London Green Fund Supporting Green Infrastrucutre


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London Green Fund Supporting Green Infrastrucutre

  1. 1. London Green Fund Supporting Green InfrastructureGlobal Energy Basel:The Sustainable InfrastructureFinance Summit21-22 February 2012
  2. 2. Scale50 % of the worlds population lives in cities75% of the worlds energy are consumed by cities80% of the world’s GHG are emitted by cities source: Clinton Climate Initiative 2
  3. 3. London’s Carbon Footprint 8% of total UK CO2 emissions are from London 2006 carbon dioxide emissions from London Excluding Aviation Including Aviation Ground Based Ground Based Transport Domestic Transport Domestic 14% 22% 25% 38% Industrial 7% 34% 22% 33% Aviation 5% Commercial Commercial Industrial 44 mt CO2 67 mt CO2 (8% of UK emissions) (11% of UK emissions) Note: 2006 figures are based on latest available LECI data (for 2003) projected to 2006 based on projections for each sectorSource: London Energy and CO2 Emissions Inventory; DEFRA; TfL Policy Unit Analysis 0
  4. 4. London is committed to playing its roleToday 2020 2025 2050 European 20-20-20 London Mayor’s Climate UK Climate Change Act Target (2009) Change Target (2008) • Reduction in greenhouse gas emissions by 60% below 1990 levels by 2025 • Reduction in greenhouse gas • Reduction in greenhouse gas emissions by 20% below emissions by 80% below 1990 levels by 2020 1990 levels by 2050. • 20% increase in renewables • 20% cut in energy consumption The Mayor is committed to London becoming the greenest city in the world and a city that becomes a world leader in improving the environment.4
  5. 5. London Climate Change Programmes Energy Efficiency Low Carbon Energy Supply Waste Adaptation Economy London Mayoral StrategiesStrategy London Plan (July 2011) Climate change, London Waste Economic Spatial and Public mitigation and Energy Master Strategies Development Realm Strategy energy strategy Planning (municipal & business) Strategy Wide range of projects, including: REFIT, RENEW, Crystal Palace CHP, London Waste and Recycling Board, Green Enterprise District, East London green Grid London Green Fund 5
  6. 6. London Green Fund The London Green Fund London London Waste & Recycling Board Development ERDF established in late 2009 to Agency invest in carbon reduction £18m £32m £50m projects in line with the Climate London Green Fund Change component of the £100m* Managed by EIB London Plan £35m £50mPrivate Waste Urban Development Fund Energy Efficiency Urban Development Private  Focused on energy efficiency,finance finance Fund waste and decentralised energy: Min Equity type Loan type Min £50m the “3 biggest carbon investment investment £35m reduction opportunities for High risk Urban Projects Urban Projects Low risk London” * The remaining £15m will be invested in one or both UDFs in due course Aiming to deliver on job creation, tons of carbon saved, and financial return 6
  7. 7. London Green Fund: Place in Finance landscape Increasing commercial viability London Green Grant Commercial Fund • High risk, with little • Fluid risk profile and • Clear and market demand little or no robust market understandable risk evidence or funding demand evidence profile security • Requirement for long • Strong rationale for • Returns are ‘non- term debt and equity, or commercial funding to financial’ additional funding be made available security or guarantees • Outputs essential to are required • Normal levels of economic development commercial return that policy • Returns are longer term commensurate with risk or do not match of project • Lack of alternative commercial needs funders
  8. 8. Waste UDF – Foresight Environmental FundIn line with the Mayor’s municipal waste strategy, and in close collaboration with theLondon Waste and Recycling Board… ....the waste UDF will primarily Bank lending finance, via equity or equity-type investment, the construction or Project expansion of: sponsors • Waste to energy/fuel facilities Investment (excluding incineration)Venture capital programme • Value added re-use, recycling or trusts £204m reprocessing facilitiesPension funds/ Pari pasu: private £118m investors UDF:London Green Fund £70m£35m 8
  9. 9. Model for the future? Financial Private Engineering Investors Instrument PublicResources Recycle
  10. 10. Case Study:Bottle to Bottle Recycling 10
  11. 11. Why recycle plastic packaging?Recycling 1 tonne of rigidplastic packaging saves up to 1.5tonnes of carbon dioxidePackaging buyers increasinglyrequire carbon footprintreductionsUsing 50% recycled content in anitem of packaging reduces itscarbon footprint by 25% Closed Loop Recycling
  12. 12. Closed Loop at DagenhamFirst facility in the World toproduce food-grade rPET andrHDPEProcesses in excess of 90tonnes of plastic waste perdayTechnology capable ofclosing the packaging loopOperating since December2008
  13. 13. Closed Loop Recycling Model
  14. 14. The process in summaryOperational know-how developed over 2 years (>17,000 hours)Dry CleaningOptical SortingManual sortingGranulationWashingPurification Closed Loop RecyclingQuality Assurance
  15. 15. UK plastic bottle collection growthSource: RECOUP - 2010 UK Household Plastics Packaging Collection Survey
  16. 16. Other reprocessing driversIncreased focus on domestic recycling - UKBottle collection rates continue to increaseProposed Defra target for UK bottle collectionby 2020 is 75% (est. 545,000 tonnes)Landfill taxStrong and growing demand for food-graderecycled plastic:- Coca Cola commitment to 25% rPET content- UK Milk Roadmap targets 50% recycledcontent in all milk bottles by 2020 Closed Loop Recycling 16
  17. 17. Planned ExpansionDouble processing capacityIntegrated specialist plasticsMRFMarket leader in a growthsector
  18. 18. Contact Kenroy Quellennec-ReidSenior Financial Engineering Manager Greater London Authority Tel: +44 (0)207 983 – click on EU flag! twitter@LondonEUFunds