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Rob cormie uk gib investment bank - giff presentation - 12 june 2014

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Mobilising capital to build a stronger, greener economy Presentation to the OECD, Paris 12th June 2014 Rob Cormie Chief Operating Officer

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Mobilising capital to build a stronger, greener economy Presentation to the OECD, Paris 12th June 2014 Rob Cormie Chief Operating Officer
2 THE UK’S COMMITMENTS Notes: 1) vs 1990 levels; 2) from 3% in 2010; 3) vs 1995 levels; 4) Source: Vivid Economics. Estimates of required green investment in the UK varies between £220bn and £500bn depending on sources Our statutory commitments … … demand unprecedented investment Up & running Investing Innovating Profitable Growing
3 OUR STARTING POINT Our projected run-rate in green infrastructure investment is consistently half the required amount Source: BNEF, IJ, GIB Average annual required Up & running Investing Innovating Profitable Growing £10bn £8bn £13bn £14bn £13bn £16bn £16bn £33bn 2007 2008 2009 2010 2011 2012 2013 2014 Average 2007-13 £13bn
4 £3.8bn Capital to invest in green projects WHO WE ARE 70Specialist investors and technical experts Chaired by Lord Smith Independent Board Up & running Investing Innovating Profitable Growing 100% Owned by the UK Government Mobilise private sector investment Accelerate the UK’s transition to a green economy
5 Up & running Investing Innovating Profitable Growing OUR JOB Our vision: green and profitable Our task: crowding-in capital Our markets: Offshore Wind Waste & Bioenergy Energy Efficiency
6 We have invested in every part of the UK, in all of our sectors and using all our financial products WE ARE INVESTING Our investments will save 1.3 million tonnes of waste from landfill We have backed 5 local authority, 3 commercial and 2 anaerobic digestion waste projects We have backed large and small projects; from a CapEx of £2m to £1bn We are building a market in energy efficiency, including streetlight conversion and 4 NHS projects Our investments will produce enough renewable electricity to meet energy needs of 2.9 million homes We’ve invested £623m in 5 offshore wind projects, including construction equity We have set up 5 funds, with £250m, to back small projects Our investments will cut CO2 emissions equivalent to taking 1.5 million cars off the road We have committed £1.3bn of capital to 26 projects, mobilising a total of £4.6bn
7 Up & running Investing Innovating Profitable Growing OVER 70 OTHERS HAVE INVESTED WITH US
8 Non GIB markets But, we can only invest in 35- 40% of the UK’s green economy: WE ARE A KEY PART OF THE UK’S GREEN ECONOMY Source: BNEF, IJ, GIB We have quickly become the most active investor in our markets: 2012/13 2013/14 Up & running Investing Innovating Profitable Growing GIB markets 43% market share* 56% market share* * Including Offshore Wind, Waste and BioEnergy (but not Energy Efficiency)
9 Up & running Investing Innovating Profitable Growing HOW IT WORKS IN PRACTICE: CREATING A SECONDARY MARKET IN OSW 1 : 3.5 £266m refinancing of Masdar’s stake in London Array Creating a stronger market in offshore wind finance GIB £59m BTMU, KfW, Siemens, SMBC 1 : 3.9 GIB £46m Lloyds, Santander, RBS, Siemens £224m refinancing of PGGM and Ampere’s stake in Walney
10 Up & running Investing Innovating Profitable Growing WE ARE INNOVATING… IN MARKETS Greencoat Capital was the first successful listing of its type in the UK, GIB supported BIS in its cornerstone investment £210m Private sector capital £50m (BIS) £260m Successful fund listing Capital Raised Greencoat £260m Bluefield Solar £130m TRIG £300m Foresight £150m Infinis £234m Greencoat 2 £83m John Laing Renewables £160m TOTAL £1.3bn
11 Up & running Investing Innovating Profitable Growing …IN DEVELOPING NEW PRODUCTS Green Loan More efficient street lighting NHS Energy Efficiency Programme Low fixed rate Up to 20 years term Designed for Public sector Energy Efficiency projects Repayments made from savings
12 Emerging opportunities: INVESTING IN SCOTLAND Waste & Bioenergy Energy Efficiency
13 WE ARE MAKING A DIFFERENCE We are financing new infrastructure that is being built right across the UK Affordability Security of Supply Up & running Investing Innovating Profitable Growing Creating 2,000 new UK jobs Lowering the cost of capital in our sectors, including by attracting longer term investors Supporting SMEs – We’ve committed £250m to back smaller projects Our sector and technical expertise means that our participation is seen to de-risk projects
