Two clean energy funds, Zouk Cleantech 2 and HgCapital Renewable Power Partners, will receive capital from the UK government, as it announces it will also launch on Offshore Renewable Energy technology and innovation centre.

Vince Cable has today has announced £20m will be invested in HgCapital’s and zouk ventures’ funds as part of the £325m UK Innovation Investment Fund.

He said the government will also commit £200m over the next four years to establish a network of at least six technology and innovation centres.

Cable said about the cleantech innovation centre, ‘In creating an Offshore Renewable Energy technology and innovation centre we are taking the next step to transforming the UK into a low carbon economy. There is a clear opportunity for the government to support the UK’s offshore industry and this centre will be of great benefit to the sector and the economy.’

The announcements came in the same week Cable revealed details of the Green Investment Bank, set to underpin the government’s low carbon strategy.

He said the private sector funding represented the government’s commitment to increasing investment in clean technologies to support innovation and growth.

‘The government is committed to greening the economy – and despite the difficult financial challenges we face, we have already achieved a great amount, such as a vision for a Green Investment Bank and a commitment to world leading carbon reduction,’ Cable said.

The GIB is set to open in April 2012 with a cash injection of £3bn, which this week Deputy Prime Minister Nick Clegg said was not dependent on the sale of government assets.

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Goreway Station recently commenced commercial operation in Brampton, Ontario

Sithe Goreway Luxco will retain a 50 per cent ownership stake in the Goreway Station and Sithe Global’s Canadian operating services affiliate will continue to provide operations and maintenance services to the project, the company said. The project’s accelerated clean energy supply contract with the Ontario Power Authority and its existing debt financing arrangements are unaffected by the transaction.

Bruce Wrobel, Sithe Global’s chairman and CEO, said, ‘The completion of the Goreway plant is a major milestone in Sithe Global’s effort to build a portfolio of clean generating facilities using the most advanced technology available to meet consumer needs. Chubu and Toyota Tsusho are best-in-class partners for us on a project like Goreway. We sincerely welcome them to the Goreway team and look forward to working with them on future Sithe Global projects.’

Sithe Global is indirectly owned approximately 80 per cent by Blackstone SGP Capital Partners (Cayman) IV, an affiliate of private equity giant The Blackstone Group, and management, led by CEO Bruce Wrobel, with the remaining approximately 20 per cent stake held by investment funds managed by privately-held investment firm Reservoir Capital Group.

David Foley, a senior managing director of The Blackstone Group with responsibility for Blackstone’s investments in the energy sector, said, ‘Sithe Global is committed to identifying and developing power projects that meet the needs of the local community using the best available environmental technologies, while providing attractive returns to its investors. We are pleased to welcome Chubu and Toyota Tsusho to partner with us on our Goreway plant.’

Blackstone’s investment in Sithe Global has been made to facilitate Sithe Global’s plans to develop, finance, construct and operate electric power generation facilities in North America and certain international markets, according to a statement.

Sithe Global has a portfolio of power plant projects, including approximately 2,850MW of conventional and alternative energy projects in the US and approximately 4,000MW of similar projects under development in other international markets, including the 250MW Bujagali hydroelectric project in Uganda, one of the largest private energy investments in Sub-Saharan Africa, which is currently under construction.

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Of this, $13.5bn of new private investment went into companies developing and scaling-up new technologies alongside $117bn of investment in renewable energy projects from geothermal and wind to solar and biofuels.
Extremely difficult financial market conditions prevailed during 2008 as a result of the global economic crisis, the report said. Nevertheless, investment in clean energy topped 2007′s record investments by 5 per cent in large part as a result of China, Brazil and other emerging economies.

Of the $155bn, $105bn was spent directly developing 40GW of power generating capacity from wind, solar, small-hydro, biomass and geothermal sources. A further $35bn was spent on developing 25GW of large hydropower, according to the report.

This $140bn investment in 65GW of low carbon electricity generation compares with the estimated $250bn spent globally in 2008 constructing 157GW of new power generating capacity from all sources.

It means that renewables currently account for the majority of investment and over 40 per cent of actual power generation capacity additions last year.

Achim Steiner, UN Under-Secretary General and UNEP Executive Director, said, ‘Without doubt the economic crisis has taken its toll on investments in clean energy when set against the record-breaking growth of recent years. Investment in the United States fell by two per cent and in Europe growth was very much muted. However, there were also some bright points in 2008 especially in developing economies-China became the world’s second largest wind market in terms of new capacity and the world’s biggest photovoltaic manufacturer and a rise in geothermal energy may be getting underway in countries from Australia to Japan and Kenya.’

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According to the firm, LCA has well diversified portfolio set to benefit from green stimulus packages in US and EU.

Andrew Affleck, executive chairman of Low Carbon Investors, LCA’s investment manager, said, ‘As the first listed venture fund in the low-carbon sector, LCA is a pioneer in its field and has seen strong progress across many of its portfolio of 13 investee companies. However, as a pioneer, it is far from immune to market conditions and has had to take some proactive and decisive steps to adapt to the changing economic conditions, particularly the downturn in the building and building materials sector, by focusing its resources and capital onto those investees that have the strongest growth prospects over the next two years.

‘It is the investment manager’s belief that strong legislative drivers worldwide, coupled with social demand over environmental concerns, continue to make the low-carbon sector an attractive market for investment. The share price is trading at a large discount to NAV but the investment manager is expecting to see the first increases in NAV based on this existing portfolio of investments during the next year,’ he added.

Low Carbon Accelerator listed on the AIM Market of the London Stock Exchange on 11 October 2006, raising £44.5m.

The company targets significant minority (predominately 25 per cent and above) holdings in unquoted private companies in sectors including buildings, fuels, energy efficiency and energy generation.

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