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Green Investment Bank to launch £1bn offshore wind fund

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The government-owned UK Green Investment Bank (GIB) has unveiled new plans to raise a £1 billion fund that will encourage private investors to support Britain’s offshore wind farms.

The announcement comes as the bank, launched in late 2012 to drive investment in low-carbon projects, publishes its 2013-14 results. In the financial year from March 31 2013, the bank committed £668 million to 18 new projects, making it the most active investor in the UK’s green economy.

Private investors followed, pledging a further £1.9 billion to the projects, adding up to a total of £2.5 billion of new investment. The GIB’s total capital commitments now stand at £1.3 billion. 

Most of the projects in the GIB’s portfolio remain under construction, but when completed they are expected to reduce the UK’s carbon emissions by 3.5 million tonnes per year. 

The investments range from a £20m commitment to a waste-powered energy facility in South Gloucestershire to £5 million for energy efficiency measures in Scottish whisky distilleries.

“We established the GIB to jump start investments in cleaner, greener technology,” said business secretary Vince Cable.  

“Headquartered in Edinburgh, the bank’s current investments have supported 3,500 jobs in the UK’s growing green economy and will cut CO2 emissions equivalent to taking over half the cars off London’s roads.” 

Looking forward, the bank will now launch a £1 billion fund dedicated to acquiring equity stakes in operational offshore wind projects.

The bank is already an important player in the offshore sector, having invested £461m into two “next generation” wind farms in March.

But the fund, which will be managed by a Financial Conduct Authority regulated GIB subsidiary, will seek to broaden the number of long-term investors in UK offshore wind projects by appealing to private investors. 

The country currently has 3.6GW of installed offshore wind capacity, with a further 1.4GW under construction. Much of the government’s decarbonisation hopes are pinned on offshore projects, as the government recently altered the subsidy regime for solar farms while the Conservative party has pledged to cut down on onshore wind projects if re-elected – creating uncertainty amongst investors.

It is hoped the fund will appeal to investors by offering long-term, inflation-linked returns while allowing developers to refinance part of their investments in operating assets to reinvest in new projects.

The plans have been welcomed by Huub den Rooijen, head of offshore wind at The Crown Estate, which manages most of the seabed around the UK. 

“The UK continues to be the most attractive place to invest in offshore wind globally and today’s announcement by the GIB to raise a £1bn fund to attract new private investment is another vote of confidence in the UK’s maturing sector,” he said.

“Offshore wind is already making a material contribution to the UK’s electricity demand, around 3-4% annually, and employing nearly 7,000 people directly – today’s announcement is a further boost to unlocking offshore wind’s full potential and the UK’s transition to a low carbon economy.”

However, some argue that the GIB is still not fulfilling its potential. Greenpeace UK energy campaigner Louise Hutchins said that while the new fund “shows the right priorities”, the government must give the bank a freer rein. 

“One year on, the Green Investment Bank is clearly a success story, driving investment where it is needed in Britain’s cutting edge renewable industries. But the level of investment still doesn’t match Britain’s strategic requirements,” she said. 

“George Osborne should now give the bank freedom to borrow to invest at a much bigger scale, to modernise Britain’s decaying, polluting energy system and give a boost to the economy.”

Such comments echo those of the GIB’s chief executive Shaun Kingsbury, who last week said the bank could raise up to £60 billion to fund new projects if it was allowed to borrow from capital markets.

Further reading:

Green Investment Bank could move into private capital

Green Investment Bank becomes Principles for Responsible Investment signatory

Green Investment Bank announces major investment in UK offshore wind

Green Investment Bank to support onshore wind sector

Green Investment Bank could move to private ownership, says chair

 

Environment

These 5 Green Office Mistakes Are Costing You Money

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eco-friendly green offices
Shutterstock Licensed Photo - By Stokkete | https://www.shutterstock.com/g/cyano

The sudden interest in green business is very encouraging. According to recent reports, 42% of all companies have rated sustainability as an important element of their business. Unfortunately, the focus on sustainability will only last if companies can find ways to use it to boost their ROI.

Many businesses get so caught up in being socially conscious that they hope the financial aspect of it takes care of itself. The good news is that there are plenty of ways to go green and boost your net income at the same time.

Here are some important mistakes that you will want to avoid.

Only implementing sustainability on micro-scale

The biggest reason that brands are going green is to improve their optics with their customers. Too many businesses are making very minor changes, such as processing paperwork online and calling themselves green.

Customers have become wary of these types of companies. If you want to earn their business, you are going to need to go all the way. Bring in a green business consultant and make every feasible change to demonstrate that you are a green organization from top to bottom.

