Presented at the 4th Global Infrastructure Basel Summit 21 & 22 May 2014.
Read more about the world leading platform for Sustainable Infrastructure Finance at www.gib-foundation.org.
Next Summit: 27 & 28 May 2015 in Switzerland
London - London Greenfunds by Matthew Pencharz at GIB Summit
1. The Mayor of London’s
Green Fund
Matthew Pencharz
Senior Mayoral Advisor – Energy and the
Environment
Greater London Authority
2. The Challenge
•Work to meet and take advantage of
London’s demographic pressure
•Create the environment for an Age of
Enterprise
•Stimulate large infrastructure projects
e.g. Northern line extension
•Increase energy supply, not CO2
emissions
•Achieve a 60% reduction in CO2
emissions by 2025 based of 1990
levels
•25% decentralised energy by 2025
•Maintain our enviable quality of life and
continue to make London the World’s
Best Big City
3. London Infrastructure Investment Plan (LIIP)
3
Following from the Mayor’s 2020 Vision, LIIP will consider
the costs, funding and financing of the critical infrastructure
London needs to meet challenge of growing population:
• Transport
• Housing
• Energy
• Water (supply, sewerage, flood defence)
• Waste
• Green Infrastructure
• Social
4. Place in Finance landscape
Grant
London Green
Fund
Commercial
Increasing commercial viability
•High risk, with little
market demand
evidence or funding
security
•Returns are ‘non-
financial’
•Outputs essential to
economic development
policy
•Lack of alternative
funders
•Fluid risk profile and
little or no robust market
demand evidence
•Requirement for long
term debt and equity, or
additional funding
security or guarantees
are required
•Returns are longer term
or do not match
commercial needs
•Clear and
understandable risk
profile
•Strong rationale for
commercial funding to
be made available
•Normal levels of
commercial return that
commensurate with risk
of project
5. LGF Structure and Sources of Finance
Circa 86% of allocated funds are
committed to projects as of
December 2013
6. A waste recycling plant capable of re-
processing 20,000 tonnes of plastic bags/films
per year
An organic-waste treatment facility to process
49,000 tonnes per annum of food and green
waste, generating electricity for 2,000 homes
and producing 14,000 tonnes of compost.
Expansion of a specialist plastics Materials
Recycling Facility .
Retrofitting and installation of energy saving
measures and low carbon infrastructure to
support development at an iconic cultural
institution.
Projects Supported by LGF
7. Some Lessons
Low carbon funding initiatives not only
need funding, but also management-
know-how and technical guidance
(e.g. through RE:FIT; RENEW).
Need to know what you want – but
also what market can deliver.
Formulate clearly defined investment
strategy, but recognise market can
change.
8. LGF Phase II - 2014-20
• Additional £50m ERDF earmarkedfor 2014-20.
• Deloitte appointed to carryout ex ante assessment.
• EIB initiate approval process for £500m finance facility to sit alongside £50m
ERDF.
• Returns from currentphase will bere-invested in similar activities.