6 November 2015

EF BRIEFS: Downing, Lekela, Recurrent Energy, Enbridge, Climate Bonds Initiative, GRI, Global CCS Institute, IETA

Downing makes £20m UK biomass commitment

London-based investment firm Downing will invest £20 million ($30 million) in biomass projects as part of a joint venture with developer Strand Energy.

The new company, known as Strand Energy (Biomass), will focus on projects eligible for the UK's Renewable Heat Incentive (RHI).

Michael Lucht, managing director of Strand Energy, said that despite "considerable uncertainty in the market at the moment" about the future of RHI subsidies, "funding is readily available for qualified projects". He urged other site owners with suitable projects to contact the firm.

Thomson Reuters becomes latest to become CBI partner

Thomson Reuters has signed up to become a partner of the Climate Bonds Initiative (CBI), following closely on the heels of BlackRock.

The financial information service said it was "focused on working with clients and other providers to deliver climate change solutions that make a difference and facilitate global business".

Climate Bonds Partners pay $7,500 to gain insight from the CBI, to be associated with it for marketing purposes, and to use its network of contacts. Earlier this week, the world's biggest asset manager, BlackRock, announced its move to become a Climate Bond Partner.


UK praised for CCS landscape

The UK has been hailed as the leading country in the world when it comes to encouraging carbon capture and storage (CCS) investment and development.

A report published by the Global CCS Institute identifies the UK as providing "the necessary policy conditions to support wide-scale application of CCS technology", and being "one of the key regions for investment into CCS technologies that deal with emissions from industrial processes".

Lekela signs $350m agreement for Egyptian wind

Lekela Power – a heavyweight in the African renewables market – has agreed to develop a $350 million wind farm in Egypt.

The $1.9 million firm, which has more than 1GW of wind and solar under development across South Africa, Egypt and Ghana, has made the agreement with the Egyptian Electricity Transmission Company. The wind farm – Lekela's third in the country – will have a capacity of 250MW once operational.

Lekela is 60% owned by emerging market investor Actis and 40% owned by Mainstream Renewable Power.


IETA says Paris is key to encourage linkages in international carbon markets

The International Emissions Trading Association has called on policymakers to encourage countries to cooperate in the development and operation of domestic carbon markets when drafting the Paris Agreement at December's COP 21.

The organisation said the negotiations "could establish a strong foundation for supporting market-based approaches – and linkages between systems – far into the future", which would help governments achieve their emissions-reduction targets more easily.

"Access to markets could therefore enable countries to go beyond their INDC commitments – and at lower cost," it said. "Therefore, transfers and linkages necessarily need to be part of the Paris Agreement if the world is to achieve the greatest achievable outcome at the lowest possible cost".

Canada's Enbridge makes first offshore wind investment in $569m deal

Canadian energy company Enbridge has entered the offshore wind market, buying a 24.9% stake in a project off the coast of the UK.

The firm has joined the Green Investment Bank (GIB) as an equity holder in the 400MW Rampion project, with an overall investment of C$750 million ($569 million) – including transactions costs and a development fee.

The project is owned by E.ON, which now has a 50.1% stake. In May the GIB took 19% of the project, which was upped to 25% this summer. The site began construction in September and is slated for completion in 2018.

Rampion is backed by the UK's Renewable Obligation Certificates subsidy regime, and has a 15-year power purchase agreement.

Recurrent Energy lands $115m financing deal with Rabobank consortium

Recurrent Energy, a North American subsidiary of Chinese renewables developer Canadian Solar, has secured a $115 million financing package from a series of banks.

The solar firm closed a debt facility with a lending group led by the Netherlands' Rabobank, including Santander, NordLB, Key Bank and CIT Bank. The deal comprised construction debt, a tax equity bridge loan and a term loan. USBCDC, a division of US Bank, will also make a tax equity investment via a separate agreement with Recurrent.

The financing will be used for the 60MW Barren Ridge project in Kern County, US, which began construction earlier this year and is expected to be operational by the third quarter of 2016. The electricity and renewable energy credits generated by the facility will be sold under a long-term power purchase agreement to Los Angeles Department of Water and Power.

The deal comes in the same week Canadian Solar filed a draft document with the Securities and Exchange Commission to list a yieldco to hold its operational assets in developed countries.

New Canadian prime minister introduces climate change minister

Canada's newly sworn-in government has offered fresh hope about its willingness to tackle climate change, as the prime minister created a Minister of Environment and Climate change, as well as a committee dedicated to the subject.

Justin Trudeau told reporters that the government should be expected "to be responsible around climate and addressing the impacts of the environment we're facing around the world right now," just after naming Catherine McKenna as the new minister.

Former Environment Minister Stephane Dion has been appointed to the position of Foreign Affairs Minister ahead of the climate negotiations in Paris this month.

G4 Guidelines get update in face of demands for standardisation

The Global Sustainability Standards Board is to revise its guidelines in response to growing demand for "globally accepted sustainability reporting standards".

The organisation, which claims to provide the most widely used set of guidelines on non-financial disclosure, will move from 'GRI G4 Guidelines' to 'GRI Sustainability Reporting Standards', following an upcoming public consultation.

The new standards will be designed "to enhance the global comparability, usability and quality of sustainability information", and an initial version is expected to be ready by the third quarter of 2016.

Germany gets its first fossil-fuel free city

The City of Munster is the first in Germany to ban fossil-fuel investment, to reduce the risk of stranded assets.

Driven by a new ethical investment policy, the city's two pension funds – worth some €22 million – must invest only in "ethically and environmentally sound companies", meaning firms such as Total, RWE and Shell will be blacklisted. Nuclear energy companies are also banned, as well as those involved in weapons and child labour.

"To minimise financial risks for the city... we need to pull out of fossil-fuel companies as quickly as possible," said Otto Reiners, a councillor for Munster. The city joins Oslo, Melbourne and Uppsala in recent decisions to screen against coal, oil and gas investments.

Vietnam steps up environmental reporting rules for listed firms

Listed companies in Vietnam must disclose their environmental performance as part of new regulation.

Vietnam already has rules around governance-linked disclosure for public firms, but this has been extended to cover social and environmental issues. Companies will have to report on their management of raw materials and resource consumption, as well as how they comply with environmental protection laws.

Dominic Scriven, CEO of Dragon Capital Group, a major fund manager in Vietnam and a campaigner on non-financial disclosure issues, welcomed the news, saying: "Not only will it benefit local businesses and communities, but it will also boost the competitiveness of the Vietnamese stock market, especially in terms of attracting foreign capital".