Albion Community Power secures GBP10m from Greater Manchester Pension Fund
Greater Manchester Pension Fund (GMPF) has joined the UK Green Investment Bank (GIB) and Strathclyde Pension Fund (SPF) as investors in UK community-scale renewable energy projects through Albion Community Power (ACP) with a GBP10 million commitment.
ACP builds, controls and operates community-scale renewable projects across the UK. It is one of the largest single sources of equity funding available for projects in the sector.
GIB and SPF committed GBP50m and GBP10m respectively to ACP earlier this year. GMPF’s investment amounts to a quarter of the further capital ACP aims to raise from additional co-investors as it builds a GBP100m pot of funding for small-scale projects.
ACP marked the occasion by announcing details of its latest project, a 499 kW hydropower scheme located on the River Arkaig in Lochaber in the Scottish Highlands.
The GBP3.3m scheme, located on the Achnacarry estate, will generate approximately 2.3 GWh of renewable electricity per year. This is equivalent to the electricity consumption of around 550 homes. It will be constructed in conjunction with Green Highland Renewables and completion is expected in February 2016.
Water will be diverted from the river down a 6 metre drop using a weir. This will turn two 250 kW Archimedes’ screws to generate power, before returning to the river downstream.
This latest investment typifies ACP’s objective of creating a portfolio of small, decentralised renewable generation projects closer to the sources of demand. The River Arkaig project will be directly connected to distribution networks and, by its local nature, will help contribute to a reduction in transmission and distribution losses in addition to a reduction in greenhouse gas emissions.
Volker Beckers (pictured), Chair of Albion Community Power, says: “We are delighted to welcome the Greater Manchester Pension Fund as a new investor in ACP. It is a clear reflection of the growing institutional demand for access to high-quality community-scale renewable energy projects as they have a proven track record of generating strong and stable returns for investors.”
Councillor Kieran Quinn, Chair of Greater Manchester Pension Fund, says: “We are excited to be joining GIB and Strathclyde Pension Fund as investors in ACP and we look forward to supporting the continued expansion of community-scale renewable energy schemes across the UK. ACP will play a key role in this regard as the pressure to diversify beyond carbon-based energy sources becomes even greater.”
Shaun Kingsbury, Chief Executive of the UK Green Investment Bank, says: “It is great to see Greater Manchester Pension Fund join the family of ACP investors. Arkaig is a reminder of the important role community-scale renewables projects will play in securing clean, green and affordable sources of energy for future generations. The fact that yet another of the UK’s largest institutional investors has given its backing to ACP is testament to the efficiency and reliability of such schemes and the excellent work ACP is doing to highlight their benefits.”
Councillor Paul Rooney, Chair of Strathclyde Pension Fund, says: “Our first priority is always to ensure our members’ financial futures are secure; but to do that while supporting infrastructure, jobs and innovation in the communities where we live and work is something Strathclyde is proud to be at the forefront of in the UK.
“There is clearly a strong and growing appetite among forward-thinking pension funds to diversify their portfolios into this exciting sector. Manchester is one of those funds, so it is no surprise to be working with them and the Green Investment Bank to provide funding for innovative, community-focused infrastructure.”
ACP has agreed to sell 50 per cent of its electricity to directly local users through private wire arrangements, but is engaging with industry to investigate the option of selling more of the generated power straight to end customers.