The first investment from the UK Green Investment Bank (UK GIB) has been made into the construction of an anaerobic digestion plant in Teesside.
An initial investment of £8 million will be placed into the project matched by a further £8 million of private sector funding.
It is the first of six plants planned over the next five years, making it the largest single AD project in the UK.
The investment, made through fund manager Greensphere Capital, is part of an £80 million investment programme by UK GIB in small waste projects.
With £3 billion in funding from the Government, and the ability to mobilise additional private capital, UKGBI has been set up to address market failures affecting green infrastructure projects.
At the launch of the bank in Edinburgh, where it is headquartered, Business Secretary Vince Cable said: “The Green Investment Bank – a key coalition pledge – is now a reality. It will place the green economy at the heart of our recovery and position the UK in the forefront of the drive to develop clean energy.
“£3 billion of Government money will leverage private sector capital to fund projects in priority sectors from offshore wind to waste and non-domestic energy efficiency, helping to deliver our commitment to create jobs and growth right across the UK.”
Earlier this year, the bank was established as a public company, UK Green Investment Bank Plc. Following state aid approval from the European Commission last month it is now operational as an independent bank.
In the period before state aid approval for UK GIB, investments have been made on commercial terms by BIS’s UK Green Investments team (UKGI). So far, UKGI has committed £180 million to specialist fund managers to co-invest equity in smaller waste infrastructure, energy from waste and non-domestic energy efficiency projects. These have now been transferred to the UK GIB.