A new social investment fund, backed by energy giant Centrica, has been launched by impact investor Ignite and technology firm Wayra.
The Big Energy Idea will provide 10 social entrepreneurs, who have innovative ideas on how to address energy challenges, with support and help with funding.
Ignite has £10m from Centrica to distribute over the next decade. Applications opened on Tuesday and will remain live until the end of February. Judges will whittle applicants down to 20 and then a final 10 at an event in April.
The launch of the fund follows weeks of political debate over the social and environmental taxes on consumer energy bills, namely the Energy Company Obligation (ECO), that the government claims are responsible for the recent price hikes.
British Gas, which is owned by Centrica, said in October that its customers would be seeing an average 9.2% increase on their bills.
However, Centrica said its funding for Ignite does not form part of its obligation to address fuel poverty and other environmental or energy efficiency issues. It instead described Ignite as “an effective and important investment of a very small fraction of our profits – and, importantly, of our people’s time”.
“In the UK, we need to invest to close the energy gap – £110 billion is needed over the next decade to keep the lights on and to keep homes warm as older and more polluting power stations are closed”, a spokesperson added.
“We have agreements totalling £50 billion helping to secure gas and electricity for the UK. Only a profitable business can undertake these types of long-term commitments.”
Meanwhile Sam Laidlaw, Centrica’s CEO, said that the answers to societal and energy challenges “do not lie solely with the private sector or the public sector, but with social entrepreneurs, in communities, and in cross-sector partnerships.
He added that he was “passionate about the potential for Ignite to help find and grow energy-related social enterprises to innovate and create these answers.”
Ignite’s £10m of Centrica funding is expected to be handed out to social enterprises in the energy sector, who will receive between £50,000 and £2m each. Its first investment, worth £500,000, was in Midlands Together, a community interest company (CIC) that seeks to cut reoffending rates by creating jobs and providing training to as many as 150 ex-offenders.
The sustainable bank Triodos launched a five-year bond to help finance the project in July.