Launch of €70 million Irish Energy Efficiency Fund
Initial €2 million LED lighting retrofit programme at Tesco Ireland to create 16 new jobs
Dublin, 8 May 2014
Energy Minister, Pat Rabbitte T.D., has today launched the new €70 million National Energy Efficiency Fund with Sustainable Development Capital LLP (SDCL), the leading energy efficiency investment manager. The fund will act as a catalyst to develop energy efficiency projects in the Irish market and enhance the level of finance available to support the clear energy and cost saving opportunity that exists for public and commercial sector organisations.
The fund has secured first close of €35 million with a capital commitment of €17.2 million from the Irish Government, together with a combination of private sector capital from London & Regional Properties (€12.8m) and Glen Dimplex Group (€5m).
SDCL will act as investment adviser to the fund and was appointed following a competitive process conducted by the Department of Communications, Energy and Natural Resources, SEAI and the NewEra unit of the NTMA. It is anticipated that as much as €300 million leveraged funding will be delivered over the next three years based on a fund size of €70 million.
In a deal worth €2 million, Tesco Ireland will become the first company to avail of the fund as part of a significant retrofit programme and the first Sustainable Energy Authority of Ireland Exemplar project to reach financial close. Irish energy services company, DCS Electrical (DCS), will retrofit an initial seven Tesco stores with a follow-on funding commitment for up to 40 stores nationwide. The project to replace existing lighting across 7 Tesco stores with high-efficiency LEDs is expected to result in the creation of 16 new jobs at DCS and deliver estimated average annual energy savings of over €540,000.
Minister Rabbitte said: “Energy efficiency represents a huge opportunity to stimulate economic activity, employment and improve national competitiveness. Today’s announcement marks an important first step for the Fund, but more importantly says to businesses and public sector bodies – the Fund is open and ready to do business.”
“The initial first close of €35 million represents a significant Government and private capital injection, indicative of the growing level of international confidence in the Irish economy. In addition, the fund adds to Ireland’s credentials in the area of energy efficiency where companies like Glen Dimplex are already major international players.”
Jonathan Maxwell, Founding Partner and CEO of SDCL said: “There is pent up demand in the market for investment in energy efficiency projects but this has been inhibited by a lack of funding from conventional sources. The Fund is taking an innovative approach by basing its investment return on the energy cost savings expected to be achieved by projects. Improving energy efficiency not only delivers cost savings but frees up capital for other operational activities, allows for future-proofing against possible energy price increases, increases resilience and can improve asset values. This is important for Ireland’s future competitiveness.”
Adrian Lewis, Finance Director, Tesco Ireland, said: “This is a commercial arrangement in which Tesco’s technology partner DCS Electrical accesses this fund and Tesco repays DCS based on energy efficiency savings delivered. With sustainability at the heart of our business model, whether that be crop production, transport or store operations, this innovative fund will help us achieve our goal of becoming a Zero-carbon business by 2050 and of being half way there by 2020. Working with Irish technology companies, promoting local employment in energy efficiency and, unlocking energy saving will help us better support the communities we operate in.”