Border to Coast Pensions Partnership has made a £48.5m (€55.3m) commitment to a Capital Dynamics-managed UK clean energy fund created to finance onshore wind, solar and battery storage projects.
The manager of £48bn of assets on behalf of 11 UK local government pension schemes (LGPS) said the capital commitment to the Clean Energy UK Fund represents the pension pool’s first investment within its innovative UK opportunities portfolio.
The £0.5bn UK Opportunities portfolio – launched in April this year – targets long-term, impact-driven investments in housing, transport, energy and growth finance.
Border to Coast’s capital will be put to work constructing four wind farms in Scotland, the LGPS pool said, adding that the Clean Energy UK Fund’s investments include securing long-term, fixed-price power purchase agreements, which offer “positive returns with strong downside protection”.
Joe McDonnell, CIO of Border to Coast, said: “From the outset we said our UK Opportunities proposition would focus on adding value through financing the build of new infrastructure and our first commitment on behalf of partner funds delivers just that.
“Capital Dynamics offers not only a strong investment opportunity, but also the ability to have a tangible impact on the future pipeline of renewable energy infrastructure that the UK sorely needs if it is to reduce its reliance on oil and gas and meet net zero goals.”
Barney Coles, MD and co-head of clean energy at Capital Dynamics, said: ”We are delighted that Border to Coast, via its UK Opportunities strategy, has chosen to join other global institutional clients in committing to our Clean Energy UK Fund.
“In so doing, Border to Coast has opted to augment its leading role in the UK’s transition to a net zero energy system, whilst also benefitting from Capital Dynamics’ unique approach to investing in such assets, delivering attractive risk-adjusted returns and positive local impact.”
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