Not prioritizing investments by long-term ROI

It isn’t realistic to build an entirely green organization overnight. You will need to allocate your capital wisely.

Before investing in any green assets or services, you should always conduct a long-term cost benefit analysis. The initial investment for some green services may be over $20,000. If they don’t shave your cost by at least $3,000 a year, they probably aren’t worth the investment.

Determine which green investments will have the best pay off over the next 10 years. Make these investments before anything else. Then compare your options within each of those categories.

Implementing green changes without a plan

Effective, long-term planning is the key to business success. This principle needs to be applied to green organizations as well.

Before implementing a green strategy, you must answer the following questions:

  • How will I communicate my green business philosophy to my customers?
  • How will running a green business affect my revenue stream?
  • How will adopting green business strategies change my monthly expenses? Will they increase or decrease them?
  • How will my company finance green upgrades and other investments?

The biggest mistake that too many green businesses make is being overly optimistic with these forecasts. Take the time to collect objective data and make your decisions accordingly. This will help you run a much more profitable green business.

Not considering the benefits of green printing

Too many companies believe that going paperless is the only way to run a green organization. Unfortunately, going 100% paperless it’s not feasible for most companies.

Rather than aim for an unrealistic goal, consider the option of using a more environmentally friendly printer. It won’t be perfect, but it will be better than the alternative.

According to experts from Doranix, environmental printers have several benefits:

  • They can process paper that has been completely recycled.
  • They consume less energy than traditional printers.
  • They use ink that is more environmentally friendly.

You want to take a look at different green printers and compare them. You’ll find that some will meet your needs as a green business.

Poorly communicating your green business strategy to customers

Brand positioning doesn’t happen on its own. If you want to run a successful green business, you must communicate your message to customers as clearly as possible. You must also avoid the appearance that you are patronizing them.

The best approach is to be clear when you were first making the change. I’ll make an announcement about your company‘s commitment to sustainability.

You also want to reinforce this message overtime by using green labels on all of your products. You don’t have to be blatant with your messaging at this stage. Simply provide a small, daily reminder on your products and invoices.

Finally, it is a good idea to participate in green business seminars and other events. If your community has a local Green Chamber of Commerce, you should consider joining as well.

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Energy

Responsible Energy Investments Could Solve Retirement Funding Crisis

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Energy Investments
Shutterstock / By Sergey Nivens | https://www.shutterstock.com/g/nivens

Retiring baby-boomers are facing a retirement cliff, at the same time as mother nature unleashes her fury with devastating storms tied to the impact of global warming. There could be a unique solution to the challenges associated with climate change – investments in clean energy from retirement funds.

Financial savings play a very important role in everyone’s life and one must start planning for it as soon as possible. It’s shocking how quickly seniors can burn through their nest egg – leaving many wondering, “How long your retirement savings will last?

Let’s take a closer look at how seniors can take baby steps on the path to retiring with dignity, while helping to clean up our environment.

Tip #1: Focus & Determination

Like in other work, it is very important to focus and be determined. If retirement is around the corner, then make sure to start putting some money away for retirement. No one can ever achieve anything without dedication and focus – whether it’s saving the planet, or saving for retirement.

Tip #2: Minimize Spending

One of the most important things that you need to do is to minimize your expenditures. Reducing consumption is good for the planet too!

Tip #3: Visualize Your Goal

You can achieve more if you have a clearly defined goal in life. This about how your money can be used to better the planet – imagine cleaner air, water and a healthier environment to leave to your grandchildren.

Investing in Clean Energy

One of the hottest and most popular industries for investment today is the energy market – the trading of energy commodities. Clean energy commodities are traded alongside dirty energy supplies. You might be surprised to learn that clean energy is becoming much more competitive.

With green biz becoming more popular, it is quickly becoming a powerful tool for diversified retirement investing.

The Future of Green Biz

As far as the future is concerned, energy businesses are going to continue getting bigger and better. There are many leading energy companies in the market that already have very high stock prices, yet people are continuing to investing in them.

Green initiatives are impacting every industry. Go Green campaigns are a PR staple of every modern brand. For the energy-sector in the US, solar energy investments are considered to be the most accessible form of clean energy investment. Though investing in any energy business comes with some risks, the demand for energy isn’t going anywhere.

In conclusion, if you want to start saving for your retirement, then clean energy stocks and commodity trading are some of the best options for wallets and the planet. Investing in clean energy products, like solar power, is a more long-term investment. It’s quite stable and comes with a significant profit margin. And it’s amazing for the planet!

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