Green IFSC Reveals Target of $200bn for Sustainability Asset Management in Ireland

Targets $200 BnThe Green IFSC has revealed at its inaugural tax briefing that it aims to increase ‘green’ assets managed or serviced in Ireland from $10bn to $200bn in the coming years.

An audience of more than 100 leaders from the international financial services, green enterprise and public sectors were advised this week that the $10bn currently managed, domiciled or serviced from Ireland already represented close to 4 per cent of the $263bn global market in 2011.

Managers operating from Ireland are responsible for some of the world’s leading ‘green’ funds such as Kleinwort Benson’s water fund. And, BlackRock, the international fund management firm, recently announced its first fund focused on investments in renewable assets globally to be managed out of Ireland

Enda Faughnan, Partner, PwC/Chairman Green IFSC Tax Working Group, explained that Green IFSC aimed to achieve this growth by creating the optimum business environment for green finance to flourish and that an important part of that was ensuring the most appropriate tax environment.

“The Green IFSC Tax Working Group has helped facilitate six tax changes to support and accelerate the growth of ‘green finance’ in Ireland. We are here today to update you on what those changes mean to real businesses in the sector.”

He said that he would also like to acknowledge the Department of Finance and Department of an Taoiseach for their co-operation and collaboration in bringing about these changes and unfailing support.

Gary Tobin, Budget, Taxation & Economic Division, Department of Finance, provided an update on the recent green tax changes.

‘Green finance’ refers to capital markets, investment banking activities and related advisory services, which support the development, finance and promotion of a low-carbon economy. It includes funding of renewable energy generation, energy efficiency measures, trading and management of carbon and cleantech/sustainable funds.

Mr Faughnan added: “Ireland is well placed to reach these targets and grow assets under management. Already assets under management has reached €2.3 billion – up more than 100 per cent in the past year and 200 per cent in four, according to figures from Lipper and PWC.”

The audience was informed that Ireland was in a unique position to be a world leader in green finance possessing all the ingredients needed to grow upon an already impressive cluster – a world-leading international financial services centre; a grouping of green enterprise companies active across the globe; some of the best natural resources in the world; the talent and expertise; and a supportive Government helping ensure the optimum business environment.

John McKiernan, a Partner at Novusmodus, said: “Three years ago, ESB took the decision to fund ESB Novusmodus with €200m and created one of Europe’s leading cleantech and renewable investment funds. Today it is based in Dublin and Novusmodus also has offices in London and Munich.”Building on the existing cluster of green enterprise and funding initiatives, Ireland is quickly developing the credentials as a leader in the new cleantech industry. Green IFSC activity can only accelerate that growth.”

And, Enda Keane, Co-founder and Chief Executive Officer, of TreeMetrics which is the world’s leading forest measurement and valuation including carbon said: “The Green IFSC facilitated changes to the Irish securitisation regime, and specifically the recognition of forest carbon credits in tax legislation, means that we now have an additional added value.”

Brian Motherway, Head of Strategy & Innovation, Sustainable Energy Authority of Ireland was MC on the day.

Green IFSC is a public/private output of the IFSC Clearing House Group, Department of the Taoiseach.

Green IFSC facilitated tax changes:

  • Inclusion of greenhouse gas emissions allowances within the existing securitisation regime (S110, TCA 1997)
  • Relief from stamp duty on transfers of greenhouse gas emissions allowances (S90A SDCA 1999)
  • Corporation tax relief for investments made in renewable energy projects has been extended up to 31 December 2014 (S486B TCA 1997)
  • Inclusion of companies involved in production of energy from renewable sources within Income Tax Relief Scheme for Investment in Corporate Trades – Employment and Investment Incentive (EIIS) with increased lifetime limit of €10m (S488 TCA 1997).
  • The extension of the securitisation legislation in Finance Act 2011 to facilitate the securitisation of carbon credits has been further extended to include forest carbon offsets.

 

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