First Minister declares Renewable Energy Investment Fund open for business
£103 million fund to help drive further investment into Scottish renewables sector
A new investment fund designed to drive greater investment in key areas of Scotland’s renewables industry will be declared open for business by Scotland’s First Minister, Alex Salmond, today 10 October 2012 in his keynote address to around 440 delegates at this year’s Scottish Low Carbon Investment Conference in Edinburgh.
The Renewable Energy Investment Fund (REIF), which will be delivered by the Scottish Investment Bank, on behalf of the Scottish Government and its enterprise agencies, is designed to support the growing marine renewable energy sector and encourage greater investment in community owned renewables, renewable district heating and other key renewable energy technologies in Scotland.
Designed to complement existing public and private sector finance schemes currently available in Scotland, it is hoped the fund will help leverage significant private sector finance for the sector and typically provide loans, loan guarantees and equity finance.
Alongside private sector parties, REIF will provide innovative interventions tailored to individual project requirements and is expected to significantly accelerate access to finance for key projects in the renewables sector that have demonstrable funding gaps.
With a number of projects already currently identified through independent market assessment and stakeholder consultation, the fund is expected to have completed a number of initial deals by the end of the financial year.
Scotland’s First Minister, Alex Salmond said: “We are determined to ensure Scotland remains among the world’s key destinations for investment in low carbon technologies, building on our long-established reputation in engineering, innovation and financial services. This fund will help leverage further significant private finance into key areas of the renewables sector where specific funding gaps have been identified.
“Alongside other initiatives such as the £18 million Marine Renewables Commercialisation fund, £70 million National Renewables Infrastructure Fund and our Community & Renewable Energy (CARES) scheme, the REIF will support a wide range of projects to create jobs, investment and sustainable energy generation and use in communities across Scotland.”
Dr Lena Wilson, chief executive of Scottish Enterprise said: “Building on the expertise of the Scottish Investment Bank, this new fund will not only help accelerate Scotland’s progress in key sub-sector areas of the renewables industry, but will be pivotal to unlocking greater investment from the private sector by sharing the risk through the co-investment, co-lending and other potential catalytic intervention model.
“This new fund is key to providing an economic, community benefit and environmental legacy based on our natural competitive advantage in renewable energy and comes at a critical time in the development of the sector.
“Scotland is continuing to push ahead in its transition to a low carbon economy, however, increasing access to finance to help expedite commercialisation of marine arrays and encourage more community owned and district heating projects is fundamental in our overall ambition to meet the target of 100% electricity from renewables sources by 2020.”
Alex Paterson, Chief Executive of Highlands and Islands Enterprise, said: “The deployment of the first commercial arrays is critical to the development of the wave and tidal industry. REIF has been established to overcome the financial challenges facing the pioneering businesses at the forefront of this developing sector.
“In the Highlands and Islands we are already seeing real benefits from both community involvement in renewables and from the dramatic impacts of the emerging wave and tidal sector in Orkney.
“With the North of Scotland at the centre of the emerging wave and tidal cluster, and communities across rural Scotland active in renewables projects, the REIF fund will be instrumental in placing Scotland at the forefront of the low carbon economy.”
REIF has been designed to bridge a recognised funding gap that the £200m of spending review funds already committed does not meet. It is complementary to other funds available, like the Green Investment Bank and is designed to support projects that are significantly advanced but have a demonstrable funding gap.
Niall Stuart, chief executive of Scottish Renewables, said: “This £103 million fund will inject much-needed investment into the development of the next generation of renewable technologies, such as marine energy and renewable heat. This kind of support can be a vital catalyst in attracting even greater levels of private investment.
“Increasing use of renewable heat could make a significant reduction in carbon emissions and in tackling fuel poverty, given that around half of all energy used in Scotland is heat homes, businesses or industrial processes.
“Scotland is already at the forefront of developing and testing emerging wave and tidal technologies and, with the correct level of government support, we can become a global centre of excellence in both the deployment of these technologies and their accompanying supply chains.”
The launch of the REIF comes less than a year after the UK Treasury agreed a Scottish Government proposal to release half of the £206 million Fossil Fuel Levy surpluses generated from Scotland's energy industry to invest in renewables projects, with the remainder being made available to capitalise the UK Green Investment Bank. Further details about the new Fund, including eligibility for funding, are available here www.scottish-enterprise.com/reif.
REIF support for marine energy projects will be focused on moving successful devices into deployments within small-scale arrays around Scotland's open waters. Support for community-owned renewables will build on the early stage support already on offer by providing financial support for community projects that have advanced to the delivery stage but still have challenging funding gaps.
Renewable district heating is widely recognised as an efficient way to make maximum use of a central renewable heat source. REIF will support a number of significant renewable district heating projects in Scotland that have advanced to the delivery stage but have a demonstrable funding gap.
In addition to the identified priorities, REIF will also consider projects in other sub-sectors that meet initial eligibility criteria and support the delivery of energy from a renewable source or is an innovative energy technology which reduces the cost of, or removes risks associated, with delivering energy from a renewable source.