“There are seven million street lamps in the UK and less than 10% are energy effi cient LEDs so there is a huge opportunity,” explains Kingsbury. “The UK spends around £300m a year on lighting and 30% of it goes into the sky. If you switch to LEDs you can save up 80% of the electricity cost.”
Kingsbury is a long standing investor in renewable energy and he stood down as a partner of private equity fi rm Hudson Clean Energy Partners to become GIBs fi rst chief executive in October 2012.
“I’m an investor not an activist,” he says, emphasising that his role is to build a successful, profi table, growing business.
“I have been interested in this space for getting on for 15 years. The chance to build the world’s fi rst dedicated Green investment Bank is a tremendous opportunity but it doesn’t feel hugely different from other fi nancial services businesses. The one big difference is our double bottom line. We’ve worked hard to make sure that our approach to assessing, monitoring and reporting the green dimensions of a project is every bit as robust as our assessment of a project’s fi nancials.”
Much of the challenge for his 90 staff in London and Edinburgh lies in the need to convince a market recovering from global economic turmoil to invest in long term projects. It has proved diffi cult.
“One of the challenges of the credit crunch is that people have been less willing to lend on longer terms so there is an increasing gap in the market for long dated institutional capital for people who want to hold assets to maturity and for the full yield,” he explains.
Kingsbury’s innovative solution was to support a £50m investment by government to create a new fund called Greencoat Capital. This is the fi rst UK listed renewable energy yield company that specifi cally invests in assets and hold onto them for the yield.
The initial investment raised £250m and it has since been copied around the world so that some of £1.2bn has now been raised to plug the investment gap with a new asset class.
Kingsbury is very clear that, with only £750m of his £3.8bn government “seed capital” invested to date, the bank’s work has just begun. However, as more green and profi table schemes come forward it is likely he will make the
© 2014 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member fi rm of the KPMG network of independent member fi rms affi liated with KPMG International Cooperative, a Swiss entity. All rights reserved.
case to government to allow it to borrow. But that is for the future.
I’M AN INVESTOR NOT AN ACTIVIST,” HE SAYS, EMPHASISING THAT HIS ROLE IS TO BUILD A SUCCESSFUL, PROFITABLE, GROWING BUSINESS.
“I am not short of capital today but yes, we will have to look for other sources of capital because the scale of the challenge is huge, we’ll get to that in due course,” he says. “Our plan is to build an enduring institution. It’s early days but we have started well. This model works and other countries are watching.”
Shaun Kingsbury Chief executive, Green Investment Bank
Shaun Kingsbury served as an Investment Partner at Hudson Clean Energy Partners, a leading clean energy private equity fi rm where he was responsible for its European activities. He is a long time renewable energy investor and advisor having been a founding partner of Pulsar Energy Capital and an advisor to 3i on a number of renewable energy transaction opportunities in Europe.
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