14 WE ARE INVESTING PROFITABLY Our portfolio is young and weighted towards equity and construction investments Once operational our current portfolio is projected to deliver an average return of around 9% Our investments provide returns of between c.5% and 14% Up & running Investing Innovating Profitable Growing Equity Mezzanine Debt Fund Operation Construction
15 OUR PLANS FOR THE FUTURE Keep investing and innovating 12/13 13/14 14/15 Up & running Investing Innovating Profitable Growing Expand our activities Hydro Electric
16 The information in this document and any accompanying material (“The Document”) is confidential and commercially sensitive. This Document is provided to each recipient on a confidential basis solely for information purposes only. No reliance can be placed on this Document by any recipient or any other person. This Document and its contents are confidential to the person to whom it is delivered and must not be reproduced or distributed, either in whole or in part, nor its contents disclosed by such persons to any other person without the prior written consent of UK Green Investment Bank plc. Except as required by law, neither UK Green Investment Bank Plc nor any of its connected persons accepts any liability or responsibility for the accuracy or completeness of, or makes any representation or warranty, express or implied, with respect to the information contained in this Document or on which this Document is based or any other information or representations supplied to the recipient. UK Green Investment Bank Plc will not act and has not acted as your legal, tax, accounting or investment adviser. This Document does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase, any investment and UK Green Investment Bank Plc does not arrange investments for/introduce parties as a result of sharing the information set out in this Document. Registered Office: Atria One, Level 7, 144 Morrison Street, Edinburgh, EH3 8EX. Company Number SC424067. UK Green Investment Bank Plc is wholly owned by HM Government. The company is not authorised or regulated by the Prudential Regulation Authority or the Financial Conduct Authority. Headquarters Atria One Level 7 144 Morrison Street Edinburgh EH3 8EX Tel: +44 (0)330 123 2167 London Office 21-24 Millbank Tower Millbank London SW1P 4QP T +44 (0) 330 123 3070 CONTACT US

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Rob cormie uk gib investment bank - giff presentation - 12 june 2014

  • 1. Mobilising capital to build a stronger, greener economy Presentation to the OECD, Paris 12th June 2014 Rob Cormie Chief Operating Officer
  • 2. 2 THE UK’S COMMITMENTS Notes: 1) vs 1990 levels; 2) from 3% in 2010; 3) vs 1995 levels; 4) Source: Vivid Economics. Estimates of required green investment in the UK varies between £220bn and £500bn depending on sources Our statutory commitments … … demand unprecedented investment Up & running Investing Innovating Profitable Growing
  • 3. 3 OUR STARTING POINT Our projected run-rate in green infrastructure investment is consistently half the required amount Source: BNEF, IJ, GIB Average annual required Up & running Investing Innovating Profitable Growing £10bn £8bn £13bn £14bn £13bn £16bn £16bn £33bn 2007 2008 2009 2010 2011 2012 2013 2014 Average 2007-13 £13bn
  • 4. 4 £3.8bn Capital to invest in green projects WHO WE ARE 70Specialist investors and technical experts Chaired by Lord Smith Independent Board Up & running Investing Innovating Profitable Growing 100% Owned by the UK Government Mobilise private sector investment Accelerate the UK’s transition to a green economy
  • 5. 5 Up & running Investing Innovating Profitable Growing OUR JOB Our vision: green and profitable Our task: crowding-in capital Our markets: Offshore Wind Waste & Bioenergy Energy Efficiency
  • 6. 6 We have invested in every part of the UK, in all of our sectors and using all our financial products WE ARE INVESTING Our investments will save 1.3 million tonnes of waste from landfill We have backed 5 local authority, 3 commercial and 2 anaerobic digestion waste projects We have backed large and small projects; from a CapEx of £2m to £1bn We are building a market in energy efficiency, including streetlight conversion and 4 NHS projects Our investments will produce enough renewable electricity to meet energy needs of 2.9 million homes We’ve invested £623m in 5 offshore wind projects, including construction equity We have set up 5 funds, with £250m, to back small projects Our investments will cut CO2 emissions equivalent to taking 1.5 million cars off the road We have committed £1.3bn of capital to 26 projects, mobilising a total of £4.6bn
