Government initiatives north and south to meet renewable energy targets are set to receive a major boost with the announcement today of a unique, £150 million private sector equity fund.

The Northern Ireland led fund, The Irish Renewable and Sustainable Energy Fund, has its sights set on investing in a wide cross-section of ambitious eco-friendly schemes throughout Ireland over the course of the next 5 years.

High on the list of potential projects will be joint ventures with the public sector which has to meet stringent EU waste re-cycling directives and private sector initiatives aimed at reducing our reliance on fossil fuels as our main energy source.

The Irish Renewable and Sustainable Energy Fund is a joint venture between Belfast-based Northern Renewables, and Mutual Energy with financial advice, including banking and project expertise, being provided by RBC Capital Markets, who will also lead the fund-raising.

The fund, which will operate from offices in both Belfast and Dublin, stands ready to take equity stakes in companies seeking to develop projects across a varied and diverse range of energy options including energy from waste, recycling, biomass, biofuels, geothermal and wind power.

The potential that exists over the next five years for renewable energy schemes in both Northern Ireland and the Republic of Ireland is considerable. In Northern Ireland, the potential investment is estimated at £500 million with three times that amount predicted for the Republic of Ireland.

Making the announcement, the fund Chairman David Campbell, said: “The fund will invest in commercially viable projects which will assist both parts of Ireland in meeting renewable energy targets. A significant priority for the fund will be the provision of investment capital for Public Private Partnerships with local authorities. This could lead to the provision of state of the art energy-from-waste plants as well as new biomass and recycling centres.

“Councils throughout Ireland are facing difficult re-cycling targets and increasingly dramatic reductions in the use of landfill sites. Ignoring targets will prove massively expensive and leaves them vulnerable to costly EU infraction proceedings. The fund can offer a partnership solution to help them comply with directives that will also benefit the environment.

“On a purely business basis, the fund will aim to provide excellent returns to investors, and it will give the entrepreneur the finance to bring his or her scheme to fruition with reduced personal financial risk.

“In return, the fund will take a stake in the enterprise and bring to bear the considerable expertise we have in the energy arena to underpin its operation.

Mutual Energy Chairman, Alasdair Locke, said: “This fund provides a unique facility for project promoters in Ireland. We confidently expect it to have a significant bearing on how we develop renewable energy options in coming years, and make big inroads in tackling the waste we create.

“At this stage, we are keen to hear both from prospective investors and project promoters. The sooner projects are brought forward and evaluated, the sooner we can put in place the finance that is needed.

“Governments in both jurisdictions have given the fund a warm welcome. In recent weeks, Peter Hain in Northern Ireland and Brian Cowen in the Republic of Ireland have announced major renewable energy initiatives. They recognise the scale of what has to be done and, like us, they are keen to see the development of a renewable energy sector that makes a sizable difference in a relatively short space of time”.

Dai Clement, Managing Director at RBC Capital Markets, added: “This initiative comes at the perfect time as far as the private equity markets are concerned. In the past year or so, we have seen a marked increase in investors’ appetite for significant equity stakes in the renewable and sustainable energy sector. Existing energy and infrastructure funds are increasingly looking to take this type of asset into their portfolios, and we are starting to see dedicated renewable and sustainable energy funds emerging.

“We propose to launch the fund in the summer and are extremely optimistic that it will attract considerable interest from institutional and private investors alike”.

NOTE TO EDITORS:

Background

Mutual Energy has received approval from the Energy Regulator (NIAER) to invest an initial £10 million in the Fund.

The fund will shortly open offices in Belfast and Dublin but in the short term, it can be contacted via Northern Renewables Ltd. 31 Bruce Street, Belfast, BT2 7JD, telephone 028 90 234224.

David Campbell is Chairman of Northern Renewables Ltd. He served as the senior special adviser to the First Minister David Trimble MP MLA in the devolved administration and is chairman of the Ulster Unionist Party.

Alasdair Locke is Chairman of Mutual Energy and Executive Chairman of Abbot Group Plc, one of the UK’s largest service companies specialising in the oil exploration sector.

RBC Capital Markets Infrastructure Finance

RBC Capital Markets is the corporate and investment banking arm of Royal Bank of Canada, and a leader in infrastructure finance. It provides public and private sector clients across the globe with an integrated service including asset advice, structuring and capital underwriting, as well as advice to organisations operating in the infrastructure and essential services sectors. The firm is a specialist in the oil and gas, public finance, renewable energy and waste, transportation and utilities sectors with 55 dedicated executives across Europe, North America and Asia. For more information, please visit: www.rbccm.com.