Sustainable Development Capital agrees first energy efficiency investment for UK government’s Green Investment Bank

October 10, 2015

The UK Energy Efficiency Investments Fund, launched by Sustainable Development Capital (“SDCL”) with a £50 million cornerstone investment by the UK Green Investment Bank, has entered into a framework agreement to finance the retrofit of a portfolio of industrial facilities in the UK owned and operated by the Kingspan Group plc, a market leader in high performance insulation and other products and services with sustainability at their core.

The agreement will provide up to £5 million of investment for projects to retrofit Kingspan’s UK industrial facilities with systems and services that will reduce energy consumption by as much as 15%. The projects will be designed and delivered by Johnson Controls Inc, a global company offering products and services to optimise energy and operational efficiencies of buildings.
The projects will be financed under an innovative energy services agreement, whereby 100% of the project costs will be financed in return for a share of the energy savings achieved.

SDCL’s CEO, Jonathan Maxwell, said: “Reducing demand for energy is potentially the most cost- effective and rational way of reducing emissions and improving the security of energy supply. The UK regulator, Ofgem, recently predicted in its first annual Electricity Capacity Assessment that the amount of spare capacity in the system could fall from 14% to 4% in the next 3 years, raising the spectre of outages and price rises. This ground-breaking agreement between SDCL, Kingspan and Johnson Controls represents a major step forward towards a scalable and replicable solution, funded through energy savings achieved”.

The first project will take place at Kingspan’s Holywell factory in North Wales and is due to commence in December this year. The factory is part of Kingspan’s insulated panels division and is the largest panel manufacturing facility of its kind in the world. The project will involve the installation of energy metering, building management systems, lighting upgrade with a full digital addressable lighting interface control system, motor replacement, compressed air system upgrade and fan optimisation measures, designed to reduce electricity consumption by up to 15%. The framework agreement offers
the potential to save over 4,500 tonnes of Co2e emissions per year across the portfolio.

Johnson Controls will be responsible for the design and installation as well as the operation and maintenance of the projects under an energy performance contract.

Kingspan’s CEO, Gene Murtagh said: “We have recently embarked on our Net Zero Energy initiative, which aims to have Kingspan facilities running on renewably sourced power by 2020. Our interim target is to achieve Net 50% by end 2016. To help achieve our targets it’s essential that our facilities use & manage energy in the most efficient way. We are delighted to be working with Johnson Controls and SDCL to deliver sophisticated retrofit solutions for our own sites – saving energy, saving money and having a material impact in moving us nearer to our Net Zero Energy target. Looking beyond our own facilities we believe that deep renovation of the existing building stock is critically important and our range of high performance insulation and renewable products will play a key role in meeting this demand”.

Johnson Controls’ Richard van Bergen, Vice President and General Manager of Johnson Controls Energy Solutions Europe & Africa said: “The launch of the Green Investment Bank is a huge step in driving the green economy forward. Energy efficiency is a hot topic for business leaders who want the cost-saving benefits delivered through an energy performance contract (EPC). Johnson Controls, with over 125 years of experience in improving energy efficiency in buildings, is well placed to partner with Kingspan and SDCL to drive down consumption in Kingspan’s industrial sites through EPC. We are confident that this partnership will be a major breakthrough in the growth of energy efficiency projects in the private sector.”

Shaun Kingsbury, Chief Executive Officer of the UK Green Investment Bank said: “This project represents a significant development in the energy efficiency market. Energy efficiency improvement should be one of the most compelling investments companies can make. I hope that the example set by Kingspan, SDCL and Johnson Controls can be followed across the UK both to reduce wasteful
consumption of energy and to save businesses money”.

This project is expected to be the first investment by the UK Energy Efficiency Investments Fund, which was launched in August this year and is managed by SDCL EE Co (UK) Limited. The fund seeks to invest in projects that reduce demand for energy, cut energy costs and improve productivity in non-domestic buildings, industrial facilities and urban infrastructure in the UK.
The UK Green Investment Bank was established by the UK government to invest in green infrastructure projects focusing on five priority sectors. It will accelerate private sector investment in the UK’s transition to a green economy. Energy efficiency is one of the UK Green Investment Bank’s key target markets.

ENDS

For further information, please contact:

Jonathan Maxwell
Founding Partner & CEO
SDCL Group
Tel: +44 207 287 7700
Email: jonathan.maxwell@sdcl-ee.com

Gil Levy
Partner
SDCL EE Co (UK) LLP
Tel: +44 207 287 7700 Email: gil.levy@sdcl-ee.com

Brunswick Group
Justine McIlroy / Oliver Hughes Tel: +44 207 404 5959

Notes to Editors

About the UK Energy Efficiency Investments Fund

The UK Energy Efficiency Investments Fund is UK Energy Efficiency Investments 1, LP and parallel partnerships co-investing alongside it. It has been launched with a £50m cornerstone investment from the Green Investment Bank and is managed by SDCL EE Co (UK) LLP, the dedicated UK energy efficiency investment arm of the SDCL Group. One of SDCL Group’s strategic investors, Sustainable Technology Investors Limited (STIL), is an investor in SDCL EE Co (UK) LLP and its Chairman, Gordon Power, chairs the investment committee of the UK Energy Efficiency Investments Fund.

http://www.sdcl-ee.com

About SDCL Group

SDCL Group is a specialist financial and investment advisory firm, headquartered in London and with offices in New York and Hong Kong. It was established in 2007 to help governments, financial institutions and companies finance and invest in environmental and social infrastructure assets and services. It seeks long-term value, increased efficiency and superior risk-adjusted investment returns through scalable business models that positively impact the environment and society. SDCL’s advisory business is focussed on facilitating the supply of clean infrastructure. Its investment business is focussed on reducing demand for resources through energy efficiency. SDCL’s business in Asia (SDCL Asia) is a joint venture with the First Eastern Investment Group, one of the leading private equity and infrastructure investors in Asia.

http://www.kingspan.com

About Johnson Controls

Johnson Controls is a global diversified technology and industrial leader serving customers in more than 150 countries. Our 162,000 employees create quality products, services and solutions to optimise energy and operational efficiencies of buildings; lead-acid automotive batteries and advanced batteries for hybrid and electric vehicles; and interior systems for automobiles. Our commitment to sustainability dates back to our roots in 1885, with the invention of the first electric
room thermostat. Through our growth strategies and by increasing market share we are committed to delivering value to shareholders and making our customers successful. In 2012, Corporate Responsibility Magazine recognized Johnson Controls as the #5 company in its annual “100 Best Corporate Citizens” list.

http://www.johnsoncontrols.com

About UK Green Investment Bank (GIB)

The UK Green Investment Bank was established by the UK Government to invest in green infrastructure projects focusing on five priority sectors. It will accelerate private sector investment in the UK’s transition to a green economy. The UK Government has allocated £3bn for the bank to invest, on sound financing principles, by April 2015. Offshore wind power generation, commercial and industrial waste processing and recycling, energy from waste generation, non-domestic energy efficiency and support for the Green Deal will be the first priority sectors. Headquartered in Edinburgh, the Bank received state aid approval from the European Commission in October 2012.