  • 7. 7 Up & running Investing Innovating Profitable Growing OVER 70 OTHERS HAVE INVESTED WITH US
  • 8. 8 Non GIB markets But, we can only invest in 35- 40% of the UK’s green economy: WE ARE A KEY PART OF THE UK’S GREEN ECONOMY Source: BNEF, IJ, GIB We have quickly become the most active investor in our markets: 2012/13 2013/14 Up & running Investing Innovating Profitable Growing GIB markets 43% market share* 56% market share* * Including Offshore Wind, Waste and BioEnergy (but not Energy Efficiency)
  • 9. 9 Up & running Investing Innovating Profitable Growing HOW IT WORKS IN PRACTICE: CREATING A SECONDARY MARKET IN OSW 1 : 3.5 £266m refinancing of Masdar’s stake in London Array Creating a stronger market in offshore wind finance GIB £59m BTMU, KfW, Siemens, SMBC 1 : 3.9 GIB £46m Lloyds, Santander, RBS, Siemens £224m refinancing of PGGM and Ampere’s stake in Walney
  • 10. 10 Up & running Investing Innovating Profitable Growing WE ARE INNOVATING… IN MARKETS Greencoat Capital was the first successful listing of its type in the UK, GIB supported BIS in its cornerstone investment £210m Private sector capital £50m (BIS) £260m Successful fund listing Capital Raised Greencoat £260m Bluefield Solar £130m TRIG £300m Foresight £150m Infinis £234m Greencoat 2 £83m John Laing Renewables £160m TOTAL £1.3bn
  • 11. 11 Up & running Investing Innovating Profitable Growing …IN DEVELOPING NEW PRODUCTS Green Loan More efficient street lighting NHS Energy Efficiency Programme Low fixed rate Up to 20 years term Designed for Public sector Energy Efficiency projects Repayments made from savings
  • 12. 12 Emerging opportunities: INVESTING IN SCOTLAND Waste & Bioenergy Energy Efficiency
  • 13. 13 WE ARE MAKING A DIFFERENCE We are financing new infrastructure that is being built right across the UK Affordability Security of Supply Up & running Investing Innovating Profitable Growing Creating 2,000 new UK jobs Lowering the cost of capital in our sectors, including by attracting longer term investors Supporting SMEs – We’ve committed £250m to back smaller projects Our sector and technical expertise means that our participation is seen to de-risk projects
  • 14. 14 WE ARE INVESTING PROFITABLY Our portfolio is young and weighted towards equity and construction investments Once operational our current portfolio is projected to deliver an average return of around 9% Our investments provide returns of between c.5% and 14% Up & running Investing Innovating Profitable Growing Equity Mezzanine Debt Fund Operation Construction
  • 15. 15 OUR PLANS FOR THE FUTURE Keep investing and innovating 12/13 13/14 14/15 Up & running Investing Innovating Profitable Growing Expand our activities Hydro Electric
  • 16. 16 The information in this document and any accompanying material (“The Document”) is confidential and commercially sensitive. This Document is provided to each recipient on a confidential basis solely for information purposes only. No reliance can be placed on this Document by any recipient or any other person. This Document and its contents are confidential to the person to whom it is delivered and must not be reproduced or distributed, either in whole or in part, nor its contents disclosed by such persons to any other person without the prior written consent of UK Green Investment Bank plc. Except as required by law, neither UK Green Investment Bank Plc nor any of its connected persons accepts any liability or responsibility for the accuracy or completeness of, or makes any representation or warranty, express or implied, with respect to the information contained in this Document or on which this Document is based or any other information or representations supplied to the recipient. UK Green Investment Bank Plc will not act and has not acted as your legal, tax, accounting or investment adviser. This Document does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase, any investment and UK Green Investment Bank Plc does not arrange investments for/introduce parties as a result of sharing the information set out in this Document. Registered Office: Atria One, Level 7, 144 Morrison Street, Edinburgh, EH3 8EX. Company Number SC424067. UK Green Investment Bank Plc is wholly owned by HM Government. The company is not authorised or regulated by the Prudential Regulation Authority or the Financial Conduct Authority. Headquarters Atria One Level 7 144 Morrison Street Edinburgh EH3 8EX Tel: +44 (0)330 123 2167 London Office 21-24 Millbank Tower Millbank London SW1P 4QP T +44 (0) 330 123 3070 CONTACT US