05 October 2021
UK Climate Investments is a joint venture between GIG and the UK Government. With an objective to invest £200 million of the UK’s international climate finance, UK Climate Investments seeks to mobilise investment in green infrastructure in key emerging economies and developing countries. To date, UK Climate Investments has made six transformational investments in sub-Saharan Africa and India.
During the period, UK Climate Investments completed delivery of 254 MW of clean energy projects in South Africa. The partnership, with majority black-owned and managed renewable energy developer H1 Holdings, delivered two onshore wind farms and a run-of-river hydropower facility. The projects created approximately 6002 jobs during construction and operations while supporting the country’s transition to cleaner sources of electricity. This major milestone was accompanied by progress on other initiatives in Africa, with UK Climate Investments helping to crowd-in institutional capital into a green affordable housing platform in Kenya. The platform has allowed UK Climate Investments to begin investing in and supporting the creation of an unlisted renewable energy yieldco for investment in sub-Saharan Africa.
In India, UK Climate Investments agreed the sale of its first investment during the period – a 60 MW solar farm in the Maharashtra region. Financing from UK Climate Investments was critical to the delivery of the solar farm, which represented the first utility scale project developed by leading international solar energy company Lightsource BP in India. Over its long-term operation, the project will power the equivalent of 75,000 homes while helping to avoid harmful air pollutants and greenhouse gas emissions.
Established in 2017, Macquarie Green Investment Group Renewable Energy Fund 1 (MGREF1) was the world’s first dedicated offshore wind fund. Today, it manages investments in a portfolio of six operational offshore wind farms around the United Kingdom representing approximately 1,450 MW of generation capacity.
Strong and consistent winds and high operational availability over the reporting period ensured the portfolio continued to make an important contribution to the UK’s supply of green electricity.
To date, the MGREF1 portfolio has avoided more than 11.0 Mt of greenhouse gas emissions and produces enough renewable electricity to power the equivalent of 1.2 million homes each year.
During the period, Macquarie Asset Management and GIG completed fundraising for a second pooled fund dedicated to renewable energy investments – Macquarie Green Investment Group Renewable Energy Fund 2 (MGREF2).
More than €1.6 billion was raised at final close, exceeding an initial fundraising target of €1 billion. Commitments were received from 32 investors globally, with investors comprising pension funds, local government pension schemes, insurers, and sovereign wealth funds.
This strong interest underlines the growing appetite of a diverse range of institutional investors in contributing to the low carbon transition. Building on the success of its predecessor, MGREF2 is mandated to invest in platforms and construction and operational stage wind and solar projects predominantly in Western Europe, but also across the United States, Canada, Mexico, Japan, Taiwan, Australia and New Zealand.
The fund has made two investments to date, acquiring a 10 per cent stake in the 576 MW Gwynty Môr Offshore Wind Farm in the United Kingdom and a 50 per cent stake in a 268 MW portfolio of operating residential rooftop solar projects across the United States.
GIG provides tailored green impact reporting to MGREF2’s underlying investors and deep technical expertise to Macquarie Asset Management in developing greenfield renewable energy projects. Building on this successful partnership, Macquarie Asset Management and GIG will also explore opportunities for co-investment – bringing together the specialist capabilities of GIG, with the long-term, third-party capital and investment expertise of Macquarie Asset Management.