State-backed but operationally independent green investor, Leeds-based lender the UK Infrastructure Bank (UKIB) today laid the cornerstone for funds providing ‘second stage’ capital for green start-ups.
Privately held Octopus Group, almost as much an investment fund these days as it is a green power supplier, is partnering the state-backed body.
Their offspring is OSIF, the Octopus Sustainable Infrastructure Fund, designed to provide growth capital to companies looking to roll out and support sustainable infrastructure projects within the parent Bank’s priority sectors identified under its mandate.
UKIB will invest up to £100m on a match-funding basis, unlocking potentially up to £300m of further private capital.
OSIF will then invest in companies developing and rolling out sustainable infrastructure projects in emerging sectors. It will target startups deemed too risky by mainstream providers of commercial debt. Battery storage and EV charging are among sectors potentially to be favoured.
John Flint, the bank’s CEO explained: “The UK Infrastructure Bank was set up to solve the most important problems we face today, in partnership.
“This investment, which is fully aligned with our mandate, could unlock over £100m of private funding into new green industries and help people across the UK to benefit from innovation in their local area. We are happy to work alongside Octopus Investments to help innovative green projects access the finance they need”.
UKIB opened for business in June 2021 to spur investment in Britain’s solutions to climate change. It has concluded six deals in eleven months.
“We are developing our approach to how we can best complement the market”, said Flint. “We’re just getting started, and I look forward to seeing the impact of this fund, and our other investments as we grow.”
Octopus’ head of alternative investments Robert Skinner hailed UKIB’s commitment as an “important starting gun”.
“We are incredibly fortunate to have the support of the UK Infrastructure Bank in seeking to unlock this much-needed funding,” Flint enthused. “The scale of the UK’s net zero ambitions will require billions of pounds of investment”.
“Some of that money needs to be channelled towards scaling up the emerging infrastructure technologies, companies and assets across critical sectors, such as digital infrastructure like small cells and green data centres, battery storage, electric vehicle charging and waste management.
“These are the sectors that will form the foundations of our sustainable economy and energy system in the years to come”, said Flint.
More details here.