Future Capital Partners (“FCP”), the £6 billion alternative investment boutique, has welcomed the recent high-level recommendations calling for the expansion of the UK’s green investment industry.
Within the last fortnight, two major reports have been published – “Unlocking Investment to Deliver Britain’s low-Carbon Future”, the report produced by the government-convened Green Investment Bank Commission chaired by Bob Wigley, and a World Economic Forum (“WEF”) report on bio-energy “The Future of Industrial Bio-refineries”.
Both have recommended a substantial increase in investment into developing the UK’s renewable energy industry. The studies have highlighted the need for greater investment into the UK’s environmental infrastructure, and called on the private sector to support the development of renewable energy opportunities. Bob Wigley stated in the report that “there can hardly be a more important or more challenging question than how the UK will fund its climate change obligations between now and 2030.”
Additionally, a group of senior UK politicians, including Secretary of State for Energy and Climate Change Chris Huhne and Business Secretary Vince Cable, have also supported the call for a greener economy. As a prominent member of the green investment industry, FCP believes the current focus on the renewable energy industry will help to raise the profile of the industry among investors, and ultimately help the UK achieve its carbon reduction obligations by making more people aware of the need for major investment in the industry.
FCP manages an investment partnership – Future Fuels – established to build a Renewable Transport Fuel plant in Grimsby, North East England. The industrial scale plant, only the fourth to be built or planned in the UK, will produce ethanol, which will help to reduce the UK’s reliance on imported oil in transportation and will cut carbon emissions. In the case of this project, the name plate production of 200 million litres of ethanol, when blended, is the equivalent of removing over 60,000 cars from the road every year. The partnership expects to provide its investors returns of over 30% per annum over a five to seven year period, and thus far over £30 million has been committed to the project by investors.
The UK is in need of a massive increase in its renewable energy production if it is to meet its 2020 carbon reduction targets. EU and UK directives* have mandated that by 2020 13% by volume (estimated at 23 billion litres) of all the Europe’s petrol fuel must come from renewable sources. Currently, just 2 billion litres (or 3.5%) of the Europe’s petrol fuel comes from renewable sources, requiring the Renewable Transport Fuel industry to grow ten-fold in the next decade.
The Green Investment Bank Commission’s report has estimated that £550 billion of investment is needed to provide Britain with the infrastructure to meet its targets. The Commission called on investors to support the development of the industry, stating one of its aims as “making small, low carbon investments attractive to investors”. The WEF report similarly called on investors to contribute to, stating that “businesses need to appreciate newly crafted markets as a potential source of revenue and an opportunity to boost their portfolios”
Tim Levy, Chief Executive at Future Capital Partners said: “Although green investment is still a fairly nascent industry, it is no longer the niche market it once was. The global focus on providing renewable energy, and the need for the UK to meet environmental obligations by 2020, has seen the industry emerge as part of the financial mainstream. Those of us in the industry have long touted the benefits, both environmental and financial, of investing in green products. The recommendations made by the Wigley Report and the WEF have added weight to the industry’s voice, and the support of major institutions and leading political figures will drive more people to look at investing in the industry.”
Future Capital Partners specialises in alternative investments such as renewable energy, real estate, healthcare and media & entertainment. Future Capital Partners has completed transactions and made investments worth in excess of £6 billion since 2000 and has executed over 500 asset finance transactions.
The firm’s current product offerings include Everest Real Estate Partners, Omega Design & Build Partners and Meridian Real Estate Partners, three investment opportunities to participate in a Real Estate Development in Montenegro; Dean Street Productions, which provides production services in relation to upcoming Hollywood blockbuster movies produced by premiere independent film companies, including the recently released Iron Man II.