sets a target percentage energy savings and a payback period RE: FIT BUILDING ENERGY EFFICIENCY FOR TOMORROW An Energy service companies (ESCos) carry out the works and guarantee the resulting energy savings This guarantees the payback of the initial investment with the delivery risk transferred to the ESCo. Hence this is a cost neutral means to reduce energy bills and carbon footprint of buildings European Investment Bank 66

Eligible Expenditures Typical ECMs • Variable speed pumps and fans • PC shutdown software

Eligible Expenditures Typical ECMs • Variable speed pumps and fans • PC shutdown software • Voltage optimisation • Insulation • Draft proofing • Lighting upgrades & controls • Building Management System Controls and strategic review • Heat recovery • Boiler replacements • Combined Heat & Power • Solar thermal • Photovoltaic cells 1 E Nightwatchman software for PC auto shutdown European Investment Bank 77

LONDON GREEN FUND Contact details: Jessica@eib. org; lee@eib. org European Investment Bank

LONDON GREEN FUND Contact details: Jessica@eib. org; lee@eib. org European Investment Bank